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Flashcards in Finance: Unit 2 Deck (11)
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1

What are the three main areas of Finance?

- Financial Institutions
- Financial Markets
- Financial Management

2

What are the two main drivers of finance?

- Time Value of Money
- Risk

3

Define investment

A placement of capital in expectation of deriving income or profit from its use.

4

Define asset

Something or someone of any value; any portion of one's property or effects considered.

5

Define debtor

A person of firm that owes money, one in debt, or one who owes a debt.

6

What is the basic idea of the Time Value of Money?

That money today is worth more than the same amount in the future.

7

Does Accounting look forward or backward?

Backward

8

What is Return?

The gain or loss from an investment.

9

What is Finance?

The study of how to optimally allocate assets.
Fundamentally a forward looking field concerned with what an asset will be worth in the future.

10

What is Economics?

A social science that analyzes the production, distribution, and consumption of goods and services.

11

What is Accounting?

The communication of a business's financial information.