18 Questions
What is the primary role of financial intermediaries?
Facilitate the sale of securities from the original issuers to the final buyers
Which of the following is an example of personal finance?
A family budgeting for food, clothing, and education
What type of finance involves organizations that do not aim to make a profit?
Finance of non-profit organizations
Which area of finance includes managing government sources and uses of funds?
Public finance
What category of finance involves borrowing between individuals?
Personal finance
What is the main focus of private finance?
Borrowing from financial institutions for companies
What is the Latin word from which the word 'finance' is derived?
Final
Which type of check is typically issued by banks and signed by a bank officer?
Cashier’s Check
As a verb, what does 'finance' mean?
To provide capital
In finance, what does direct finance involve?
Selling shares directly to incorporators
What does 'indirect finance' involve as per the text?
Involving financial intermediaries in financial transactions
How is finance defined when used as a noun?
Management of money
What is the origin of the word 'money'?
Derived from a Latin name 'Moneta'
Which characteristic of money ensures that it is of relatively uniform quality and interchangeable with other units?
Divisible
What does fungible mean in relation to money?
Interchangeable with other units
Which statement best describes transaction costs?
Incurred when evaluating each unit individually
What is the key function of money as a medium of exchange?
Enhancing the ease of trade
What does finance involve?
Management of resources and money
Study Notes
Financial Intermediaries
- Act as middlemen when buying securities for resale or facilitating sales from original issuers to final buyers.
Classification of Finance (As to Users)
- Public Finance: deals with government revenue and expenditure patterns, including infrastructure spending and government employee payment.
- Private Finance: all finance not related to public finance, including individual or company borrowing from another individual or institution.
Classification of Private Finance
- Personal Finance: refers to finance conducted by individuals or consumers, including family expenditures.
- Finance of Non-Profit Organizations: involves charitable, civic, or religious organizations that do not aim to gain profit.
Types of Checks
- Personal Check
- Business Check
- Cashier's Check or Manager's Check
- Traveler's Check
Definition of Finance
- As a noun, finance refers to the management of money or monetary resources.
- As a verb, finance means to provide capital for a person or enterprise.
Origin of the Word "Finance"
- Derived from the Latin word "finer," meaning to end or pay.
Functions of Finance
- Allocating available funds
- Acquiring needed funds
- Utilizing funds to achieve set goals.
Classification of Finance (As to Form of Negotiation)
- Direct Finance: involved in direct borrowing, such as a company borrowing from a bank or a friend borrowing from another.
- Indirect Finance: involves financial intermediaries, such as a corporation selling shares to its incorporators.
Definition of Money
- Anything authorized by law to be generally accepted as legal tender, medium of exchange, and standard of value for goods and services.
Origin of the Word "Money"
- Derived from the Latin name "Moneta," a surname of the Roman Goddess Juno Moneta, the goddess of money.
Properties of Money (Currency)
- Fungible: units of the good should be of relatively uniform quality and interchangeable.
- Divisible
- Durable
- Recognizable
- Portable
- Stable
Test your knowledge on financial intermediaries acting as middlemen in buying and selling securities, as well as the classification of finance based on users, with a focus on public finance related to government revenue and expenditure patterns.
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