...True/False questions 1. True 2. True 3. False 4. True 5. False 6. True 7. False 8. False 9. False 10. True Essay questions 1. A highly developed and efficient financial system is essential to ongoing economic growth and prosperity. Discuss the component parts that form a financial system and the relevance of the above statement. A financial system consists of financial institutions, financial instruments and financial markets. Financial institutions are classified into five categories according to where they source their funds from and who uses their funds. These include: depository financial institutions e.g. banks; investment and merchant banks; contractual savings institutions e.g. insurance companies; finance companies and general financiers; unit trusts e.g. property trusts. Financial instruments are documents that entitle holders to future cash flows. They are classified into three categories: equity e.g. ordinary share; debt e.g. loan; derivatives e.g. futures contract. Financial markets are the means by which funds are transferred in financial systems and are broadly divided into money markets and capital markets, which are further split into primary and secondary markets. Examples of financial markets include stock market and foreign exchange market. 1 The primary function of the financial system is to facilitate the flow of funds from those who have surplus funds to those who have a shortage of funds. By providing a range of investment and borrowing...
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...Financial Condition Analysis, Chapter 9 Problems: P 9.1-9.4, 9.8 & 9.11 HM 707 Health Management Foundations II Problem 9.1 Find the following values for a lump sum assuming annual compounding: a) The future value of $500 invested at 8 percent for one year: FVN = FV1= PV × (1 +I)N = $500 x (1 + 0.08) = $500 x 1.08 = $540 b) The future value of $500 invested at 8 percent for five years: FVN = FV5= PV × (1 +I)N = $500 x (1 + 0.08)5 = $500 x (1.08)5 = $734.66 c) The present value of $500 to be received in one year when the opportunity cost rate is 8 percent (discounting): PV = FVN = $5001 = $500 = $462.96 (1 + I)N (1 + 0.08)1 (1.08)1 d) The present value of $500 to be received in five years when the opportunity cost rate is 8 percent: PV = FVN = $5005 = $500 5 = $340.29 (1 + I)N (1 + 0.08)5 (1.08)5 Problem 9.2 Repeat problem 9.1 above, but assume the following compounding conditions: Semiannual compounding, N= 2 x 4 = 8 % and I = 8 / 2 = 4% per semiannual period. Therefore here are the solutions: a) The future value of $500 invested at 8 percent for one year: FVN = FV1= PV × (1 +I)N = $500 x (1 + 0.04)2 = $500 x (1.04)2 = $540.80 b) The future value of $500 invested at 8 percent for five years: FVN = FV5= PV × (1 +I)N = $500 x (1 + 0.04)10 = $500 x (1.04)10 = $740.12 c) The present value of $500 to be received in one year when the opportunity cost rate is 8 percent...
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...AFIN310 Issues in Applied Finance Financial Planning Assignment: Questions & Answers General Questions 1. Is an introduction / executive summary and conclusion required? No. You are to answer each question and keep to a total maximum of 15 pages, excluding cover page. No marks will be provided for anything written on page 16 or beyond. Students are recommended to refer to the mark allocation when answering each question. 2. Is specific formatting required? Eg The font you can use is Calibri, size 12. The document should have 1.5 spacing There are no specific formatting requirements, unless there are standard university or department formatting criteria of which students should be aware. 3rd year students are expected to submit assignments which are easy to read and look professional. 10 marks are allocated to presentation, length, references and bibliography. Question 1 3. Question 1(a) are real-life examples required or I can simply make-up an example? Personal and/or made-up examples will not be sufficient. There are numerous Australian real cases that can be referenced. The preamble to the question refers to "Australian scandals involving financial planning firms, practices and advice". You are required to limit the use of examples to publically available information about the provision of financial advice in Australia. 4. Question 1(a) How many examples will be considered sufficient? Marks are not allocated based on the number of examples provided, rather on the quality of...
