Intro

Question 0

Retained earnings

Answer 0

Portion of profits that are kept by a company

Question 1

Finance

Answer 1

Study of how to value things

Question 2

Investment

Answer 2

The analysis and process of choosing securities

Question 3

Risk

Answer 3

Potential future negative impact; probability or expected value of loss

Question 4

Real assets

Answer 4

Physical property like gold or real estate

Question 5

Real markets

Answer 5

Places and processes that facilitate the trading of real assets

Question 6

TVM

Answer 6

Time value of money - theory and application of valuing cash flows

Question 7

IRA

Answer 7

Individual retirement plan - a self sponsored retirement program

Question 8

401k plan

Answer 8

Defined contribution plan that is sponsored by corporate employers

Question 9

Equity

Answer 9

An owners interest in a business interprise

Question 10

Double taxation

Answer 10

Two taxes must be paid on the same income

Question 11

Maximization of shareholder wealth (SWM)

Answer 11

View that management should first consider the interests of shareholders when making business decisions, rather than maximize profit

Question 12

Agency theory

Answer 12

Theory that difficulties arise when considering the interests of managers and owners (manager v owner conflict of interest)

Question 13

Option

Answer 13

The opportunity to buy a stock at a fixed price at a specific time

Question 14

ESOP

Answer 14

Employee stock option plan - grants options to employees as compensation

Question 15

Fiduciary

Answer 15

Legal duty between two parties where one party must act in the interest of another

Question 16

Restricted stock

Answer 16

Not transferable except under specific conditions