Topic 1: Financial Markets 1. You are among the OTC market makers in the stock of Bio-Engineering, Inc. and quote a bid of 102 1/4 and an ask of 102 1/2. Suppose that you have a zero inventory. (a) On Day 1 you receive market buy orders for 10,000 shares and market sell orders for 4,000 shares. How much do you earn on the 4,000 shares that you bought and sold? What is the value of your inventory at the end of the day? (Hints: It is possible to have negative inventory. Further, there is more
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from the bond market to finance the expansion of Avida Land and Alveo Land, ALI’s subsidiaries, the bond will be issued by the two subsidiaries P 2 Billion each. The news was then immediately confirmed by ALI but added that the said bond issuance was still subject to approval of SEC. August 23, 2013 – The further decline in the stock price of the company was due to the disclosure of ALI to the PSE that the company approved additional capitalization of P 1.1 Billion, most likely from bond market,
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FNC1 Objective Assessment Based on Pre-Assessment 1. On which financial statement is the revenue account for the firm reported? A. Balance Sheet B. Statement of owner’s equity C. Income statement D. Statement of cash flows 2. The adjustments for the month caused the revenue account to increase by $3,000 and the salaries expense account to increase by $5,000. How will these entries cause the $4,000 net loss shown on the trial balance to be reported on the income statement
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months. The long-term and short-term debt markets can be divided further into either domestic or offshore debt markets. Within domestic debt market, short-term securities debt is mainly money market securities and long-term securities debt is mainly bonds (Hunt, 2011, p. 43). Additionally, offshore debts, which can be either in foreign currency or in Australian dollar, are foreign liabilities raised overseas. Two others components of banks’ funding are equity and
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. What is a “Current Liabilities”? What is a liability? Probable future sacrifices of economic benefits arising from present obligations of an entity to transfer assets or to provide services to other entities in the future as a result of past transactions or events. FASB Statement of Financial Accounting Concepts No. 6, “Elements of Financial Statements” Current liabilities are: Obligations whose liquidation is reasonably
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a. Why is corporate finance important to all managers? Corporate finance provides the skills managers need to: (1) identify and select the corporate strategies and individual projects that add value to their firm; and (2) forecast the funding requirements of their company and devise strategies for acquiring those funds. b. Describe the organizational forms a company might have as it evolves from a start-up to a major corporation. List the advantages and disadvantages of each form. The three
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Chapter 10 19. Amortization schedule for bonds Period | 6 | Interest Rate | 5% / semiannual | Face Value | $100,000 | Coupon Rate | 4% / semiannual | Payment | $4,000 | a) Initial Issue Price = PV(0.05, 6, 4000, 100,000, 0) = $94,924.31 b) Bond payable amortization schedule Period(1) | Balance atBeginningOf Period(2) | InterestExpensefor Period(3) | CashPayment(4) | Increase inliability(5) | Balanceat Endof Period(6) | 1 | $94,924.31 | $4,746.22 | $4,000.00 | $746
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security. Some securities are interest based and some are dividend based securities. Some of the securities are common stock, preferred stock, bonds, notes, debenture, option, future, swap, right, warrant or any other financial assets. • Stock- Stock represents the ownership in the business and a claim on part of the company’s assets and earnings. • Bond- It is a debt instrument, which describes the amount of money loaned, the rate of interest, the maturity date and method of payment of interest
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Review Session 4 Problems: 1) Stock M and Stock N have had returns for the past three years of –12%. 10%, 32% and 6%, 15%, 24% respectively. Calculate the covariance between the two securities. 2) Stock P and stock Q have had annual returns of -10%, 12%, 28% and 8%, 13%, 24% respectively. Calculate the covariance of return between the securities. 3) Stock X has a standard deviation of return of 10%. Stock Y has a standard deviation of return of 20%. The correlation coefficient
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GM4202 Financial Management Professor Lena Booth (Individual Homework Assignment) This assignment will be graded. It must be turned in at the beginning of the class on the due date specified on the course page. Answer all the 10 questions by showing your workings in the space provided. Please write legibly, or if you choose, type your answers. Your Name: __________________________ ID Number: __________________________
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