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...value—wealth is held or measured in money terms • a standard of deferred payment—used to record indebtedness • a unit of account—transactions are priced in money terms • currency is generally divisible, portable and durable (b) Does money have to be currency? If not, what are some alternatives? • money is anything that is universally acceptable as a medium of exchange • further, money generally has the characteristics of being divisible and a store of value • examples: currency, EFTPOS, digital money. 3. Having recently inherited some money from a rich uncle, you are considering investing the funds in financial assets. You are aware that financial assets exhibit four main attributes. List and discuss these attributes. In your answer give examples to explain your points. Four attributes are: • return or yield • risk • liquidity • time-pattern of the cash flows Examples: 1. Term deposit with a bank: • generally pays a fixed interest rate until maturity • guaranteed by the bank—low risk (low return) • funds usually are not available until maturity (less liquidity) • interest paid periodically; principal repaid at maturity 2. Shares in a corporation: • generally pay a dividend twice a year—amount determined by board • no performance guarantees—higher risk (expect higher return) • usually easy to sell shares at current price through the stock exchange • dividends received half-yearly, if declared 4. The major financial institutions within the international...
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...Solutions to End-of-Chapter Questions and Problems in Multinational Finance by Kirt C. Butler Second Edition PART I Overview and Background Chapter 1 Introduction to Multinational Finance Answers to Conceptual Questions 1.1 Describe the ways in which multinational financial management is different from domestic financial management. Multinational financial management is conducted in an environment that is influenced by more than one cultural, social, political, or economic environment. 1.2 What is country risk? Describe several types of country risk one might face when conducting business in another country. Country risks refer to the political and financial risks of conducting business in a particular foreign country. Country risks include foreign exchange risk, political risk, and cultural risk. 1.3 What is foreign exchange risk? Foreign exchange (or currency) risk is the risk of unexpected changes in foreign currency exchange rates. 1.4 What is political risk? Political risk is the risk that a sovereign host government will unexpectedly change the rules of the game under which businesses operate. 1.5 In what ways do cultural differences impact the conduct of international business? Because they define the rules of the game, national business and popular cultures impact each of the functional disciplines of business from research and development right through to marketing, production...
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...CHAPTER 10 CONCH REPUBLIC ELECTRONICS, PART 1 This is an in-depth capital budgeting problem. The initial cash outlay at Time 0 is simply the cost of the new equipment, $21,500,000. The sales each year are a combination of the sales of the new PDA, the lost sales each year, and the lost revenue. In this case, the lost sales are 15,000 units of the old PDA each year for two years at a price of $290 each. The company will also be forced to reduce the price of the old PDA on the units they will still sell for the next two years. So, the total change in sales is: Sales = New sales – Lost sales – Lost revenue Year 1 = (74,000 × $360) – (15,000 × $290) – [(80,000 – 15,000) × ($290 – 255)] = $20,015,000 Year 2 = (95,000 × $360) – (15,000 × $290) – [(60,000 – 15,000) × ($290 – 255)] = $28,275,000 | |Sales |Year 1 |Year 2 |Year 3 |Year 4 |Year 5 | | |New |$26,640,000 |$34,200,000 |$45,000,000 |$37,800,000 |$28,800,000 | | |Lost sales |–4,350,000 |–4,350,000 | | | | | |Lost revenue |–2,275,000 |–1,575,000 | | | | | |Net sales |$20,015,000 |$28,275,000 ...
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...Case 2 -‐ Solution / expected answers Part 1 Question 1 The correct answer is: 20.00% 18.00% Annual Return Annualized Volatility 15.00% Explanation: Using the return from Technical Document 4 we compute the annual return: !"!!"!!"#$ 3314.46 r= −1= − 1 = 20.00% !"!!"!!"#$ 2762.05 Using the same formula we compute the returns between each trading day: !"!!"!!"#$ !"!!"!!"#$ r! = − 1 = 0.0916% … r!"! = − 1 = −0.8024% !"!!"!!"#$ !"!!"!!"#$ After that, we use these returns to compute for the annualized volatility: Market Risk Premium σ= 1 −1 ! ! − ! = 18.00% !!! Finally, we compute the market risk premium: = − = 20.00% − 5.00% = 15.00% Question 2 The correct answer is: Equity Beta Cost of Equity 0.8 17.00% Explanation: We compute the equity Beta using the relevant formula from Technical Document 4. All necessary inputs are already obtained: ...
