Financial Management
To maximize the value of the business to its owners.
What is the main goal of a financial manager?
Any U.S. entity that is engaged in the business of accepting deposits, making, granting, transferring, holding, or brokering loans or credits, or purchasing or selling foreign exchange, securities, commodity futures or options, or procuring purchasers and sellers.
What are U.S. Financial Institutions?
Acceptable as payment for goods and services.
What is Money?
A policy making body that meets eight times a year to make monetary policy decisions.
What is The Federal Open Market Committee (FOMC)?
Stocks, bonds, preferred shares, and ETFs, Money Market instruments and hedge fund investments.
What are examples of marketable securities?
Obtaining funding for a business' operations and investments and seeking the best balance between debt (borrowed funds) and equity (funds raised through the sale of ownership in the business).
What is Financing (raising money)?
Occurs when a large number of customers of a bank or other financial institution withdraw their deposits simultaneously over concerns of the bank’s solvency.
What is a Bank Run?
Scarcity, Durability, Portability and Divisibility.
What are the Characteristics of Money?
The central bank of the United States.
What is the Federal Reserve Bank?
The most common type of equity (represents the amount of money that would be returned to a company's shareholders if all of the assets were liquidated and all of the company's debt was paid off in the case of liquidation).
What are Stocks?
A pool of money that is allocated for a specific purpose.
What is a fund?
Insures regular deposit accounts to reassure individuals and businesses regarding the safety of their finances with financial institutions.
What is the Federal Deposit Insurance Corporation (FDIC)?
Metal coins and paper money.
What are Durable forms of currency?
Open Market Operations, Reserve Requirement, The Discount Rate
What are the tools used by the Federal Reserve System in managing the money supply?
A system of interconnection between all participants (professional and nonprofessional) that provides effective conditions: to attract new capital by means of issuing new security (securitization of debt) to transfer real asset into financial asset.
What is a Securities Market?
Are outlays used to support current production and selling activities.
What are Short-term expenses?
A depository institution formed specifically to encourage household saving and to make home mortgage loans.
What is a Thrift Institution?
Currency, Demand Deposits and Time Deposits.
What are the components of the U.S. money supply?
To control the money supply, act as a borrowing source for banks, hold the deposits of member banks, and supervise banking practices.
What are the functions of The Federal Reserve System?
The most common form of marketable debt security and are a useful source of capital to businesses that are looking to grow.
What are Bonds?
Making sure that enough cash is on hand to pay bills as they come due and to meet unexpected expenses.
What is Cash Management?
Administered by the FDIC, this fund provides deposit insurance to commercial banks and thrift institutions.
What is the Deposit Insurance Fund (DIF)?
A medium of exchange, a standard of value, and a store of value.
What are the Functions of money?
Ranges from 3 to 10 percent on different types of deposits.
What is the Reserve Requirement?
Allows investors to buy and sell collections of other assets, including stocks, bonds, and commodities.
What is an Exchange-Traded Fund (EFT)?