Finance Test 1 Prep*

Bank Credit Card – A card, like Visa or MasterCard that lets you make purchases or obtain cash advantages and replay the cost of those purchases plus interest over time.
Analyze an expansion project and make a decision whether the project should be accepted on the basis of standard capital budgeting techniques. – • Problems
• Npv>0 we do project
foreclosure – the legal proceedings initiated by a creditor to repossess the collateral for loan that is in default
Demand-pull inflation – Higher prices as a result of consumers wanting to buy more goods and services than producers supply
Temporary accounts – Accounts used to accumulate information until it is transferred to the owners capital account
Term structure of interest rates – The relationship b/w nominal interest rates on default free, pure discount securities and the time to maturity; that is , the pure time value of the money.
preferred stock – dividends paid before common stock dividend paid where owners receive fixed dividend
Annual percentage rate – The interest rate charged per period multiplied by the number of periods per year.
Cash flow at disposal of an asset is calculated as the disposal value plus the ________ on the loss.
Hedge Fund – Have large minimum investments, marketed towards instiutions and individuals with high net worth, use money to buy various securities, less regulations than mutual funds
Smart Card – A plastic card with microchip that both stores and transfers information.
Credit card – Plastic card that authorizes goods for future payment
Cаsh flоw аt dispоsаl оf an asset is calculated as the disposal value plus the ________ on the loss.
Gastos de explotación – mp+mo+gg
Over-the-counter (OTC) – requires dealers to negotiate directly with one another to trade stocks (penny stocks or low trading stocks)
sensitivity analysis – investigation of what happens to NPV when only one variable changed
PPP holds up well over the very _____run ; and the theory holds better for countries with relatively _____inflation and ________ capital markets. – long, high , under-developed
compound interest – interest computed on the sum of the principal and previously earned interest

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