Finance Basics
Business Finance
Risk and Return
Investment Terms
Decision Making
100

What is the study of managing money and making decisions called? 

Finance

100

What are the three key financial decisions businesses make? 

capital budgeting, capital structure, working capital  management

100

What is the relationship between risk and return? 

Higher risk often mean higher return 

100

What is the money you earn from an investment called? 

Return

100

Which decision area helps manage day-to-day finances? 

Working capital management

200

What are the three main areas of finance? 

business finance, investments, financial institutions 

200

Which decision is about how to fund the business?

capital structure 
200

What is a risk-averse investor? 

One who prefers lower risk and is willing to accept lower return

200

What is a government bond?

A low-risk investment backed by the government 

200

Which decision deals with whether to invest in a new building? 

Capital budgeting 

300

True or False: 

Finance only applies to businesses.

False

300

What decision involves managing short-term cash flow?

Working capital management

300

What kind of risk can be reduced through diversification? 

Diversifiable risk 

300

Which investment might have the highest potential return? 

Tech startup stock 

300

What is equity financing? 

Raising money by selling shares of stock

400

What is an example of using finance? 

managing debt, investments, budgeting, etc. 

400

What is capital budgeting used for?

Evaluating long-term investments

400

Give an example of non-diversifiable risk.

Market crash, inflation 

400

What does diversification mean?

Spreading investments to reduce risk 

400

What is debt financing?

Raising money by borrowing (loans, bonds)

500

Why is it important to study finance? 

To make informed decisions about money.

500

Name one example of a capital structure decision.

Taking out a loan, issuing stock 

500

Name two types of investment risk. 

Default risk, inflation risk, political risk, etc. 

500

What kind of return would you expect from a savings account? 

Low return 

500

Which is riskier:investing in a startup or buying a government bond?

Investing in a startup

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