Main details about the Currency Hedge Case: * John will buy 8,000 cases for € 1,030,000 * John will sell all 8,000 cases for $199 for each case ($ 1,592,000) * Spot Exchange Rate is $1.32/ € * The Forward rate for November is $1.37/ € * The Forward rate for December is $1.39/ € * Forward contracts can be bank forward rate of the month * Future contract can be multiple of $ 62,500, expiring 3rd Friday of each month. * November option can be multiple of $62,500 buying
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As the chairman of the Finance Committees of the House and Senate, he made a significant contribution to rescue the Subprime Crises effort in United States. I have some recommendations to him for this terrible events. In the first place, I think that the investment banks need to be combined with the commercial banks. There are several reasons why I suggest him. During the Subprime Crises from 2007 to 2009, the leverage of the investment banks were so high. The investment banks with the high leverage
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Chapter 6 Bonds and their Valuation OVERVIEW This chapter presents a discussion of the key characteristics of bonds, and then uses time value of money concepts to determine bond values. Bonds are one of the most important types of securities to investors, and are a major source of financing for corporations and governments. The value of any financial asset is the present value of the cash flows expected from that asset. Therefore, once the cash flows have been estimated, and
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Impairment of Securities Securties are classified into one of three categories: available for sale, held to maturity, or trading. The concept of impairment does not really apply to trading securities as they are only held for short periods. The impairment of securities that are deemed available for sale or held to maturity is a three step process. The first step is to determine if the security is impaired by comparing the fair value to the cost of the security. The cost includes any amortization
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1. Describe Linear Technologies payout Being very successful and having positive cash flows, Linear Technology announced its first dividend payment to its shareholders in October 1992. This is for giving the credibility to investors. Linear set dividend at $0.05 per share and this amounted to $8.3 million, or 15% of 1994 earnings. Linear continued their policy to increase dividend in 2002 when company's drop in sales and earnings so their payout ratio increased to 25%~30%. Considering the general
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disposal cost is greater of $1000 or ACB. Similarly, PoD are greater actual proceeds and $1000. - LPP: segregates collectibles (works of art, rare books, coins, jewelry and stamps). Losses claimed agst other LPP gains - Other capital property: stocks, bonds, real estate, partnership interest, machinery, etc 100% 50% Capital Gain Taxable Capital Gains Capital Loss Allowable Capital Losses Capital gains exemption Capital gains deduction PoD – value of consideration received or receivable ACB –
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MODULE 8 – CAPITAL GAINS/LOSSES – FUNDAMENTALS & INTEGRATION CAPITAL GAINS/LOSSES – FUNDAMENTALS Text Coverage – Chapters 7 & 8 You are NOT responsible for the following paragraphs: 7,240 – 7,260.20 7,306 7,370 7,380 7,500 7,600 7,720 8,000 – 8,300 Change in use of a principal residence Special relief for tax-deferred elections made prior to March 4, 2010 Capital gains deferral Certain shares deemed to be capital property Death of a taxpayer Leaving and entering Canada Allowable business investment
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Bond market is a financial market where bond market participants can issue new debt securities, known as the primary market, or buy and sell the bonds among investors, known as the secondary market. The Securities Industry and Financial Market Associations (SIFMA) classifies the bond market into following types : Types of bond markets * Government and Agency Government-sponsored enterprises (GSEs) issues the government and agency securities to fund their daily operations. These government
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Titman (2001) MM I Definition – Financing and risk management choices will not affect firm value if the following conditions hold: (1) Total cash flow to a firm’s financial claimants are unaffected by these choices; (2) Efficient markets Frictionless and complete markets are clearly sufficient for capital structure irrelevant. MM II Corporation need not be concerned about the market conditions and needs of investors when designing their financial structures Definition – the cost of capital
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Personal Risk Tolerance Questionnaire for Retirement Planning Please use this Risk Questionnaire to determine your personal risk tolerance. Based on your answers, you will be directed to one of the Model Portfolios on the back of this page. These model portfolios can serve as a starting point for developing your own allocation mix. Please answer each of the six questions and circle the number opposite the answer that best represents your opinion. Add up the circled numbers in the column on the right
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