...Chapter 2 1. ‘A highly developed and efficient financial system is essential to ongoing economic growth and prosperity.’ Discuss the component parts that form a financial system and the relevance of the above statement. Component parts of a financial system: -financial institutions—example: banks, insurance offices, superannuation funds -financial instruments—example: shares, term deposits, loans -financial markets—money and capital markets, stock market, foreign exchange market Discussion: -financial system supports economic transactions -encourages savings which provides funds for investment -provides a range of investment opportunities -provides a range of borrowing alternatives -efficient allocation of resources for economic growth -regulatory regimes provide strength and stability to a financial system 2. (a) Discuss the role of money in a financial system. -money is a financial asset that facilitates financial and economic transactions -a medium of exchange—swapped for goods and services -a store of value—wealth is held or measured in money terms -a standard of deferred payment—used to record indebtedness -a unit of account—transactions are priced in money terms -currency is generally divisible, portable and durable (b) Does money have to be currency? If not, what are some alternatives? -money is anything that is universally acceptable as a medium of exchange -further, money generally has the characteristics of being divisible and...
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...Tutorial lecture 1 --------------------------------------------------------------------------------------------------------- FIN 111-Tutorial Questions (Spring 2012) Lecture 1- Introduction to Financial Management Q 1. 1- The Financial Management Decision Process What are the three types of financial management decisions? For each type of decisions, give an example of a business transaction that would be relevant. Q 1. 2- Sole Proprietorship and Partnership What are the four primary disadvantages to the sole proprietorship and partnership forms of business organization? What are the benefits are there to these types of business organization as opposed to the corporate form? Q 1. 5 - Goal of Financial Management What goal should always motivate the actions of the firm's financial manager? Q 1. 6- Agency Problems Who owns a corporation? Describe the process whereby the owners control the firm's management. What is the main reason that an agency relationship exists in the corporate form of organization? In this context, what kinds of problems can arise? Q 1.9- Not For Profit Firm Goals Suppose you were a manager of a not for profit business (a non-profit hospital), What kinds of goals do you think would be appropriate for this firm? Q1. 14- Executive Compensation Critics have charged that compensation to the top management in Australia is simply too high and should be cut back. For example, focusing on large corporations, Ralph Norris of...
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...Financial Institutions, Instruments and Markets—7th edition Instructor’s Resource Manual Christopher Viney and Peter Phillips Chapter 1 A modern financial system Learning objective 1.1: explain the functions of a modern financial system • The introduction of money and the development of local markets to trade goods were the genesis of the financial system of today. • Money is a medium of exchange that facilitates transactions for goods and services. • With wealth being accumulated in the form of money, specialised markets developed to enable the efficient transfer of funds from savers (surplus entities) to users of funds (deficit entities). • A modern financial system comprises financial institutions, instruments and markets that provide a wide range of financial products and services. • A financial system encourages accumulated savings which are then available for investment within an economy. • Financial instruments incorporate attributes of risk, return (yield), liquidity and time–pattern of cash flows. Savers are able to satisfy their own personal preferences by choosing various combinations of these attributes. • By encouraging savings, and allocating savings to the most efficient users, the financial system has an important role to play in the economic development and growth of a country. Learning objective 1.2: categorise the main types of financial institutions, being depository financial institutions, investment banks and merchant banks,...
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...ACC 563 Quizzes and Exams – Perfect Score Guaranteed Follow the link below to purchase Solutions http://www.hwmojo.com/products/acc563-quizzes-and-exams We have all assignments, Cases and Exams for ACC 563 and many other classes. Email us support@hwmojo.com All Quizzes, Midterm Exam, Final Exam Solution Instant Download Chapter 1 Multiple Choice: 1. Which of the following bodies has the ultimate authority to issue accounting pronouncements in the United States? a. Securities and Exchange Commission b. Financial Accounting Standards Board c. International Accounting Standards Committee d. Internal Revenue Service Answer 2. What historical evidence of the business operations of the private estate of Apollonius was discovered early inthe20th century? a. The Iliad b. Plato's Republic c. The Zenon papyri d. Pacioli’s work, Summa de Arithmetica Geometria Proportioni et Proportionalita, Answer 3. Who has been given credit or developing the double-entry system of bookkeeping? a. Francis Wheat b. Fra Luca Pacioli c. A. C. Littleton d. William Paton Answer 4. Which of the following was not a criticism of the development of accounting standards by the Accounting Principles Board? a. The independence of the members of the APB. The individuals serving on the board had full-time responsibilities elsewhere that might influence their views of certain issues. b. The structure of the board. The largest eight public accounting firms...
