...|||| |Sheet 33 – Consumer Purchase ComparisonPurpose: To research and evaluate brands and store services for purchase of a major consumer item.Instructions: When considering the purchase of a major consumer item, use ads, catalogs, the World Wide Web, store visits and other sources to obtain the information below.||| |||| Product Exact description (size, model, features, etc.) Research the item in consumer periodicals with information regarding your product article/periodical|||article/periodical|| date/pages|||date/pages|| What buying suggestions are presented in the articles? Which brands are recommended in these articles? Why? Contact or visit two or three stores that sell the product to obtain the following information: |Store 1|Store 2|Store 3| Store name|||| Address|||| Phone/Web site|||| Brand name/cost|||| Product difference from item above|||| Guarantee/warranty offered (describe)|||| Which brand and at which store would you buy this product? Why? |||| |Sheet 39 – Auto Ownership and Operation CostsPurpose: To calculate or estimate the cost of owning and operating an automobile or other vehicle.Instructions: Maintain records related to the cost of categories listed below||| |||| Model year|2008|Make, size, model|Kia, Spectra| Fixed ownership costs||| Depreciation*||| Purchase price $ __13000___ divided by estimated life of __22___ years|$|590.00| Interest on auto loan||| Annual cost of financing vehicle if buying on credit|$|11...
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...extremely thin after covering all of my monthly expenses. It would make sense to first understand what my opinions are. I have to first think about the financial position I am already in. After paying all of my bills for the month, I don’t even have $100 left over to live off of for the rest of the month. This alone, causes me to think that increasing my payment amount doesn’t make sense in my current situation, but may be something I want to revisit in a few years when I have more income to spare. I can look into refinancing to see if I can possibly get a lower interest rate, but that would cost me $2000 I don’t have at the moment. At the same time, it wouldn’t hurt to figure out what interest rate would benefit me by lowering my payment and, if it’s worth it, I could come up with the closing costs. I’ve decided I will weigh my options. I will calculate how much more I will need to increase my current payment by in order to pay off this loan in 20 years without refinancing. Alternatively, my credit is in good shape so I should also be able to refinance at a lower interest rate. I will use calculations to figure out what rate will be beneficial to me by lowering my payment, taking into consideration the $2000 closing costs. The loan amount is $112,247.47 with a 20 year fixed interest rate of 5.75%. The monthly finance cost to finance $1000 at this rate is 7.0208. The formula to use here is loan amount/1000 * table figure (Smith, 2011). To figure the new payment, I divide...
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...Refinancing This is a summary of the consideration of refinancing a current mortgage at 7% with 14 of 15 years left and $2,000 in closing cost. The new mortgage would be 5.5% for 15 years and $1,500 in closing costs. If your refinanced mortgage was $100,000.00 at 7% your monthly payment would be $898.83/per month ( http://www.calculator.com/pantaserv/mortgage_s.calc). Now you would take that $898.83 figure and multiply 168 months (14 yrs.) then add in the $2,000.00 closing costs and you’d have paid $153,003.13(from here on in and $163,789.09 total)for the house when paid off. Now if you go to the 5.5% offer to refinance, the monthly mortgage would be $817.08/per month. Take that figure and multiply it by 180 months (15 yrs.) and add in the $1,500.00 closing costs and you would have paid $148,574.40 for the house when paid off. If you factor in what you have already paid for your current mortgage ($10,785.96 for the first 12 months of payments) the grand total would be $159,360.36 The 5.5% mortgage is better any way you look at it. It has a better interest rate, lower monthly payment, and if you add what you have already paid in your current mortgage with the total for the new 15 year mortgage you will still spend less money in the long run with the new 5.5% mortgage. References Calculator.com. (n.d.). Retrieved on November 6, 2011from:...
