1. Describe the type of people who use the financial markets. The financial markets are used by people who have extra money now and want it to grow for their future. They offer this capital through the financial markets to others who have good ideas and opportunities, but need the capital to implement them. These types of people are denoted as Type 2 and 3 people in Figure 1.1. 2. What is the purpose of financial management? Describe the kinds of activities that financial management involves. Financial management is the process of making decisions for the acquisition, use, and repayment of capital. Decisions for the acquisition of capital can include how the business is organized, what type of capital should be obtained, and how much capital should be obtained. Decisions for the uses of capital include what new business projects to invest in, what capital to retain to fund ongoing projects, and to reduce taxation. Decisions for the repayment of capital involve paying capital back t...