Introduction to Finance

Freshman Finance Majors Professor Cody Tehan

Introductory Film on financial basicshttps://www.youtube.com/watch?v=RsdOkaJ7v5Q

Definitions and financial term definitions

What is Finance?

DefinitionFinance is the study of how to make good decisions that involve money. Such as what assets to buy, how to pay for those assets, and how much cash to keep on hand.

Areas of financeCan you name three of the five areas of finance?

Answer1. Corporate Finance2. Personal Finance3. Investments and Portfolio Management4. Financial markets and institutions5. Public Finance

Lesson 1.2 - Goals of the Firmhttps://www.youtube.com/watch?v=auoKKGVKqMQ&nohtml5=False

Potential Goals of a FirmWhat are some of the potential goals of a firm or company?

Answer

1.Maximizing shareholder value2.Maximising market share3.High quality products and services4.Maximizing income

How a firm sets reasonable and profitable goalsWhy can’t a company provide more of everything?

AnswerBecause of limited resources and tradeoffs associated with adding products and services. The right amount enables a firm’s benefits>costs.

Difficutlies of Value Maximization

Why is value maximization difficult for a firm or company?

Answer-Value is not directly observable

- Oftentimes forecasted financial statements are susceptible to human hrror because they are estimated.

-Also, the market value of a firm is a “noisy” estimate

SmartBoard Linkhttp://exchange.smarttech.com/details.html?id=3e8f94f2-137f-40fa-92d6-782974b641b8

-I utilized this SmartBoard because I liked the feature of utilizing flash card decks to challenge what the students have learned from the video, lecture, and discussion. In addition, this technique will keep students engaged and active during class time.