...TUTORIAL 1 - TUTORIAL DISCUSSION QUESTIONS 2. (a) Discuss the role of money in a financial system. • money is a financial asset that facilitates financial and economic transactions • a medium of exchange—swapped for goods and services • a store of 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...
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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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...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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...Chapter 1 An Overview of Financial Management ANSWERS TO END-OF-CHAPTER QUESTIONS 1-1 a. A proprietorship, or sole proprietorship, is a business owned by one individual. A partnership exists when two or more persons associate to conduct a business. I contrast, a corporation is a legal entity n created by a state. The corporation is separate and distinct from its owners and managers. b. In a limited partnership, limited partners’ liabilities, investment returns and control are limited, while general partners have unlimited liability and control. A limited liability partnership (LLP), sometimes called a limited liability company (LLC), combines the limited liability advantage of a corporation with the tax advantages of a partnership. A professional corporation (PC), known in some states as a professional association (PA), has most of the benefits of incorporation but the participants are not relieved of professional (malpractice) liability. c. Stockholder wealth maximization is the appropriate goal for management decisions. The risk and timing associated with expected earnings per share and cash flows are considered in order to maximize the price of the firm’s common stock. d. Social responsibility is the concept that businesses should be partly responsible for, and thus bear the costs of, the welfare of society at large. Business ethics can be thought of as a company’s attitude and conduct toward its employees, customers, community, and stockholders. A firm’s commitment...
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...Question 1 2 out of 2 points | | | ________________ involves making decisions relating to issuing and investing in stocks and bonds.Answer | | | | | Selected Answer: | Investment management | Correct Answer: | Investment management | | | | | Question 2 2 out of 2 points | | | Economists use a ___________________ framework to explain how the prices and quantities of goods and services are determined in a free-market economic system.Answer | | | | | Selected Answer: | supply-and-demand | Correct Answer: | supply-and-demand | | | | | Question 3 0 out of 2 points | | | The goal of the financial manager in a profit-seeking organization is to maximize:Answer | | | | | Selected Answer: | the value of perquisites. | Correct Answer: | the owners’ wealth. | | | | | Question 4 0 out of 2 points | | | ________________ involves the sale or marketing of securities, the analysis of securities, and the management of risk through portfolio diversification.Answer | | | | | Selected Answer: | financial management | Correct Answer: | investments | | | | | Question 5 2 out of 2 points | | | Maximizing _____________________ is accomplished through effective financial planning and analysis, asset management, and the acquisition of financial capital.Answer | | | | | Selected Answer: | the owners’ wealth. | Correct Answer: | the owners’ wealth. | | | ...
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... | |Assessment Code |HND Bus-Unit 2/Managing Finance May 2013 | |Hand Out Date |27th May 2013 |Hand In Date |26th July 2013 | |Lecturer(s) |Mr. Haider |Internal Verifier | | | |Mr. David Ogila | | | | |Mr. Daniel R. | | | |Sources of information |Course Notes / Slides / Activities / Handouts. | | |Recommended Learning Textbooks: | | |BPP Business Essentials Managing Finance | |...
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...The four players in the money supply process include Choose one answer. a. banks, depositors, borrowers, and the U.S. Treasury. b. banks, borrowers, the central bank, and the U.S. Treasury. c. banks, depositors, the central bank, and borrowers. d. banks, depositors, the central bank, and the U.S. Treasury. Correct Marks for this submission: 1/1. Question 2 Marks: 1 If a bank has excess reserves of $10,000 and demand deposit liabilities of $80,000, and if the reserve requirement is 20 percent, then the bank has actual reserves of Choose one answer. a. $16,000. b. $20,000. c. $36,000. d. $26,000. Correct Marks for this submission: 1/1. Question 3 Marks: 1 Because of the adverse selection problem, Choose one answer. a. lenders are reluctant to make loans that are not secured by collateral. b. lenders will write debt contracts that restrict certain activities of borrowers. c. good credit risks are more likely to seek loans causing lenders to make a disproportionate amount of loans to good credit risks. d. lenders may refuse loans to individuals with high net worth, because of their greater proclivity to "skip town." Correct Marks for this submission: 1/1. Question 4 Marks: 1 The effect of an open market purchase on reserves differs depending on how the seller of the bonds keeps the proceeds. If the proceeds are kept in ________, the open market purchase has no effect on reserves; if the proceeds are kept as ________...
