...ECONTWO 1 Micro * Individuals (Buyer) * Sellers (Companies * Market Equilibrium * Market structure - Industry Macro * Aggregate * Household * Business Sector * Government Goals in Macro Economic Policy 1. Price Stability – Inflation → Increase in general price level → Money Supply ↑ 2. Sustainable Economic Growth 3. Full Employment Price Stability * To measure success, inflation rate must e kept at single digit (less than 10%) * An increase in price levels will reduce the value of money * Inflation rate is measured every month * Inflation rate – measures the overall increase in price level in a given time period Tao – Bank – Company – Price 10 % wage vs. 0% inflation ↓Demand -↓Price-↑Demand Deflation in Japan 1990 Life Expectancy Saving vs. Spending Saving → Government 66 % Dependent 34 % 18-64 ↓Demand = ↓Price = ↓Q Supply = ↓ # of worker = ↑unemployment = ↑ Government Rely = ↓Interest Rate 0.000001% Iceland – 7 to 8 % Economy Collapsed Largest Denominated Note Zimbabwe – One Hundred Trillion Dollars 2 World Bank – Long term loans International Monetary Fund – Short term loans * Interest * Policy Recommendation * Economic Policies How do we measure inflation rate? Government uses a “basket of goods” to determine the increase in price level Basket of goods is composed of different commodities such as food, clothing, oil, transport, utilities etc. Ex. May 2013 – P100 2014 – P110 Inflation 10% Basket of Goods | 2000 |...
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...EAST ASIAN DEVELOPMENT NETWORK (EADN) INDIVIDUAL RESEARCH PROJECT EXCHANGE RATE ARRANGEMENT IN VIETNAM: INFORMATION CONTENT AND POLICY OPTIONS Research team∗ : Vo Tri Thanh (principal researcher) Dinh Hien Minh Do Xuan Truong Hoang Van Thanh Pham Chi Quang HANOI December 2000 ∗ We would like to thank the EADN for financial support. We have benefited very much from the valuable comments from EADN on our interim report. We also thank Dr. Ivo Havinga, Dr. Perter Sturm, and Ms. Anna Lennblad for reviewing our drafts and providing valuable insight comments. In carrying out the research we have owed debts to the General Statistic Office and the State Bank of Vietnam, which provided us with data and inspiration. Finally research assistance by Do Chu Dat and Do Thi Thu Huong is highly acknowledged. Table of Contents Table of Contents List of Tables List of Figures Abbreviation Summary Chapter I Introduction Chapter II The Economic Reforms and the Exchange Rate Arrangement since 1989 II.1 An Overview of the Economic Renovation and the Financial Reforms during the period of 1989-1999 II.1.1 The Economic Renovation (Doimoi) II.1.2 Financial Sector Reforms and Monetary Instruments II.2 Exchange Rate Arrangement during the Period of 1989-1999 Chapter III Exchange Rate as a Policy Tool during the Economic Reform, 1989-1999 III.1 Exchange Rate and Inflation III.2 Exchange Rate and Economic Growth III.3 Exchange Rate and Money Supply Chapter...
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...Project 2: BUS 321-M1 Dr. Xu Problem 1: - Please use P&G’s 2009 Annual Report (PDF) to answer this problem.Refer to P&G's 2009 financial statements and the accompanying notes to answer the following questions. | (a) | What alternative formats could P&G have adopted for its balance sheet? Which format did it adopt?P&G could have adopted the account form for their balance sheet. The textbook, “Intermediate Accounting” states that the account form “lists assets, by sections, on the left side, and liabilities and stockholder’s equity, by sections, on the right side” (Kieso, Weygandt, and Warfield). It goes on to say that often times, there isn’t enough room on the page to achieve this. P&G’s balance sheet seems to utilize the report format. The assets section is listed above the liabilities and owners equity section; however, they are separated into two different pages. | | | | | (b) | In what classifications are P&G's investments reported? What valuation basis does P&G use to report its investments? How much working capital did P&G have on June 30, 2009? On June 30, 2008?P&G’s investments are classified in a few different ways depending on different transactions and the time frame of their intent. The unrealized gains or losses may be classified as trading or be recorded in shareholders’ equity. This all depends on the “intent and ability to retain the security until [they] recover the full cost basis and the extent of...