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...Chapter 1 A modern financial system: an overview The introduction of money and the development of local markets to trade goods were the genesis of the financial system of today. Money is a medium of exchange that facilitates transactions for goods and services. With wealth being accumulated in the form of money, specialised markets developed to enable the efficient transfer of funds from savers (surplus entities) to users of funds (deficit entities). A modern financial system comprises financial institutions, instruments and markets that provide a wide range of financial products and services. Importantly, a financial system encourages accumulated savings which are then available for investment within an economy. Financial assets, or financial instruments, incorporate attributes of risk, return (yield), liquidity and time-pattern of cash flows. Savers are able to satisfy their own personal preferences by choosing various combinations of these attributes. By encouraging savings, and allocating savings to the most efficient users, the financial system has an important role to play in the economic development and growth of a country. A range of different financial institutions has evolved to meet the needs of financial market participants and to support economic growth. Chapters 2 and 3 examine the major types of financial institutions. At this stage the institutions are categorised by the nature of their principal activities. Depository institutions, such as commercial banks, building...
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...* 3. Introduction to the Global Investment Performance Standards (GIPS®) Global Investment Performance Standards (GIPS®), pp. i–iii and 1–9, (CFA Institute, 4.* 2005) A. Preface: Background of the GIPS Standards B. I. Introduction C. II.0. Provisions of the Global Investment Performance Standards – Fundamentals of Compliance * 5. The Corporate Governance of Listed Companies: A Manual for Investors (CFA Institute, 2005) Learning Outcomes 1. “Code of Ethics and Standards of Professional Conduct” The Code of Ethics establishes the framework for ethical decision making in the investment profession. The candidate should be able to state the six components of the Code of Ethics. The Standards of Professional Conduct are organized into seven standards: I. Professionalism II. Integrity of Capital Markets III. Duties to Clients and Prospective Clients IV. Duties to Employers V. Investment Analysis, Recommendations, and Action VI. Conflicts of Interest VII. Responsibilities as a CFA Institute Member or CFA Candidate Each standard contains multiple provisions for which the candidate is responsible. The candidate should be able to identify the ethical responsibilities required by the Code and Standards. * Readings...
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...False 10. True Essay questions 1. A highly developed and efficient financial system is essential to ongoing economic growth and prosperity. Discuss the component parts that form a financial system and the relevance of the above statement. A financial system consists of financial institutions, financial instruments and financial markets. Financial institutions are classified into five categories according to where they source their funds from and who uses their funds. These include: depository financial institutions e.g. banks; investment and merchant banks; contractual savings institutions e.g. insurance companies; finance companies and general financiers; unit trusts e.g. property trusts. Financial instruments are documents that entitle holders to future cash flows. They are classified into three categories: equity e.g. ordinary share; debt e.g. loan; derivatives e.g. futures contract. Financial markets are the means by which funds are transferred in financial systems and are broadly divided into money markets and capital markets, which are further split into primary and secondary markets. Examples of financial markets include stock market and foreign exchange market. 1 The primary function of the financial system is to facilitate the flow of funds from those who have surplus funds to those who have a shortage of funds. By providing a range of investment and borrowing opportunities, the financial system supports transactions within economies thus providing the means...
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...• TCO A o Discuss all stages in the new venture life cycle o Explain the VOS Indicator, its metrics, and to use VOS to screen a business opportunity o Discuss any aspect of business plans (their structure, development, target audiences, and tensions among the preparers and users) o Articulate the various forms of financing used at the various stages of the new venture life cycle. o Analyze market opportunities and identify the fit between business, market, and opportunity. • TCO B o Differentiate among the various legal forms of organization o Apply tax, liability, and other characteristics of legal form to analyzing business decisions o Discuss GAAP principles such as accrual accounting and its implications on the financials and for entrepreneurial decisions. o The differences between profits, cash, and cash flow o Discuss the specific links among the financial statements – how accounts on one statement influence what happens on the other financials • • TCO C o Use the financial statements to perform ratio analysis o Utilize the Balance Sheet Equation to solve for variables o Build financial statements (such as a Balance Sheet and Income Statement) o Perform EBDAT Breakeven/Survival Revenue calculations and discuss the results o Calculate cash burn, cash conversion, and its components o Perform margin analysis o Explain and calculate contribution margin o Analyze financial statements and explain performance • TCO D o Building multi-year revenue projections ...
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...rewarding and lucrative experience. This experience even though rewarding can come at a tremendous cost of personal time and personal financial investment. Enlisting the efforts and finances of a partner can aide in successfulness of the business while sharing the financial burden and the responsibilities in starting and operating the business. With the right partnership relationship the businesses owners could use the combined abilities and talents in making the business a success. The partners could support each other in the decisions and operation of the business. The decision to start a partnership is one that should be based on common interest and common among the partners. Commonalities like an excellent work ethic and clear understanding of financial discipline should be similar among all parties involved. Operating a business with a partner can also be a very negative experience. Shared decisions and shared profits and disagreements can lead to hard feelings amongst the partners. Partnerships that involve friends or family are a risk too. Friendships can be lost with hard feelings with long lasting effects that can cause families to split. Forming a partnership someone who does not share the same work ethic and financial discipline as the other will make it very difficult to succeed in business. Discuss funding options for small businesses. One of the most challenging experiences of starting a business is finding a d securing the...
