WGU C708 Unit 2 Questions and Answers Rated A

WGU C708 Unit 2 Questions and Answers Rated A What do financial managers do? ✔✔prepare financial statements, business activity reports, and forecasts monitor financial details to ensure that legal requirements are me ...

WGU C708 Unit 2 Questions and Answers Rated A What do financial managers do? ✔✔prepare financial statements, business activity reports, and forecasts monitor financial details to ensure that legal requirements are met supervise employees who do financial reporting and budgeting review company financial reports and seek ways to reduce costs analyze market trends to find opportunities for expansion or for acquiring other companies help management make financial and investment decisions Important Skills for Financial Managers ✔✔Analytical skills, Communication, Attention to detail, Math skills, Organizational skills. principal-agent problem ✔✔difficulties in motivating one party (the "agent"), to act on behalf of another (the "principal"). Agency Costs ✔✔the costs of the conflict of interest between stockholders and management shareholders/stockholders ✔✔those having title to one or more shares of stock in a corporation; combined, they represent ownership of the corporation bondholder ✔✔the firm's creditors 9 major financial institutions ✔✔Central Banks, Retail and Commercial Banks, Internet Banks, Credit Unions, Savings and Loan Associations, Investment Banks and Companies, Brokerage Firms, Insurance Companies, Mortgage Companies central bank ✔✔an institution designed to oversee the banking system and regulate the quantity of money in the economy Retail/Commercial Banks ✔✔offered products to individual consumers while commercial banks worked directly with businesses. Internet banks are which type of banking institution? ✔✔offer the same products and services as conventional banks, but they do so through online platforms instead of brick and mortar locations. Credit unions are: ✔✔serve a specific demographic per their field of membership, such as teachers or members of the military Savings and Loan Associations ✔✔Financial institutions that are mutually held and provide no more than 20% of total lending to businesses Investment Banks and Companies ✔✔Investment banks do not take deposits; instead, they help individuals, businesses and governments raise capital through the issuance of securities. Brokerage Firms ✔✔A brokerage firm assists individuals and institutions in buying and selling securities among available investors. insurance companies ✔✔Financial institutions that help individuals transfer risk of loss Mortgage Companies ✔✔Financial institutions that originate or fund mortgage loans capital markets are for ✔✔long-term finance Money markets are markets for ✔✔Short-term finance Market Role in Providing Feedback to Management ✔✔when the stock price rises or declines. However, given that the stock market is prone to oscillation, this feedback can vary in its usefulness for managers making decisions. Securities Act of 1933 ✔✔The Act's objectives are to provide investors with material, financial, and other corporate information about issuers of public securities Rule 144 of Act of 1933 ✔✔permits (under limited circumstances) the sale of restricted and controlled securities without registration. Regulation S of Act 1933 ✔✔a "safe harbor" that defines when an offering of securities is deemed to be executed in another country and therefore not subject to the registration requirement under section 5 of the 1933 Act. Securities Exchange Act of 1934 ✔✔a law governing the secondary trading of securities (stocks, bonds, and debentures) in the United States of America. Maloney Act ✔✔Legislation, which provides for the regulation of the OVER-THECOUNTER market (OTC) by the NASD. NASD ✔✔the National Association of Securities Dealers, Inc Self-Regulatory Organization (or SRO). The NASD had primary responsibility for the oversight of brokers and brokerage firms, and later, the NASDAQ stock market The Sarbanes-Oxley Act or SOX ✔✔is to set new or enhanced standards for all U.S. public company boards, management, and public accounting firms.