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...FINM7407: Financial Institutions and Markets Seminar 02 Monetary Policy and Interest Rates Learning Objective: 2 Necmi K Avkiran, PhD Associate Professor in Banking and Finance UQ Business School n.avkiran@business.uq.edu.au http://www.users.on.net/~necmi/financesite/profile.htm Overview of the seminar Monetary policy RBA market operations Balance sheet of the RBA Determination of interest rates and factors that affect rates The yield curve Transmission mechanism Inflation and the Fisher Effect LIBOR and a bank’s funding curve BBSW Banks’ exposure to interest rate risk Case study: Crisis in Cyprus FINM7407 Seminar 02 2 Monetary Policy Monetary policy is an important tool used by governments to influence economic activity. Since 1984, it has taken a particularly simple form— the Reserve Bank of Australia (RBA) sets the overnight rate in the interbank market on unsecured loans, a.k.a. the ‘cash rate’. Currently, the cash rate on 15 July was 2.50%, with an inflation rate of 3% (see RBA’s web page to find more up-todate figures!). FINM7407 Seminar 02 3 Monetary Policy – continued Overview of Reserve Bank Objectives (i.e. ultimate targets) An ‘ultimate target’ of monetary policy is a variable the authorities seek to influence because of its welfare impact. Lower inflation has been the principal ultimate target for some time. Inflation target Stability of the Australian currency Maintenance of full employment...
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...information and many other issues that help to gain a proper knowledge about the financing in organization. Different books and journals have been used to prepare the assignment. Contents Introduction 3 Requirement 1 3 Task 1.1 : Business needs finance and available sources of finance to a business 3 Equity financing 4 Debt Financing 4 Lease Financing 4 Task 1.2 : Accessing and comparing the implication of the different sources of finance 4 Implication of equity financing 4 Implication of debt financing 4 Implication of lease financing 5 Task 1.3: evaluation of the appropriate sources of finance for the above mention businesses. 5 M1: Critically evaluate each available sources of finance to that particular firm. Evaluation should include the pros and cons, and legal aspects of each source. (Merit M1). 5 Case study 1: An engineering firm 5 Equity financing for this firm 5 Debt financing 5 Lease financing 5 Case study 2: Individual financing 5 Equity financing for this firm 5 Debt financing 6 Lease financing 6 Case study 3: Large plc. 6 Equity financing for this firm 6 Debt financing 6 Lease financing 6 Case study 4: Local Do It yourself firm 6 Equity financing for this firm 6 Debt financing for this firm 6 Lease financing 6 Case study 5: Rugby club 6 Equity...
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...1. Macroeconomics is a study about / seeks to understand A. economic growth, business cycles, and inflation. B. industry sales, marketing strategies and corporate growth. C. product demand, product cost, and profit maximization. D. public choices, private choices, and consumer maximization. Makroekonomi merupakan kajian tentang A. pertumbuhan ekonomi, kitaran niaga dan inflasi B. jualan dalam industry, strategi pemasaran dan pertumbuhan korporat C. permintaan barangan, kos keluaran dan pemaksimuman keuntungan D. pilihan pengguna, pilihan individu dan pemaksimuman pengguna 2. Which of the following headlines would be more closely related to what macroeconomics study than what microeconomics study? A. Paddy prices rise due to flood in Kedah. B. The Proton Auto Workers sign a contract raising wages and benefits 7% over the next 3 years. C. Real GDP grows by 2.3% in the second quarter. D. Airlines raise ticket prices in response to rising fuel costs. Mana satukah dari tajuk di bawah yang paling hampir menerangkan kajian makroekonomi berbanding kajian mikroekonomi A. Harga padi yang meningkat disebabkan oleh banjir di Kedah. B. Pekerja di kilang proton telah menandatangani perjanjian bagi meningkatkan upah dan faedah lain sebanyak 7% untuk tempoh 3 tahun akan datang. C. KDNK benar meningkat sebanyak 2.3% dalam suku tahun kedua D. Tiket penerbangan meningkat disebabkan...
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...Bus 171a chap 1-8 HW Chapter 1 Hw probs 2,3,8,9,15-18 2) what is the difference between the claim of a debtholder of GM and an Equity holder of GM? The claim of the debt holder is established by contract, which specifies the amount and timing of periodic payments in the form of interest as well as term to maturity of the principal. The debt holder stands as a creditor and in case of default, he has a prior claim on firm assets over the equity-holder. The equity holder has a residual claim to assets and income. He can receive funds only after other claimants are satisfied. Income is in terms of dividends, the amount and timing of which are not certain. 3) What is the basic principle in determining the price of a financial asset? The basic principle is that the price of any financial asset is equal to the present value of its expected cash flow, even if the cash flow is not knows with certainty. The price of any financial asset is the present value of the expected cash flows or a stream of payments over time. Thus, the basic variables in determining the price are: expected cash flows, discount rate and the timing of these cash flows. 8) explain the difference between each of the follow a. The money market is a financial market of short-term instruments having a maturity of one year or less. The capital markets contain debt and equity instruments with more than one year to maturity; b. The primary market deals with newly issued financial...
