Question

Finance professionals make decisions that fall into three distinctive areas: corporate finance, capital markets, and investments. Below is a set of decisions made by finance professionals. Categorize the decisions according to the area of finance to which they belong.

a. Managers at a bank need to decide on the interest rate that they must charge for the loans that they make to their prime customers.
b. William must make a decision on how to cut costs so that his company can generate extra cash flow to acquire assets.
c. As a technical trader, you will be analyzing investor psychology and making investment decisions based on how investors behave during certain situations.

Answer 1

The correct categories are;

a. Managers at a bank need to decide on the interest rate that they must charge for the loans that they make to their prime customers- Capital markets

b. William must make a decision on how to cut costs so that his company can generate extra cash flow to acquire assets - Corporate finance

c. As a technical trader, you will be analyzing investor psychology and making investment decisions based on how investors behave during certain situations - Investments

Step-by-step explanation:

a. Capital market is a system of financing that has to do with the putting up of capital by means including the buying ad selling of long term depth and securities

b. Corporate finance is the financial division concerned with the manner of handling of funding sources of the corporation

c. Investment involves ideas relating allocating funds for a purpose or for a project