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Questions and Answers
What does finance allow individuals, businesses, and governments to do?
According to Gitman (2006), how is finance defined?
What is the area of finance that deals with the design and delivery of advice and financial products to individuals, businesses, and governments?
What does managerial finance primarily focus on?
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Which entity can raise money through investors to build a new factory?
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What is the main concern of financial managers in businesses?
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In finance, what are governments capable of doing to raise money for projects?
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Which one of these is NOT a major opportunity in finance according to the text?
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Financial Services in finance refers to which of the following?
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Managerial Finance focuses on:
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Study Notes
Financial Services
- Bank Overdrafts: allow withdrawal of more funds than available in the account, with interest calculated on the outstanding balance.
- Commercial Bills: short-term loans that must be paid in full upon reaching expiry.
- Loan Programs: short-term loans to assist small businesses with initial start-up expenses.
- Trade Credit: deferred payment of goods and services purchased from a supplier.
Financial Markets
- Definition: markets where funds are transferred from those with excess funds to those with a shortage.
- Importance: channel funds from those with no productive use to those who do, resulting in greater economic efficiency.
- Impact: affects personal wealth, business behavior, and overall economic performance.
Markets
- Definition: any place where goods and services are sold and bought, including shops, high streets, and websites.
- Refers to the whole group of buyers for a good or service.
Nature of Business
- Definition: the process of producing and distributing goods and services to those who desire or need them.
- Factors of Production:
Four Main Factors
- Natural Resources: land and materials from the land, such as timber, minerals, oil, and water.
- Labor (Human Resource): mental and physical efforts of all workers, regardless of skill or education.
- Capital: buildings, machinery, and tools used to produce goods and services.
- Entrepreneurship: people willing to accept the opportunities and risks of starting and running a business.
- Business Objective: to maximize profits.
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Description
Test your knowledge on different types of financial instruments such as bank overdrafts, commercial bills, loan programs, and trade credit. Learn about the characteristics and uses of each financial instrument in the market.
