Review Questions

Idertify and bricfly define the three areas of study in finance.

Identify the threa focal areas in business finance.

Define each of the following types of ribk

inflation risk

diversifiable risk

non$-$diversifiable risk

political risk

Identify three common components of good finandal planning.

The Concepts in Practice feature in Section $1\mathrm{.}3$ discusses the importance of data for decision$-$making. List at least three of the ways the article suggests managers can use financial statements.

Describe the role of a financial analyat in a financial institution such as a bank or investment company.

Is a dealer or a broker more likely to be a makket maker? In your answer, define the activities of a market maker.

How can an understanding of micro$-$and macrotctnomic tactors aid in small business decision$-$making?

We measure market capitalisation by multiplying the number of shares of stock outstanding by the current price per share. Go to finance

yahoo.com and determine the market capitalization of Nike, Tesla, and Walmart. Which company has the greatest market capitalization? Which company has the highest level of sales? If these are not the same companies, why do you think the company with the lower sales level has greater market capitalization?