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...BRAINTEASERS AND GUESSTIMATES Vault Guide to Finance Interviews Brainteasers and Guesstimates Stress Tests Perhaps even more so than tough finance questions, brainteasers and guesstimates can unnerve the most icy-veined, well-prepared finance candidate. Even if you know the relationships between inflation, bond prices and interest rates like the back of a dollar bill, all your studying may not help you when your interviewer asks you how many ping pong balls fit in a 747. That is partly their purpose. Investment bankers and other finance professionals need to be able to work well under pressure, so many interviewers believe that throwing a brainteaser or guesstimate at a candidate is a good way to test an applicant’s battle-worthiness. But these questions serve another purpose, too – interviewers want you to showcase your ability to analyze a situation, and to form conclusions about this situation. It is not necessarily important that you come up with a correct answer, just that you display strong analytical ability Acing Guesstimates We’ll start by discussing guesstimates, for which candidates are asked to come up with a figure, usually the size of a market or the number of objects in an area. Although guesstimates are more commonly given in interviews for consulting positions, they do pop up in finance interviews as well. Practicing guesstimates is a good way to begin preparing for stress questions in finance interviews, as they force candidates to think aloud – precisely...
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...| Bret Greeno | Course | Principles of Finance | Test | Ch. 1 Quiz | Started | 8/23/15 8:58 PM | Submitted | 8/23/15 9:00 PM | Due Date | 8/23/15 11:59 PM | Status | Completed | Attempt Score | 10 out of 10 points | Time Elapsed | 2 minutes out of 15 minutes | Results Displayed | Correct Answers | * Question 1 1 out of 1 points | | | As individual legal entities, corporations assume liability for their own debts, so the shareholders hold: | | | | | Correct Answer: | only limited liability. | | | | | * Question 2 1 out of 1 points | | | Individuals who provide small amounts of capital and expert business advice to small firms in exchange for an ownership stake in the firm are referred to as: | | | | | Correct Answer: | angel investors. | | | | | * Question 3 1 out of 1 points | | | An angel investor differs from a venture capitalist because of the: | | | | | Correct Answer: | size of investment. | | | | | * Question 4 1 out of 1 points | | | This should be the primary objective of a firm as it may actually be the most beneficial for society in the long run. | | | | | Correct Answer: | Maximizing shareholder value | | | | | * Question 5 1 out of 1 points | | | Which of the following statements is correct? | | | | | Correct Answer: | Sole proprietorships are easy to start. | | | | | * Question 6 1 out of 1 points | | | The practice...
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...Corporate Finance 1 Group assignment (Version 1) Group assignment instructions The objective of the group assignment is to promote deep thinking on a selected range of topics and to develop your practical quantitative modelling skills. The assessment is a group assignment and should be performed in your allocated groups (usually between 4 and 6 people). Seeking assistance from anyone outside your group or providing assistance to any other group constitutes academic misconduct and will be taken seriously by the university (however, you are allowed to provide assistance to the other members of your own group). If there is any significant similarity between the reports submitted by two or more groups for a particular question, then those group leaders will score zero for that question in the assignment. The mark for the rest of the group will be unaffected. Further action may be taken by the university against any specific group members who have obtained or provided assistance The assignment includes 6 questions (each with sub-parts). Your group must attempt one question for each person in the group (minimum 4 and maximum 6). Four of the questions are compulsory and must be attempted by all groups. The remaining two questions are optional and will be attempted by groups with more than 4 people (or individuals in a group of 4 who would like to lead 2 questions). Each member of your group should take the role of leader for 1 or 2 questions. It is expected that the leader...
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...of Business and Economics Department of Accounting and Finance EXAM CODES: AFF/AFW2401 TITLE OF PAPER: COMMERCIAL BANKING AND FINANCE EXAM DURATION: 3 hours READING TIME: 10 minutes THIS PAPER IS FOR STUDENTS STUDYING AT: (office use only - tick where applicable) Berwick Clayton Peninsula Distance Education Open Learning Caulfield Gippsland Sunway Hong Kong Other (specify) During an exam, you must not have in your possession, a book, notes, paper, calculator, pencil case, mobile phone or any other material/item which has not been authorised for the exam or specifically permitted as noted below. Any material or item on your desk, chair or person will be deemed to be in your possession. You are reminded that possession of unauthorised materials in an exam is a disciplinable offence under Monash Statute 4.1. AUTHORISED MATERIALS CALCULATORS YES NO (Permitted calculators: Citizen SRT-135, Casio FX82MS scientific calculator, the Casio FX82AU scientific calculator, and Sharp EL-735 financial calculator, or calculators with an 'approved for use' Faculty label) OPEN BOOK YES NO SPECIFICALLY PERMITTED ITEMS YES NO if yes, items permitted are: This paper consists of six (6) questions and one (1) formula sheet printed on a total of eighteen (18) pages. Answer Question 1 in the scriptbook provided. Answer all other questions in the space provided on the question paper. Students must answer ALL questions. This exam is worth a total of 70 marks. PLEASE CHECK...
