FIR 3410 Test 1 Terms


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Match the terms to their definitions:

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Sarbanes-Oxley Act




S Corporation

Limited Liability Company (LLC)

Limited Liability Partnership (LLP)

Intrinsic Value

Market Price

Marginal Investor


Corporate Raider

Hostile Takeover

Stockholder Wealth Maximization

Business Ethics

Spot Markets

Future Markets

Money Markets

Capital Markets

Primary Markets

Secondary Markets

Private Markets

Public Markets


Investment Banks (iBanks)

Commercial Banks

Financial Service Corporations

Mutual Funds

Money Market Funds

Physical Location Exchanges

Over-the-Counter (OTC) Markets

Dealer Market

Closely held corporation

Publicly Owned Corporation

Going Public

Initial Public Offering (IPO) Market

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A special designation that allows small businesses that meet qualifications to be taxed as if they were a proprietorship or a partnership rather than a corporation

An estimate of a stock's "true" value based on accurate risk and return data. It can be estimated, but not measured precisely.

A firm that offers a wide range of financial services, including investment banking, brokerage operations, insurance, and commercial banking

Organizations that pool investor funds to purchase financial instruments and thus reduce risks through diversification

The market for stocks of companies that are in the process of going public

The stock value based on perceived but possibly incorrect information as seen by the marginal investor.

A corporation that is owned by a relatively large number of individuals who are not actively involved in the firm's management

Any financial asset whose value is derived from the value of some other "underlying" asset

The primary financial goal for managers of publicly owned companies implies that decisions should be made to maximize the long-run value of the firm's common stock

The acquisition of a company over the opposition of its management

An organization that underwrites and distributes new investment securities and help businesses obtain financing

A law passed by Congress that requires the CEO and CFO to certify that their firm's financial statements are accurate.

An unincorporated business owned by two or more persons

A company's attitude and conduct towards its employees, customers, community, and stockholders

The situation in which the actual market price equals the intrinsic value, so investors are indifferent between buying and selling a stock

Individuals who target corporations for takeover because they are undervalued

Include all facilities that are needed to conduct security transactions not conducted on physical location exchanges

THe act of selling stock to the public at large by a closely held corporation or its principal stockholders

Formal organizations having tangible physical locations that conduct auction markets in designated ("listed") securities

The financial markets in which funds are borrowed or loaned for short periods (less than one year).

Markets in which securities and other financial assets are traded among investors after they have been issued by corporations

Markets in which corporations raise capital by issuing new securities

A corporation that is owned by a few individuals who are typically associated with the firm's management

An investor whose views determine the actual stock price

The markets in which participants agree today to buy or sell an asset at some future date

Mutual funds that invest in short-term, low-risk securities and allow investors to write checks against their accounts

An unincorporated business owned by one individual

The financial markets for stocks and for intermediate- or long-term debt (one year or longer).

The traditional department store of finance serving a variety of savers and borrowers

Markets in which transactions are worked out directly between two parties

Markets in which standardized contracts are traded on organized exchanges

A large collection of brokers and dealers, connected electronically by telephones and computers, that provides for trading in unlisted securities

Used for professional firms in the fields of accounting, law, and architecture. It provides personal asset protection from business debts and liabilities but is taxed as a partnership.

The markets in which assets are bought or sold for "on-the-spot" delivery