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13 Cards in this Set
- Front
- Back
What is reported on a balance sheet
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assets, liabilities, equity, and investments by owners at a moment in time.
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What is reported on an income statement and statement of retained earnings?
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revenues, expenses, gains, losses, and distributions to owners over a period of time.
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What are the right and wrong ways to use the "Notes to the financial statements"
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RIght way: To amplify information and to be in accordance with GAAP.
Wrong Way: to correct improper presentations. |
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Users with Direct Interests in FInancial Statements
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1) Investors or potential investors
2) Suppliers and creditors 3) Employees 4) Management |
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Users with Indirect interests in Financial Statements
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1) Financial advisers and analysts
2) Stock markets or exchanges 3) Regulatory authorities |
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How do internal users use financial statements
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to assess financial strengths and deficiencies, to evaluate performance results and past decisions, and to plan for future financial goals and steps toward accomplishing them.
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Indifference curve
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combinations of portfolios having equal utility to the investor.
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The steeper the indifference curve________
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the more risk averse an investor is.
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The Higher the curve...
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the greater is the investor's level of utility.
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What are the 2 most important decisions involed in managing a company's portfolio?
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1. The amount of money to invest
2. The securities in which to invest. |
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Maturity Matching
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Arranging a portfolio so that the maturity of funds will coincide with the need for funds will maximize the average return on the portfolio and provide increased flexibility.
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Long Hedges
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Futures contracts that are purchased to protect against price increases.
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Short Hedges
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Futures contracts that are sold to protect against price decines
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