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1. Separate the following list of assets into real assets and financial assets. What are the distinguishing characteristics of each type of asset? Delivery TruckFactory

1. Separate the following list of assets into real assets and financial assets. What are the distinguishing characteristics of each type of asset? Delivery TruckFactory BuildingCorporate BondInventoryCorporate StockLandNote ReceivableComputer

  • 2. What is the primary factor that determines the price of securities? Can you think of another factor that might significantly affect how investors value the first factor? (Think hard: this second factor isn't mentioned in the chapter.)
  • 3. Discuss the differences, similarities, and ties between finance and accounting.
  • 4. Discuss the relationship between finance and economics.
  • 5. How does the activity of investors in financial markets affect the decisions of executives within the firm?
  • 6. What are the significant financial advantages and disadvantages of the sole proprietorship/partnership form in comparison with the corporate form?
  • 7. Is limited liability a meaningful concept? Why or why not? And if so, for whom?
  • 8. What conflict(s) of interest can you imagine arising between members of the community in which a company operates and some other stakeholders? (Hint: Think about pollution.)
  • 9. Is the agency problem an ethical issue or an economic issue?
  • 10. Compare and contrast the terms

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