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...FREQUENTLY ASKED QUESTIONS (FAQs) ON ISLAMIC BANKING Prepared by Mr. Imran Ahmad Mr. Ghulam Shabbir Islamic Banking Department State Bank of Pakistan Karachi. PART 1: RIBA AND INTEREST......................................................................................... 4 Question No. 1). What is Islamic Banking? ................................................................................................ 4 Question No. 2). What is the philosophy of Islamic banking?.................................................................... 4 Question No.3) What is Meant By Riba? .................................................................................................... 5 Question No.4) What is interest? Is there any difference between interest and Riba? ............................ 5 Question No. 5) What are the different kinds of Riba?.............................................................................. 6 Question No. 6). What are the revelations/verses in Holy Quran regarding prohibition of Riba/interest? ........................................................................................................................................................................ 7 Question No. 7) What are the sayings/Ahadith about Riba/Interest? .................................................... 10 Question No.8) Are there any injunctions against Riba/usury in religious texts other than Holy Quran? .......................................
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...possible questions that the interviewee maybe asked at the interview. 4. Write the appropriate answers to the questions. (Merit will be given to question relevant to your job advertisements and responses that have depth and reflect maturity.) 5. List three questions and interviewee may ask at this job interview. 6. Write appropriate responses to each question in ( 5 ) ANSWER NO.2 : That are several attribute that the company is looking for in the candidate : a. Candidate must possess at least a Bachelor’s Degree, Post Graduate Diploma, Professional Degree, Business Studies / Administration / Management, Finance / Accountancy / Banking or equivalent. b. Applicants must be willing to work in Kuala Lumpur City. c. Applicants should be Malaysian citizens or hold relevant residence status. d. Willing to work under pressure with minimum supervision. e. Required languages in English and Bahasa Malaysia. f. Mature, multi-tasking, committed, positive work attitude with excellent interpersonal and communication skills. g. Computer literate and knowledge in MS Word and Excel is a must. h. This position would suit fresh graduates or those with 1-2 years of work experience. i. Fresh graduates / Entry level applicants are encouraged to apply. j. Full time positions available. ANSWER NO.3 : ...
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...Details - All Questions Question 1. Question : (TCO A) Jean and Jim have liquid assets of $3,600 and other assets of $42,800. Their total liabilities equal $26,000. What is their net worth? (Show all work.) Total Assets $46,400 Less: Total Liabilities 26,000 Equal: Net Worth $20,400 Liquidity: $3,600 +Other Assets: $42,800 Total Assets: $46,400 -Total liabilities: $26,000 Net Worth: $20,400 Student Answer: Instructor Explanation: Total Assets $46,400 Less: Total Liabilities 26,000 Equal: Net Worth $20,400 Points Received: Comments: 10 of 10 Question 2. Question : (TCO A) Construct a balance sheet from the following information. Be sure the format is correct. (Show all work.) Cash on hand 1,000 Bank credit card balance 1,200 Auto loan balance 13,500 Mortgage 175,000 Primary residence 205,000 Jewelry 2,000 Stocks 17,500 Coin collection 2,500 2009 Honda 20,000 Cash on hand $1,000 Stocks $17,500 Honda $20,000 Home $205,000 Jewelry $2,000 Coin Collection $2,500 Total Assets $248,000 Credit Cards $1,200 Auto Loan $13,500 Mortgage $175,000 Total Liabilities $189,700 Net Worth $58,300 Student Answer: Instructor Explanation: Assets: Cash on hand 1,000 Primary residence 205,000 2009 Honda 20,000 Jewelry 2,000 Stocks 17,500 Coin Collection 2,500 Total Assets $248,000 Net Worth $58,300 Liabilities: Bank credit cards 1,200 Auto loan 13,500 Mortgage 175,000 Total Liabilities $189,700 Points Received: Comments: 20 of 20 Question 3. Question : (TCO...
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...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 Videos: ...
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