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...Chapter 1 The Corporation 1-1. What is the most important difference between a corporation and all other organization forms? A corporation is a legal entity separate from its owners. This means ownership shares in the corporation can be freely traded. None of the other organizational forms share this characteristic. 1-2. What does the phrase limited liability mean in a corporate context? Owners’ liability is limited to the amount they invested in the firm. Stockholders are not responsible for any encumbrances of the firm; in particular, they cannot be required to pay back any debts incurred by the firm. 1-3. Which organization forms give their owners limited liability? Corporations and limited liability companies give owners limited liability. Limited partnerships provide limited liability for the limited partners, but not for the general partners. 1-4. What are the main advantages and disadvantages of organizing a firm as a corporation? Advantages: Limited liability, liquidity, infinite life Disadvantages: Double taxation, separation of ownership and control 1-5. Explain the difference between an S corporation and a C corporation. C corporations much pay corporate income taxes; S corporations do not pay corporate taxes but must pass through the income to shareholders to whom it is taxable. S corporations are also limited to 75 shareholders and cannot have corporate or foreign stockholders. 1-6. You are a shareholder...
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...On the balance sheet under Fixed Assets, you find Gross Block, Accumulated Depreciation and Net Block. Net Block is simply Gross Block minus Accumulated Depreciation. Also, there is a depreciation expense entry in the income statement. Using these, can you think of a ratio which would tell the average age of the company’s fixed assets? Average age of the company’s fixed assets = Accumulated Depreciation / Depreciation Expense From a valuation standpoint, a very widely used ratio is the price to earnings ratio (P/E). This is the ratio of the market cap to the last year’s reported earnings of the company. There is another very widely used ratio called Enterprise Value by EBITDA. The Enterprise Value (EV) of a company is total debt plus the market capitalization of the company minus cash and equivalents with the company. Think of it as the price that a private buyer will have to pay for the whole company – he will have to buy out the equity of the company at the market capitalization, then pay off the debt at book value. For the transaction, the buyer can use the cash and equivalents available with the company. EV/EBIDTA is a very important ratio in private equity circles. This ratio, it is said, is a pure valuation ratio - it compares the value of a business, free of debt, to earnings of the business less interest expense. At the current market price, compute the P/E and EV/EBITDA of TCS and INFOSYS. For EV/EBITDA, you will have to take the current market capitalization...
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...1, It is the minimum rate of return the firm has to earn on its existing assets. If the firm earns more than this, value is created. 2,I would choose to use book values for debt since it is closer to the market value than the equity book value. 4, Because interest expense is tax-deductible. 5, The primary advantage of the DCF model is its simplicity. The disadvantages are the model is applicable only to firms that pay dividends and requires a constant dividend growth rate. The share price and most recent dividend can be observed but the dividend growth rate has to be estimated. Two common methods of estimating are to use analyst’s earnings and payout forecasts or to determine some appropriate average historical growth rate from the past data. 7, Find YTM of the outstanding bonds of the firm 8, a, It only considers the dividend yield component of the required return on the equity. b,This is the current yield only and is not the promised yield to maturity. Also, is based on the book value of the liability and ignoring the taxes. c, When tax is taken into the consideration, cost of equity would be higher than the cost of debt. Questions and Problems 1, Total weight=180(45)+140(27)=11880 weight A= (180*45)/11880=0.6818 weight B=(140*27)/11880=0.3181 2, Total =2950+3700=6650 ER=(2950/6650)(0.11)+(3700/6650)(0.15)=0.1322=13.22% 4, ER=0.14(Wx)+0.105(1-Wx) 0.124=0.14Wx+0.105-0.105Wx Wx=0.54286 Stock X=0.54286*10000=5428.57 Stock Y=10000-5428.57=4571...
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...Interview Questions & Answers You Need to Know A Production http://breakingintowallstreet.com http://www.mergersandinquisitions.com Copyright 2010 Capital Capable Media LLC. All Rights Reserved. Notice of Rights No part of this book may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. http://breakingintowallstreet.com http://www.mergersandinquisitions.com 2 Table of Contents Introduction .................................................................................................................. 4 Fit / Qualitative Questions ........................................................................................... 6 Analytical / Attention to Detail Questions & Suggested Answers ....................... 7 Background / Personal Questions & Suggested Answers ................................... 10 “Career Changer” Questions & Suggested Answers .......................................... 14 Commitment Questions & Suggested Answers................................................... 17 Culture Questions & Suggested Answers ............................................................ 20 “Future” Questions & Suggested Answers .......................................................... 23 Strengths / Weaknesses Questions & Suggested Answers ................................. 25 Team / Leadership Questions & Suggested Answers ......................
