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61FIN2FIM - FINANCIAL MANAGEMENT

TUTORIAL 1 - INTRODUCTION TO FINANCE & FINANCIAL MARKETS

The following questions must be attempted before the tutorial class.

Part 1 (tutorial 1)

1. 1-5
2. 1-6
3. 1-7
4. What are the three basic areas in finance?
5. What are the four types of firms? What are advantages and disadvantages of each type? Why
do corporations dominate the economy?
6. What are the financial decisions made by a manager of a firm? Give two examples of each
type.
7. Distinguish between real assets and financial assets. Give two examples of each type.
8. What are the three critical factors in finance? Discuss the importance of these factors.
9. What is the primary objective of corporate financial decision making?
10. What is agency problem? Why do they exist within a corporation? How to mitigate agency
problems?
11. What is a firm’s intrinsic value? Its current stock price? Is the stock’s “true” long-run value
more closely related to its intrinsic value or to its current price?

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