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... | FS3032 – Capital Markets MODULE HANDBOOK 2014/15 - Semester 1 Module Lecturer: Dr Phan Tran Trung Dzung Faculty of Banking and Finance / FTU fandzung@ftu.edu.vn This module is supported by Weblearn – students are advised to access the site on a regular basis, at least once a week FS3032 Capital Markets |Teaching Location |A1101 | |Teaching Semester |1 | |Module Level |H | |Home Academic Department |LMBS | |Module Leader |Dr Phan Tran Trung Dzung | |Module Web Site |FS3032C | |Teaching Mode |Day | |Module Title |Capital Markets | |Timeslot | | |Credit Rating For Module |15 | Module Summary CODE: FS3032C TITLE: Capital Markets: Investment & Portfolio Management BRIEF DESCRIPTION: The world of finance...
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...Qualification structure and syllabus CIMA Chartered Management Accounting Qualification 2010 December 2008 Contents CIMA now designs its qualifications in what we believe to be a unique way. Based on rigorous international primary research with all of our key stakeholders and involving the participation of over 6,000 individuals and organisations – members, students, employers (both existing and potential), CIMA tuition partners, universities and our examiner and marker team – we have designed a professional finance training and development solution that is second to none. I commend this revised CIMA Professional Qualification to you. It will be examined for the first time in 2010, so there is plenty of time to absorb the exciting changes contained in the pages that follow. A qualification focused on the future – fit for purpose, relevant and unique I am honoured to introduce the new 2010 Chartered Management Accounting Qualification to all of our stakeholders. With seismic shifts occurring in the world’s economy, coupled with accelerating concerns about the sustainability of our planet, never before has there been a greater need for organisations to train and develop their people to manage the impact of these changes. With this revised qualification CIMA remains true to its long and proud history of providing finance professionals with a difference – Chartered Management Accountants – who combine management and finance skills in a unique way and who fully understand...
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...1. Name the primary objectives of all central banks * Low and stable inflation-when inflation is high it is confusing and it makes it hard to plan. * High and steady growth- stable predictable growth is higher than unstable, unpredictable growth. * Stable financial system- for the economy to operate efficiently the financial markets and institutions need to be stable. * Stable interest rates- interest rate vitality creates risk for both borrowers and lenders * Stable exchange rates- variable exchange rates make the revenues from foreign sales and the cost of purchasing imported goods hard to predict 2. Why is price stability (maintaining low inflation) an important objective of all central banks? $1 should always be worth $1. Prices are central to a market economy and we need to allocate our resources to best use. Inflation is bad for growth because it is unpredictable. Zero inflation is bad because we risk deflation. When inflation is high, growth is low. That’s why stable, low inflation is key. 3. What are the risks and rewards of writing and holding options and discuss the maximum gain, maximum loss and breakeven point. Option writer for a call- receive a premium and are obligated to sell at strike price Option writer for a put- receive a premium and are obligated to buy at strike price Option holder for a call- pay a premium and have the right to buy at the strike price Option holder for a put- pay a premium and have the right to sell...
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.... 1St Unit – Introduction to International finance ‘A’ section. G01 1) What is the objective of International Business? 2) What is MNC? 3) What are the components of Input market? 4) Name the various sources at the micro level of a company? 5) As for as India is concerned what is the Macro view of foreign flow? 6) What you mean by output market? G02 1) What you mean by sectoral Interdependence? 2) What is Foreign exchange risk and Political risk? 3) How licensing and franchising are different? 4) What motivates International Business? Section B G03. 1) Bring out the various factors of differences leading to interdependence. 2) At the micro level of a company what are the sources of Finances? 3) What are the significance of input market and output market? 4) What is the relevance of international finance to a corporate executive? G04 1. What are the distinguishing features of International finance? 2. What are the key decision areas in International Financial Management? 3. What is market imperfection in international finance? 4. What are the various risks involved in international finance? 5. What is the scope of international finance? Section C G05 1) “The emergence of International trade is attributed to sectoral...
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... thousands of stores and millions of associates. Ethics and integrity have been continuous throughout their transformation. Ethics and integrity have defined the company and how they treat their associates, the suppliers, and their patrons. The values that guide Wal-Mart’s decision and leadership are; respect for individuals, service to the customer, and striving for excellence. This paper can discuss Wal-Mart’s responsibility in regard to the role of ethics and compliance as it relates to their financial situation. An explanation of the measures used to ensure ethical behavior and recognize the methods used to conform to the United States Securities and Exchange Commission’s (SEC) regulations. The past two years of Wal-Mart’s annual reports will be used to assess the company’s financial operations and in calculating their financial ratios. The organization’s trends and their financial well-being will be determined by their financial ratios. The role of ethics and compliance: Wal-Mart has three basic components to the role of ethics beliefs and they are “Respect for the individual” which means you should treat everyone with respect and to show consideration for any interaction with customers and co-workers, be courteously and kind at all times. “Service to the Customer” being able to supply the customer with their wants and needs. Welcoming every customer with a smile and provide floor presence that welcome each customer. “Striving...
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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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