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...Marketing Advertising and Sales [Edit categories] Marketing Advertising and Sales Questions Answers.com > Wiki Answers > Categories > Business & Finance > Business and Industry > Marketing Advertising and Sales > Does advertising make people buy things they don't need? Best Answer this depends on the individual personality, economic condition and the way a company advertises their product and the discount offers given to the product.. Few know thr limitations and act accordingly while there r few who though a product is necessary or not will buy it and the reason can be varied like show-off among their friends and relatives, too much of money and an intention of purchasing whatever they need. Thus advertising has an impact but surely it doesnt influence all equally in purchasing a commodity Related Answers: * Why people in the US buy things they don't need? because they like to show off with how much they own * Dont people answer questions on this thing? I don't think they do! I never get any answers! Although I dont know if I asked the questions Related Answers: * What color makes people buy things? Orange, that's why home depot is orange * What is the study of how a country makes and uses the things its people need? economics * Dont people answer questions on this thing? I don't think they do! I never get any answers! Although I dont know if I asked the questions * What makes people do dumb things? dumb thinking. Related...
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...Answers Home Ask a Question Sign In Categories Arts & Humanities Beauty & Style Business & Finance Cars & Transportation Computers & Internet Consumer Electronics Dining Out Education & Reference Entertainment & Music Environment Family & Relationships Food & Drink Games & Recreation Health Home & Garden Local Businesses News & Events Pets Politics & Government Pregnancy & Parenting Science & Mathematics Social Science Society & Culture Sports Travel Yahoo Products More from Yahoo Yahoo Mail News Sports Finance Food Tech Weather Screen Flickr Apps Yahoo News Digest Mail Finance Sports Tools Help Feedback About International View Desktop Version Terms Privacy Can someone please critique my mini paragraph essay? We had to write a paragraph essay on a certain topic; here is mine: Truth: What is truth besides a way to desensitize immorality? Is there a law for... Update: I understand what you mean for the "false" part, and i had to look at it for a little while, but in the end i wanted to keep it. It sounds weird, but to me... Update 2: Well, my last sentence is the answer to the way you feel. Plus, i dont really care how you feel over the matter, i was asking how it was written. 6 answers · Polls & Surveys Best Answer I'd rather it read " for without truth there would be no untruth" the "false" bit just feels weird. "When truth is counterfeited...
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...Behavioral Interviews General Tips Most candidates approaching finance interviews stress over the technical questions. However, answering a behavioral question in a “less than desirable way” or fumbling around without a legitimate answer can do even more damage than missing a technical question. Analysts will spend 80+ hours per week with their co-workers, so proving you are someone they will enjoy being around is more important than proving you know how to work your way through a discounted cash flow model. That does not mean that we suggest you not thoroughly prepare for the technical aspect of the interview as well! Once you get the job, your firm will put you through a rigorous training session. Your company will assume you have little prior financial knowledge so they are not looking for the next finance wizard or CFO — they are looking for someone they will be comfortable working with for the next two years and who will be able to handle the demands of the job. First impressions are crucial so as you walk through the door and give your interviewer a firm handshake, make sure to wear a friendly smile and relax if you are nervous. You won’t die, we promise. Try to turn any nervousness into positive energy that can be interpreted as enthusiasm for the position. The person across the table could be sitting there for eight straight hours interviewing 16 kids in a row. He/she will get bored if there is no passion in your voice and no conviction in your speech. This...
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...An important part of preparing for summer placements is being able to answer personal questions about yourself and your beliefs. In fact, this could be said to be the most critical part of your preparations, as all interviews, be it in Finance, Consulting, Marketing or any other field, always begin with a round of ‘fit’ questions. Such ‘fit’ questions can be used by you, if well prepared, to draw the interview into areas of your strengths, shaping your answers such as to showcase your best achievements. A well thought out ‘story’ gives you the confidence to answer these questions, and set a great platform for you to then show off your capabilities for the internship on offer. Some important Do’s and Don’ts that should be followed are: * Always have a ‘story’ in mind. Especially when answering general questions like “introduce yourself” or “walk me through your resume”. By ‘story’ here we mean that your points should be interlinked in some way, either progressively leading to something or highlighting different scenarios where you showcased a particular set of traits. * It helps to know what the required traits are in the roles that you are being offered, and then show off instances in the past where those traits have emerged. * When talking about goals and future plans, always make sure you sound plausible. Also, your destination (say where you see yourself in five years) should be backed up by a) skills/traits that you already have b) Skills that you will acquire...
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