Final Review Intro to Business
Securities and Exchange Act of 1934
created by the Securities and exchange act. Enforces federal securities regulations, supervises all national exchanges, investment companies, the OTC market, brokerage firms and just about every other organization involved with trading securities
an amount on deposit in a checking account
Return on Sales Ratio
a financial ratio calculated by dividing net income after taxes by net sales
ex. net income after taxes/net sales
What percentage of U.S companies use social media?
80 percent of companies with more than 100 employees
the buying and selling of U.S government securities by the Federal Reserve System for the purpose of controlling the supply of money
the ease with which an asset can be converted into cash
money must be small and light enough to carry, therefore paper currency is is issued in larger denominations
the standard unit of money must be divisible into smaller units to accommodate small purchases and large ones. the standard is the dollar, is divided into pennies, nickels, dimes, etc
money should retain its value over time. when it does not, people tend to lose faith in their money and put their storing value in somewhere else, i.e. gold, real estate, etc
the firm's debts- borrowed money it owes to others that must be repaid
the difference between total assets and total liabilities- what would be left for the owners if the firm's assets were sold and the money used to pay off its liabilities
could be current liabilities, accounts payable, notes payable, salaries payable and taxes payable. will be repaid in a year or less
a summary of a firm's revenues and expenses during specified accounting period
risk return ratio
a ratio based on the principle that a high-risk decision should generate higher financial returns for a business and more conservative decisions often generate lower returns
the portion of a business's profits not distributed to stock-holders
debts that will be repaid in one year or less
what makes up a budget?
projects income, expenditures, or both over a specified future period
Who controls the Federal Reserve System
seven member board of governors, who meet in Washington D.C . Each governor is appointed by the president and confirmed by the Senate for a 14-year term. there is also a chairman and vice chairman of the board that is chosen from the existing members.
How many district banks are in the Federal Reserve System
12 district banks, as well as 24 branch banks
an interest-paying checking account. stands for negotiable order of withdrawal. interest rate is 0.05 to 0.5 percent
How much does the FDIC insure depositors accounts for?
ranging from 0.5 to 2 percent, basic deposit insurance of 250,000
buying a stock with the expectation that it will increase in value and then can be sold at a profit
Point of Sale Terminal
computerized cash register located in a retail store and connected to a bank's computer. swipe your card through the reader, central processing center notifies the bank you are making a purchase
What is the margin requirement for the Federal Reserve System?
sets the portion that cannot be borrowed
12b-1 (distribution fee)
defrays the costs of advertising and marketing the mutual fund. calculated on the value of a fund's assets and cannot exceed 1 percent of the fund's assets. ongoing fees charged each year
is money that will be used for one year or less. Cash flow, speculative production.
How do you calculate inventory turnover?
cost of goods sold/ average inventory
Advantages of Employer-Sponsered retirement programs
many employers will match pert or all of the contributions you make to a 401k or 403b retirement account
Contingent deferred sales fee
1 to 5 percent of the amount withdrawn during hte first five to seven years. typically they decline each year until there is not withdrawal fee.
no sales charges. offer same type of investment as load funds
Frequency of Barron's publication?
once a week. devoted to financial and economic news
Venture Capital Firms invest in?
firms that have potential to become extremely profitable. ie Zynga
In general the relationship between risk and return is?
return should be directly related to the assumed risk. greater risk, higher potential money.
Reinvestment of profits in the business
retained earning are reinvested for R&D, expansion, or funding of projects. Usually increases the value of the firm's stock
What is the typical denomination of most corporate bonds?
usually 1,000, but can go up to 5,000
Federal Board of Governors for FRS serve for how many years?
Forms of demand deposit
made-out check, withdrawing cash from an ATM, or transferring money b/w accounts.
What percentage of Consumers trust online computer opinions
3 accepted investors services
Moody's, Standard and Poors, and Fitch Ratings.
money owed to a company by its debtors
a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time. Examples of include promissory notes, bills of exchange, bank notes and cheques.