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...to consolidate, intensify and stay hostile. Before acquiring and executing joint ventures in the current complex global environment, important risks should be considered. Those risks include foreign exchange risk, market risk, governmental and cultural threats while entering emerging markets, credit-risk exposure when financing its acquisitions with debt, and challenges to constantly produce the right efficiencies to maximize shareholders wealth. CEMEX next move was to continue with its acquisitions program by financing transactions through heavy debt issuing and entrusting (in my personal view, relying to much on it) its “CEMEX way” program in order to reduce costs and increase margins. CEMEX intended to repay its debt with flows that were supposed to produce a higher return than the hurdle rate of every investment. But, in the following years, the devaluation of the MXN to the USD, CEMEX’s hedging operations, and the increase of financial leverage for the 2007 acquisition of Rinker, an Australian cement maker, for USD$17,298 mm, increased its leverage issues. This increase combined with the credit crisis of 2008 resulted in a lack of solvency and a high level of indebtedness for CEMEX. The best way for CEMEX to translate its past success in an increasingly complex business environment is to modify its capital structure by refinancing debt, consolidating operations by reducing costs, expenses, and selling useless assets to increase efficiencies. CEMEX must also focus on its...
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...Market in which buyers and sellers negotiate and transact business directly, without any intermediary such as resellers. * Secondary market - Financial market where previously issued securities (such bonds, notes, shares) and financial instruments (such as bills of exchange and certificates of deposit) are bought and sold. All commodity and stock exchanges, and over-the-counter markets, serve as secondary markets which (by providing an avenue for resale) help in reducing the risk of investment and in maintaining liquidity in the financial system. * Risk - Finance: The probability that an actual return on an investment will be lower than the expected return. Financial risk is divided into the following categories: Basic risk, Capital risk, Country risk, Default risk, Delivery risk, Economic risk, Exchange rate risk, Interest rate risk, Liquidity risk, Operations risk, Payment system risk, Political risk, Refinancing risk, Reinvestment risk, Settlement risk, Sovereign risk, and Underwriting risk. * Security - Finance: A financing or investment instrument issued by a company or government agency that denotes an ownership interest and provides evidence of a debt, a right to share in the earnings of the issuer, or a right in the distribution of a property. Securities include bonds, debentures, notes, options, shares, and warrants but not insurance policies, and may be traded in financial markets such as stock exchanges....
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...the causes of the crisis in the big picture are attributable to the fundamental properties of capitalist system, today it is beyond any doubt that the structured financial instruments and the prevalent risks they revealed were at the center of the turmoil. In this paper, we look at the development of financial innovation and the advent of the structured products. The major risks they possess, how they have led to the financial crisis. Keywords: structured credit products, global financial crisis, CDO, CDS, structured finance 2 TABLE OF CONTENTS Structured products …………………..…………………………………………………..……4 Risks involved with structured products ………………………………………………………7 Role of structured products in the global financial crisis …………………………………….10 Measures taken and post-crisis situation .……………………..……………………………...12 References ……………………………………………………………………………………14 3 1 Structured Products Structured products have changed the way the banks manage and mitigate the risk in their portfolios. By the help of structured products, banks sell a pool of loans they originated to a special purpose vehicle. The SPV will pay for the assets by issuing a set of tranches of liabilities with different seniorities. Investors buying part of a tranche assume some of the credit risk of the underlying pool of collateral to the extent that losses on the loans may exceed the par value of more...
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...Advanced Corporate Finance [FN2] Examination Blueprint 2013/2014 Purpose The Advanced Corporate Finance [FN2] examination has been constructed using an examination blueprint. The blueprint, also referred to as the test specifications, outlines the content areas covered on the examination and the weighting allotted to each content area. This document also lists the topics, the level of competence for each topic, and the related learning objectives and competencies. The learning objectives have been designed to ensure that the competencies are met. In addition, information is provided on the proportion of each question type presented in the examination (that is, multiple choice, quantitative problems, and so on). Use Candidates should use the examination blueprint to prepare for the course examination. The blueprint may not include all the topics listed in the course materials; however, candidates are still responsible for acquiring a broad-based knowledge of all topics not listed in the blueprint since these topics will be tested in assignment and review questions. The topics not listed in the blueprint will also provide candidates with a greater depth of understanding of finance concepts. Examination Objectives The objective of the 4-hour comprehensive examination is to test CGA candidates on the prerequisite knowledge required for advancement into PA1 and PA2, so as to ensure that the candidates have the broad-based knowledge in finance needed to function properly in the association’s...
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...OBJECTIVE OF PROJECT Developing the property risk scoring matrix for investors investing in investment grade commercial yield assets. INTRODUCTION At the point when a speculator is putting resources into any benefit, the sole choice is focused around the valuation report. However in valuation report the primary attention is given on deciding the estimation of an advantage. As the Valuer deals with all the danger included in the advantage for deciding the estimation of property yet the these danger are not legitimately imparted to customer for instance the amount of danger is included in useful obsolesce of the benefit. So our gathering is enthused about determining the danger scoring framework for customer that can all the more unequivocally...
