Corporate Finance Mcq

STUDENT MENTORSHIP PROGRAM (MODULE 5FINANCE)
Module 1: Fundamentals of finance
By the end of this reading, you will understand    What the field of Financial is? How Financial Markets work? What different financial products are?

What is Finance? Finance is the study of how and under what terms money are allocated between lenders and borrowers. The term finance may incorporate any of the following: o The study of money and other assets o The management and control of those assets o Profiling and managing project risks  Finance is distinct from economics in that it addresses not only how resources are allocated but also under what terms and through what channels  Finance is based on economic principles  The field of finance deals with the concepts of time, money, risk and how they are interrelated. It also deals with how money is spent and budgeted  Behavioural Finance studies how the psychology of investors or managers affects financial decisions and markets. Financial System    The financial system consists of institutions that help to match one person’s saving with another person’s investment. It moves the economy’s scarce resources from savers to borrowers. The financial system is made up of institutions(Markets and Intermediaries)

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The household is the primary provider of funds to businesses and government.

Households must accumulate financial resources throughout their working life times to have enough savings (pension) to live on in their retirement years   Financial intermediaries transform the nature of the securities they issue and invest in Banks, trust companies, credit unions, insurance firms, mutual funds Market intermediaries simply help make markets work

Investment dealers Brokers (Investment Advisors)

Financial Markets
 Capital markets which consist of: o Stock markets, which provide financing through the issuance of shares or common stock, and enable the subsequent trading thereof. o Bond markets, which provide