Finance 3101, Howard Keen, Exam 1
Review (Chapters 1-5) with Actual Test
A+ Graded
1. Describe the cycle of money, the participants in the cycle, and the
common objective of borrowing and lending. - Correct Ans: ✔✔The
cycle of money is the movement of money from lender to borrower
and back again. It is often accomplished through a financial
intermediary like a bank. The common objective is to make both the
lender and the borrower better off.
2. Distinguish the four main areas of finance and briefly explain the
financial activities that each encompasses. - Correct Ans: ✔✔The
four main areas of finance are corporate finance, investments,
financial institutions and markets, and international finance.
3. Corporate Finance - Correct Ans: ✔✔Supports the operations of a
company.
4. Investments - Correct Ans: ✔✔Are the activities centered on buying
and selling stocks and bonds.
5. Financial Institutions and Markets - Correct Ans: ✔✔Are the
organizations that promote the cycle of money and the buying and
selling of financial assets.