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...EBMA Level 8 Diploma in strategic Business Research and Leadership Direction Unit Title: Strategic Financial Analysis and Planning Table of Contents Executive Summary 3 1.Critique and evaluate research ....... 4 2.Critically apply modern financial tools 6 3.Use main types of investment appraisal tools 8 4.Critically evaluate the importance of research 10 References 11 Executive Summary The decision making of management is very crucial and involves various analysis to be performed. There are various ratios and methods that can be useful for mitigating the risks and increasing the expected returns with investments. The financial forecast is a mix of the behaviour, perception of management alongwith various techniques used for analysis of the different options available. Critique and evaluate research in financial theory and apply that research for decision making process 1.1 Describe the economic theory of choice as an illustration under certainty. The rational behind the economic theory of choice is to choose out of certain economic outcomes and representing the preferences through maximisation of the utility function of the outcomes. As per the von Neumann-Morgenstern expected utility model (1953), which is the workhorse of recent economics, the choices are made by people, so as to get the maximum utility. These preferences are based on intuition, self interest, past experiences etc...
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...1 LIQUIDITY RISK MANAGEMENT: A COMPARATIVE STUDY BETWEEN CONVENTIONAL AND ISLAMIC BANKS OF BANGLADESH Banks conventionally fulfill the supreme responsibility of being a financial intermediary between the deficit and surplus unit of the economy. Liquidity risk refers to the excessive transaction cost, excessive loss of value and excessive exertion of time that banks have to face at the time of allocating liquidity to the third party when stipulated. Because of the unique constitutional features and regulatory conformity with the Shariah principle Islamic banks have to exert much more to manage liquidity. The core objective of this very research is to assess the extent of liquidity risk associated with financial institutions especially banks and to evaluate the concurrent liquidity risk management (LRM) along with a comparative analysis between conventional and Islamic banks of Bangladesh. The researcher has tried to investigate the significance of firm's size, net working capital, return on equity, capital adequacy and return on assets on liquidity Risk Management in case of Conventional and Islamic banks of Bangladesh. Secondary data had been the major stimulus of the research covering five year 20062010. For Islamic banks, a model estimation to predict the liquidity risk level was proven to be successful but the module failed to generate the desired result in case of the conventional banks. Moreover, net working capital in case of Conventional banks...
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...Project Financing Asset-Based Financial Engineering Second Edition JOHN D. FINNERTY, Ph.D. John Wiley & Sons, Inc. Project Financing Founded in 1807, John Wiley & Sons is the oldest independent publishing company in the United States. With offices in North America, Europe, Australia, and Asia, Wiley is globally committed to developing and marketing print and electronic products and services for our customers’ professional and personal knowledge and understanding. The Wiley Finance series contains books written specifically for finance and investment professionals as well as sophisticated individual investors and their financial advisors. Book topics range from portfolio management to e-commerce, risk management, financial engineering, valuation, and financial instrument analysis, as well as much more. For a list of available titles, visit our Web site at www.WileyFinance.com. Project Financing Asset-Based Financial Engineering Second Edition JOHN D. FINNERTY, Ph.D. John Wiley & Sons, Inc. Copyright C 2007 by John D. Finnerty. All rights reserved Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada. Wiley Bicentennial Logo: Richard J. Pacifico No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States...
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...Swaps, etc.). At the same time it tries to find if these financial derivatives exists in the Arab world, how they are implemented, and if we have an Islamic alternatives for them. Introduction There is a big debate in the Arab world regarding the usage of financial derivatives, Wither they are legal according to Islam or not, and If they are illegal in Islam; are there any Islamic alternatives to them. First we have to ask our self: Is there any need to use derivatives? And why they recently became so popular in the western countries? The need for financial derivatives emerges when people realize that there must be a way to reduce the risk associated with the trading of different kinds of goods. Risks such as price fluctuations and the uncertainty about the future market conditions. And since there are some people who are willing to bear this risk instead of us, this market took off and recently because of the communications revolution it flourished. Then why these financial derivatives did not reach the Arab world? The answer is simply because they hugely rely on speculations and anticipation; which are considered illegal according to Islam. But someone can ask: if it is illegal in Islam, then how come we couldn't Islamize them as we managed to Islamize the banking industry, which is a western invention as the financial derivatives. Through this study we will talk about financial derivatives and try to find if there are any Islamic alternatives. Defining Derivatives A derivative...
