Topic 1 a) Explain the financial goal of a firm. Illustrate your answer with example/s b) Outline the reasons why companies are the most attractive organisational form for raising capital. c) What is the function financial markets perform? d) Distinguish between the money market and the capital market e) What is a private placement? Topic 2 a) Explain the meaning of Time Value of Money and how it is used in finance. b) “In order to compare two or more interest
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INTRODUCTION 1.1 Background To The Study The financial system is created to move funds from surplus economic units to deficit economic units in order to produce goods and services and to make investment in new equipment and facilities so as to facilitate the growth of the economy and improve the standard of living of its citizens. It is generally recognized that financial system plays a catalytic role in the process of economic development. The financial system of any nation is a function of the size
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Stocks and the Stock Market Book Values, Liquidation Values and Market Values Valuing Common Stocks Simplifying the Dividend Discount Model Growth Stocks and Income Stocks Market Efficiency (i.e., no free lunches on Wall Street) Market Anomalies and Behavioral Finance McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved Terminology of Stocks Public Common Stock - Ownership shares in a publicly held corporation. Primary Market - Place where the sale
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1 Valuing Financial Service Firms Aswath Damodaran April 2009 Valuing banks, insurance companies and investment banks has always been difficult, but the market crisis of 2008 has elevated the concern to the top of the list of valuation issues. The problems with valuing financial service firm stem from two key characteristics. The first is that the cash flows to a financial service firm cannot be easily estimated, since items like capital expenditures, working capital and debt are not clearly
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Analyze the Effects of Financial Globalization on China's Financial System Introduction With the development of financial globalization, the free flow of international capital contributes a lot to the development of the world economy, however, many short-term speculative capital wandering around the world with rapid speed and complex means have impacted on developing countries’ financial markets, which constantly induce financial instability and crisis. And fluctuations due to capital flows
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Abstract Lehman collapse was the largest bank bankruptcy in the United States history. Complex causes combination lead to this tragedy. This paper is going to illustrate primary causes that result in its failure, and also discuss impacts on financial systems supervision and regulations. TABLE OF CONTENTS 1. INTRODUCTION 1 2. LITERATURE REVIEW 4 3. RESEARCH METHODOLOGY 1 3.1 Data collection 2 3.2 Methodology
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simultaneously in a mean-variance analysis as well as a market portfolio approach. We also demonstrate how to combine these two methods. Our results suggest that real estate, commodities and high yield add most value to the traditional asset mix. A study with such a broad coverage of asset classes has not been conducted before, not in the context of determining capital market expectations and performing a mean-variance analysis, neither in assessing the global market portfolio. JEL classification: G11, G12 Key
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20130207.04 Role of Pension Funds in Financial Intermediation Ondabu Ibrahim Tirimba Finance and Economics Department, PhD Candidate Jomo Kenyatta University of Agriculture and Technology, Nairobi, Kenya Abstract This paper aimed at discussing the various roles that pensions play in financial intermediat ion. Descriptive research design was adopted with the population being all the available literature on the online web as pertaining pension funds and also financial intermed iation. Using key word characters
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actual outcome will be closer to the expected return. Measuring Standalone Risk: Standard Deviation 1. Expected Rate of return 2. Deviationi= ri-r 3. Variance=σ2=i=1n( ri-r)2Pi 4. Standard Deviation=σ=Variance 5. Or use Excel of Financial calculator Using Historical Data to Measure Risk: Realized Rates of Return: rAvg=t=1nrtn Standard Deviation of the Sample Returns: σ=S=t=1n(rt-rAvg)n-1 In Excel use =Average and =STDEV functions Measuring Standalone Risk: Coefficient of Variation
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a treasure chest of $10 billion in cash. (a) Is this a real or financial asset? (b) Is society any richer for the discovery? (c) Are you wealthier? (d) Can you reconcile your answers to (b) and (c)? Is anyone worse off as a result of the discovery? Question 2. Consider Fig. 1.5 in BKM6. (a) Are these American gold certificates primitive or derivative securities? (b) Is the issue being described a primary or secondary market transaction? Question 3. Suppose that you are an executive of
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