FINS1613 Study Guide - Final Guide: Stock Market Index, Financial Statement, Income Statement

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16 May 2018
FINS1613 Kristy Yee
Chapter 1
Types of Firms
1. What is the most important difference between a corporation and all other organisation
2. What does the te liited liailit ea i a opoate otet?
3. Which organisational forms give their owners limited liability
4. What are the main advantages and disadvantages or organising a firm as a corporation
5. Eplai the diffeee fo a shaeholdes pespetie etee the lassial ta sste
ad the iputatio ta sste
Financial manager
1. What is the most important type of decision that the financial manager makes?
2. Why do all shareholders agree on the same goal for the financial manager?
3. Corporate managers work for the owners of the corporation. Consequently, they should
make decisions that are in the interests of the owners, rather than in their own interests.
What strategies are available to shareholders to help ensure that managers are motivated
to act this way?
The stock market
1. What is the difference between a public and private corporation?
2. What is the difference between a primary and secondary market?
3. Explain why the bid-ask spread is a transaction cost.
4. What role do stock market indices play?
Financial institutions
1. What is the financial cycle?
2. How do financial institutions help with risk-taking?
3. What role do investment banks play in the economy?
4. What are some of the similarities and differences among mutual funds, superannuation
funds and hedge funds?
Chapter 2
1. Why do firms disclose financial information?
2. Stakeholders in financial information- type of information they are interested in
3. What is the purpose of the b/s? How can you use the b/s to assess the health of the firm?
4. What is the purpose of the income statement?
5. How are the b/s and income statement related?
6. What is the DuPont Identity + use?
7. How does the statement of cash flows differ from P&L?
8. What a ou lea fo aageets disussio o the otes i fiaial statements?
Chapter 3/4
1. What makes an investment decision a good one?
2. How important are out personal preferences in valuing an investment decision?
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