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...Journal of Management Information Systems, Vol. 22, No. 4, Spring 2006: 109-142. An Information Systems Security Risk Assessment Model under Dempster-Shafer Theory of Belief Functions Lili Sun Rutgers, The State University of New Jersey Rajendra P. Srivastava The University of Kansas and Theodore J. Mock University of Southern California and University of Maastricht Acknowledgements: We would like to thank the audit firm for making their audit work papers available for the study. We sincerely appreciate the help provided by the audit manager and for suggestions provided by Mike Ettredge, Greg Freix, Prakash Shenoy, and participants in AIS workshops at the University of Kansas and the 6th Annual INFORMS Conference on Information Systems and Technology. In addition, the authors would like to thank Drs. Jay F. Nunamaker, Jr., and Robert Briggs, Editor, Special Issue of JMIS, and the three anonymous reviewers for their constructive comments and valuable suggestions for revising the paper. 1 An Information Systems Security Risk Assessment Model under Dempster-Shafer Theory of Belief Functions ABSTRACT: This study develops an alternative methodology for the risk analysis of information systems security (ISS), an evidential reasoning approach under the Dempster-Shafer theory of belief functions. The approach has the following important dimensions. First, the evidential reasoning approach provides a rigorous, structured manner to incorporate relevant ISS risk...
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...Chap1 Glossary (See related pages) | | | Central bank | The financial institution that manages the government's finances, controls the availability of money and credit in the economy, and serves as the bank to commercial banks. | | | | European Central Bank (ECB) | The central authority, located in Frankfurt, Germany, which oversees monetary policy in the common currency area. | | | | Federal Reserve System | The central bank responsible for monetary policy in the United States. | | | | Financial institutions | Firms, such as banks and insurance companies, that provide access to the financial markets, both to savers who wish to purchase financial instruments directly and to borrowers who want to issue them; also known as financial intermediaries. | | | | Financial instrument | The written legal obligation of one party to transfer something of value (usually money) to another party at some future date, under certain conditions. | | | | Financial market | The part of the financial system that allows people to buy and sell financial instruments quickly and cheaply. | | | | Financial system | The system that allows people to engage in economic transactions. It is composed of five parts: money, financial instruments, financial markets, financial institutions, and central banks. | | | | Information | A collection of facts. The basis for the third core principle of money and...
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...INTRODUCTION The Estimates committee (1980-81) in 7th Lok Sabha, Ministry of Finance had recommended that government should attempt an estimate of black economy to formulate appropriate policies. The study of unaccounted income thereafter was entrusted to the National Institute Of Public Finance And Policy in July 1982 to: identify sectors generating black money, causes of such, studying the methods employed to generate black money and channels through which concealed income is invested and spent in other ways, methods employed to convert black money into white, broad estimate of money generated and to take regional or sectoral surveys required in connection with the above. The Institute submitted its report in March 1985. The focus of the paper is on methods and measurements of estimating black economy and therefore, other aspects of the report like distinguishing between black income and black wealth, giving an explanation for the causes of black economy and remedial measures etc. are not explicitly dealt with, yet these issues are kept in mind and the methods and measurements are discussed at the level best. This paper has tried to do some justification to the NIPFP REPORT (1985) and the comments by various known scholars. METHODS FOR ESTIMATING BLACK INCOME The first approach is the fiscal approach: Variants of this approach attempt to arrive at independent estimates of incomes subject to tax and compare these with the income actually assessed for taxation and call the...
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...Part Three Answers to End-of-Chapter Problems Chapter 1 ANSWERS TO QUESTIONS 1. THE INTEREST RATE ON THREE-MONTH TREASURY BILLS FLUCTUATES MORE THAN THE OTHER INTEREST RATES AND IS LOWER ON AVERAGE. THE INTEREST RATE ON BAA CORPORATE BONDS IS HIGHER ON AVERAGE THAN THE OTHER INTEREST RATES. 2. The lower price for a firm’s shares means that it can raise a smaller amount of funds, so investment in facilities and equipment will fall. 3. Higher stock prices mean that consumers’ wealth is higher, and they will be more likely to increase their spending. 4. They channel funds from people who do not have a productive use for them to people who do, thereby resulting in higher economic efficiency. 5. The United States economy was hit by the worst financial crisis since the Great Depression. Defaults in subprime residential mortgages led to major losses in financial institutions, producing not only numerous bank failures, but also the demise of two of the largest investment banks in the United States. These factors led to the “Great Recession” which began late in 2007. 6. The basic activity of banks is to accept deposits and make loans. 7. Savings and loan associations, mutual savings banks, credit unions, insurance companies, mutual funds, pension funds, and finance companies. 8. Answers will vary. 9. In the period from 2007 to 2011, both inflation and interest rates have generally trended downward compared to before...