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...Slovakia country risk analysis Seminar Paper Submitted at Lauder Business School, Vienna in Corporate Risk Management by David GRÜNFELD KRÁLIK Eva PÓSA Valentine TARELKO * Submitted on: 26.04.2014 Table of contents 1. Introduction 5 2. Political Risk 6 2.1. Government stability 6 2.2. Corruption 7 2.3. Socioeconomic conditions 8 2.4. Internal and External Conflict 10 2.5. Investment Profile 11 2.6. Military in politics 14 2.7. Religious tensions 15 2.8. Law and Order 15 2.9. Democratic Accountability 15 2.10. Bureaucracy quality 16 3. Current Economic Situation in Slovakia 17 3.1. Slovakian Economic Outlook 18 3.2. Outlook Economic Risk Evaluation for the Slovak Republic, Eurozone and the EU 19 3.3. Components of the Economic Risk Analysis 20 3.3.1. GDP Growth Rate 20 3.3.2. Government Budget 21 3.3.3. Current Account to GDP 22 3.3.4. Inflation Rate 22 4. Financial Risk Assessment 24 4.1. Foreign Debt as a Percentage of GDP 24 4.2. Foreign Debt Service as a Percentage of Exports of Goods and Services 24 4.3. Current Account as a Percentage of Exports of Goods and Services 25 4.4. Foreign Debt as a Percentage of GDP 25 4.5. Exchange Rate Stability 26 5. Conclusion 27 6. List of references 28 7. Appendix 30 Methodology: Country risk is a composite concept that relates not only to political risk but also to financial and economic risk. Specifically, this paper aims to assess...
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...NBER WORKING PAPER SERIES THE EFFECTS OF QUANTITATIVE EASING ON INTEREST RATES: CHANNELS AND IMPLICATIONS FOR POLICY Arvind Krishnamurthy Annette Vissing-Jorgensen Working Paper 17555 http://www.nber.org/papers/w17555 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 October 2011 We thank Jack Bao, Olivier Blanchard, Greg Duffee, Charlie Evans, Ester Faia, Simon Gilchrist, Robin Greenwood, Monika Piazzesi, David Romer, Thomas Philippon, Tsutomu Watanabe, Justin Wolfers, and participants at seminars and conferences at Brookings, Chicago Fed, Board of Governors of the Federal Reserve, ECB, San Francisco Fed, Princeton University, Northwestern University, CEMFI, University of Pennsylvania (Wharton), Society for Economic Dynamics, NBER Summer Institute, the NAPA Conference on Financial Markets Research, and the European Finance Association for their suggestions. We thank Kevin Crotty and Juan Mendez for research assistance. This paper was prepared for the Brookings Papers on Economic Activity Fall 2011 issue. We have received an honorarium for the presentation of the paper at Brookings. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. At least one co-author has disclosed a financial relationship of potential relevance for this research. Further information is available online at http://www.nber.org/papers/w17555.ack NBER working papers...
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...Risk and risk management 1. Credit Risk – The risk of loss of principal or loss of a financial reward stemming from a borrower's failure to repay a loan or otherwise meet a contractual obligation. Credit risk arises whenever a borrower is expecting to use future cash flows to pay a current debt. Investors are compensated for assuming credit risk by way of interest payments from the borrower or issuer of a debt obligation. The higher the perceived credit risk, the higher the rate of interest that investors will demand for lending their capital. Credit risks are calculated based on the borrowers' overall ability to repay. This calculation includes the borrowers' collateral assets, revenue-generating ability and taxing authority (such as for government and municipal bonds). 1) Total loans to assets The loans to assets ratio measures the total loans outstanding as a percentage of total assets. The higher this ratio indicates a bank is loaned up and its liquidity is low. The higher the ratio, the more risky a bank may be to higher defaults. This figure is determined as follows: Loans to Assets = ( Loans / Total Assets ) 2) Nonperforming loans/total loans Nonperforming loans, or NPL, are loans that are no longer producing income for the bank that owns them. Loans become nonperforming when borrowers stop making payments and the loans enter default. The exact classification can vary from institution to institution, but a loan is usually considered to be nonperforming after...
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