What is preferred when making financial decisions?
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More return is preferred to less.
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What is preferred when making financial decisions?
More return is preferred to less.
In what way does finance interact with management?
Finance supports management in budgeting, forecasting, and strategic planning.
Who are the key participants in the finance process?
Entrepreneurs, investors, managers, dealers, regulators, and more.
What is management's primary objective in relation to stakeholders?
To maximize shareholders' wealth while considering the wellbeing of other stakeholders.
What role does finance play in operations and supply chain management?
Finance helps in budgeting and cost analysis for efficient operations and supply chain decisions.
What must financial decision-making strive for?
Sustainable development that benefits society at large.
What are private equity funds?
Investment funds where a small number of investors typically own virtually all shares in a firm.
What is the connection between finance and accounting?
Finance relies on accounting data to assess financial health and performance.
What does exchange rate risk refer to?
The value of a non-native currency denominated investment depends on changes in the exchange rate.
How does finance influence marketing and entrepreneurship?
Finance provides the necessary funding and financial analysis for marketing strategies and new ventures.
How does finance relate to economics?
Finance uses economic principles to analyze markets and make investment decisions.
What is the primary objective of financial management?
The value maximization objective of the corporation.
How do actions that maximize stock values benefit society?
They can lead to high-quality goods and services at reasonable prices, benefiting consumers.
How is finance related to information systems and technology?
Finance utilizes information systems for data analysis, reporting, and decision-making.
What are mutual funds?
Investment funds that pool money from many investors to purchase a diversified portfolio of securities.
What is country risk?
The risk that arises from investing or doing business in a particular country, depending on its economic, political, and social environment.
What factors affect exchange rates?
International trade deficits/surpluses, relative inflation and interest rates, and relative growth rates.
What is an agency conflict in finance?
A conflict of interest between stakeholders, typically between management and shareholders.
What characterizes hedge funds?
They involve a small number of large investors investing in a wide range of securities, including derivatives.
What are the two major functions of financial management?
Investment decisions and financing decisions.
How is finance influenced by human behavior?
It is shaped by human sentiments, attitudes, and behaviors, including rational and irrational actions.
What is corporate governance?
The system by which companies are directed and controlled, focusing on the relationships among stakeholders.
What is finance?
The art and science of managing money.
What does Financial Management encompass?
Managerial or corporate finance activities focused on maximizing shareholder value.
What constraints affect pricing in firms that maximize stockholder value?
Competition and consumer activism.
What is the agency problem?
The potential conflict of interest between owners/shareholders and managers.
What is the value of receiving cash sooner?
The sooner cash is received, the more valuable it is.
What is one threat that can help mitigate the agency problem?
The threat of takeover.
Why is it difficult for firms to maximize share price?
Because they must also consider the wellbeing of other stakeholders.
Why is sound financial decision-making essential?
It is essential at both individual and collective levels, including businesses and the macro-economy.
How can appropriate compensation help mitigate the agency problem?
By tying managerial compensation packages to stock price.
What type of assets are preferred in financial decision-making?
Less risky assets are preferred to riskier assets.
What is the agency conflict in finance?
The conflict between managers and stockholders where managers act in their own best interest.
What is Personal Finance?
The management of individual or household financial activities.
What is the focus of Investments and Behavioral Finance?
The study of how psychological factors affect investment decisions.
What are Exchange Traded Funds (ETFs)?
Investment funds that are traded on stock exchanges, similar to individual stocks.
What role do major shareholders play in mitigating the agency problem?
They can directly intervene to align interests.
Why does everyone care about finance?
Because all entities earn/raise and spend/invest money and want to enhance utilities/welfare.
What are commercial banks?
Financial institutions that provide a range of banking services to individuals and businesses.
What role do life insurance companies play in finance?
They provide financial protection and investment options through life insurance policies.
What is the principal-agent relation?
The relationship where the principal (owners/shareholders) and agent (managers) may have conflicting interests.
Why is ethics important in finance?
Ethics is critical in finance, as in life.
What is International Finance?
The study of financial transactions that occur across international borders.
What are Financial Markets and Institutions?
Platforms and entities that facilitate the exchange of financial assets and services.
How does maximizing stock value affect employee benefits?
Employment growth is higher in firms that focus on maximizing stock value, helping to attract, develop, and retain employees.
What are some ethical issues faced by finance professionals?
Conflicts of interest, insider trading, and transparency in financial reporting.
What are pension funds?
Investment pools that collect and invest money to provide retirement income for employees.
What is the relationship between stockholder value and consumer benefits?
Firms that maximize stockholder value must produce high-quality goods at the lowest cost, benefiting consumers.
What do Financial Derivatives and Engineering involve?
The use of financial instruments to manage risk and enhance returns.
What does Corporate Social Responsibility (CSR) entail?
The responsibility of corporations to consider the social and environmental impacts of their business decisions.
What do investment banks specialize in?
Raising and managing capital, providing advisory services, underwriting, M&A consulting, and wealth management.
What investment choices do you have for Tk 100,000 for 5 years?
Options may include savings accounts, fixed deposits, mutual funds, stocks, or bonds.
What factors should you consider when choosing an investment for Tk 100,000?
Consider risk tolerance, potential returns, liquidity, investment duration, and financial goals.
What are your choices if you need Tk 100,000 for tuition fees?
Options may include personal loans, scholarships, part-time work, or borrowing from family.
What factors should you consider when choosing how to obtain Tk 100,000 for tuition?
Consider interest rates, repayment terms, eligibility for scholarships, and impact on future finances.
What processes are involved in finance?
Fund transfer and redistribution processes involving instruments, platforms, infrastructure, institutions, and people.
