Chapter 5 Interest Rates 5.1 How Financial Institutions Quote Interest Rates: Annual and Periodic Interest Rates 1) If you take out a loan from a bank‚ you will be charged ________. A) for principal but not interest B) for interest but not principal C) for both principal and interest D) for interest only Answer: C 2) A company selling a bond is ________ money. A) borrowing B) lending C) taking D) reinvesting Answer: A 3) The phrase "price to rent money" is sometimes used to refer to ________
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will embark on a study of pension plans. Enterprise annuity plan is a system that according to enterprise’s economic strength and conditions established‚ aiming to secure staff retirement income and beyond the basic old-age insurance system for the government enforce. Enterprise pension funds is an important supplement of basic endowment insurance system‚ its direct purpose is improve the level of pension to retired workers. Enterprise annuity plan is generally regard as an important part of human
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Exam II Review Questions Chapter 13 1. a) A bank has risk-weighted assets of $175 and equity of $12.5. If regulators require a minimum risk-weighted capital ratio of 5% given the current level of equity‚ how many new assets with a 100% risk weight can the bank add? How many with a 50% risk weight? b) If the bank had 20% more equity‚ how many new assets with a 100% risk weight could the bank add? How many with a 50% risk weight? How does having more equity affect a bank’s ability to grow? How
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Olsegun Oyewole | The purpose of this paper is to discuss the recommendations of the Katz Commission on retirement funding against the theory of taxation set out by the classical economists. The paper looks at the committee’s assessment of the classical economists’ theory of taxation‚ the proposed changes to the South African income tax system and the implications of this proposed reform on the position of the employer‚ employee and the retirement fund itself. It is necessary to first
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Master of Business Administration - MBA Semester 2 MB 0045 FINANCIAL MANAGEMENT Name: Manybhushan Tiwary Roll : 1205003226 Q1. What are the goals of financial management? A1. The experts in the field of finance believe that if the market value of the firm’s equity is maximized; the goal of the financial management is attained. There are two versions of the goals of the financial Management: Profit Maximization and Wealth maximization. Profit maximization: This is a goal wherein‚ the returns
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Chapter 5 Interest Rates 5-1. Your bank is offering you an account that will pay 20% interest in total for a two-year deposit. Determine the equivalent discount rate for a period length of a. Six months. b. One year. c. One month. a. Since 6 months is [pic] of 2 years‚ using our rule [pic] So the equivalent 6 month rate is 4.66%. b. Since one year is half of 2 years [pic] So the equivalent 1 year rate is 9.54%. c
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Things on the exam: All multiple choice questions – no short answers Over chapters 1-4 No formula sheet Memorize ratios from Chapter 2 Chapter 1 Know steps of financial planning process What common features exist in financial plans Chapter 2 Calculating your net worth Balance sheets Income statement KNOW ratios Chapter 3 Time value of money Bring financial calculator Payments Chapter 4 You don’t have to calculate taxes Know about the process Taxable income What
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An Explanation of the Legal Reserve System The economic challenges that we face in today’s world have become second only to the great depression. The recent collapses of banks and large corporations in our country have made people scramble for a place that has security. We are asked often‚ "Where can we place assets that provide safety and security in uncertain times"? One place that should be considered is life insurance companies that have a Legal Reserve classification. Life companies that comply
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TUTORIAL 2 1. Ali and Abu were neighbours. Ali had to go to Singapore for a business seminar. Before he left‚ he told Abu “Please look after my house”. After two weeks of being away‚ Ali’s house caught fire and Abu could only save a briefcase containing RM30‚000. When Ali returned home‚ he thanked Abu for saving his briefcase and promised he would pay Abu RM2‚000 for what he had done. Later‚ Ali refused to pay what he had promised. Advise Abu. Referring to section 2(d) of Contracts Act1950
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CORPORATE FINANCE – CONCEPT QUESTIONS Class Notes - Introduction to Corporate Finance 1. Finance point of view: Corporation: a money processing machine? * Product markets: everything what corporates make (lead with customers‚ suppliers‚ labor) * Capital markets: generic term for the entities which supply cash to this money processing machine‚ and the processing machine uses the money to do things and then periodic sends money back to the capital market there are inflows from the
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