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...INTRODUCTION TO MACROECONOMICS E202 $ ¥ Dr. David A. Dilts Department of Economics Doermer School of Business and Management Sciences Indiana-Purdue University-Fort Wayne June 1, 1993 Revisions: May 1994, December 1995, July 1996, November, 2000, May 2003, May 2006 PREFACE This Course Guide was developed in part because of the high cost of college textbooks, and in part, to help organize students’ studying by providing lecture notes together with the reading assignments. This Guide is provided to the student online at the Department of Economics website. Jayla Heller, the Department’s secretary has been kind enough to go through all of the frustration and hard work to put the guide in the appropriate format and put it online. To her goes my gratitude. The department, neither school, nor the professor make anything whatsoever from this Guide. In fact, the department’s budget and the professor’s own resources are used in the writing of the Guide, and the numerous draft copies that are produced in the revisions of this document. Like the sign in the Mom and Pop bait shop on Big Barbee Lake says, “This is a non-profit organization, wasn’t planned to be – it just worked out that way.” Well, actually it was planned to be a non-profit enterprise in this case. The professor also wishes to acknowledge the fact that several students have proposed changes, improvements, caught errors, and helped to make this document more useful as a learning tool. Naturally, any errors of omission...
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...ft Beta Estimation Practice And Its Reliability Biasness Towards Aggressive Stocks: An Empirical Evidence From NSE * Dr. Neeraj Sanghi ** Dr. Gaurav Bansal INTRODUCTION While investing in a capital market, investors always have concern about the market movements or changes in the value of capital market index. This tendency of investors' behavior is related to a psychological factor that reveals that market movements and prices of stocks are closely related to each other. Upward / downward movement in market index gives trigger to the expectation of investors that the value of their holding would move accordingly. This is, more formally, known as systematic risk arising on account of economic wide uncertainties and explains the tendency of stock's price movement together with changes in market index. Systematic risk, also known as market risk, cannot be reduced through diversification of stocks' portfolio. Investors arc exposed to market risk even when they hold well diversified portfolio of securities. In finance literature, beta coefficient is a measurement statistic of systematic risk; it refers to the slope in a linear relationship fitted to data on the rate of return on a stoek and Ihc rate of return of the market (or market index). This usage stems from Sharpe's 1963 paper in Management Science. Beta is the stock's sensitivity to the market index: it is the degree (in percentage) by which the stock's relum lends to increase or decrease for every 1% increase or decrease...
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...Shock Waves (2009) 19:453–468 DOI 10.1007/s00193-009-0220-z ORIGINAL ARTICLE Some physical aspects of shock wave/boundary layer interactions Jean Délery · Jean-Paul Dussauge Received: 9 February 2009 / Accepted: 29 June 2009 / Published online: 26 July 2009 © Springer-Verlag 2009 Abstract When the flow past a vehicle flying at high velocity becomes supersonic, shock waves form, caused either by a change in the slope of a surface, a downstream obstacle or a back pressure constraining the flow to become subsonic. In modern aerodynamics, one can cite a large number of circumstances where shock waves are present. The encounter of a shock wave with a boundary layer results in complex phenomena because of the rapid retardation of the boundary layer flow and the propagation of the shock in a multilayered structure. The consequence of shock wave/ boundary layer interaction (SWBLI) are multiple and often critical for the vehicle or machine performance. The shock submits the boundary layer to an adverse pressure gradient which may strongly distort its velocity profile. At the same time, in turbulent flows, turbulence production is enhanced which amplifies the viscous dissipation leading to aggravated performance losses. In addition, shock-induced separation most often results in large unsteadiness which can damage the vehicle structure or, at least, severely limit its performance. The article first presents basic and well-established results on the physics of SWBLI corresponding to...
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...PART THREE Answers to End-of-Chapter Problems Copyright © 2013 Pearson Addison-Wesley. All rights reserved. Chapter 1 ANSWERS TO QUESTIONS 1. The interest rate on three-month Treasury bills fluctuates more than the other interest rates and is lower on average. The interest rate on Baa corporate bonds is higher on average than the other interest rates. 2. The lower price for a firm’s shares means that it can raise a smaller amount of funds, so investment in facilities and equipment will fall. 3. Higher stock prices mean that consumers’ wealth is higher, and they will be more likely to increase their spending. 4. They channel funds from people who do not have a productive use for them to people who do, thereby resulting in higher economic efficiency. 5. The United States economy was hit by the worst financial crisis since the Great Depression. Defaults in subprime residential mortgages led to major losses in financial institutions, producing not only numerous bank failures, but also the demise of two of the largest investment banks in the United States. These factors led to the “Great Recession” which began late in 2007. 6. The basic activity of banks is to accept deposits and make loans. 7. Savings and loan associations, mutual savings banks, credit unions, insurance companies, mutual funds, pension funds, and finance companies. 8. Answers will vary. 9. In the period from 2007 to 2011, both inflation and interest rates have generally trended downward compared to before that...
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