Question

select answer Accounting profit, Agent ,Capital gains (losses), Capital market, Corporation or company, Diversification, Dividends, Economic profit, Explicit costs, Implicit costs, Limited liability, Partnership, Portfolio, Principal or owner ,Principal-agent problem, Real return to corporate stock ,Retained earnings ,Risk ,Risk pooling ,Shareholders ,Sole proprietor, Stock option

a

The liability of the company is limited to the value of the company's assets.

b Payments made from after-tax profits to company shareholders.

c People that invest in corporations and therefore are the owners.

d A person, usually a manager, who works in a corporation and is directed to follow the corporation's interests.

e A set of financial institutions that funnels financing from investors into bonds and stocks.

f A combination of assets that is designed to secure an income from investing and to reduce risk.

g A business owned jointly by two or more individuals, who share in the profits and are jointly responsible for losses.

h The measured financial costs.

i Arises when the principal cannot easily monitor the actions of the agent, who therefore may not act in the best interests of the principal.

j

The difference between revenue and the sum of explicit and implicit costs.

Answer 1

A.LIMITED LIABILITY:The liability of the company is limited to the value of the company's assests.

b.DIVIDENDS:Payments made from after -tax profits to company shareholders.

C.SHAREHOLDERS:People that invest in corporations amd therefore are the owner.

D.AGENT: A person,usually a manager,who works in a corporation and is directed to follow the corporation's interest.

E.CAPITAL MARKET: A set of financial institutions that funnels financing from investors into bonds and stocks.

F.PORTFOLIO: A combination of assests that funnels financing from investors into bonds and stocks.

G.PARTNERSHIP: A business owned jointly by two or more individuals,who share in the profits and are jointly responsible for losses.

H.EXPLICIT COSTS: The measured financial cost

I.PRINCIPAL-AGENT PROBLEM: arises when the principal cannot easily monitor the action of the agent,who therefore may not act inthe best interest of the principal.

J.ECONOMIC PROFIT: The difference between revenue and the sum of explicit and implicit costs.