Homework 1: Please complete your homework on separate pages. For multiple choices question‚ you only need to write down the answers. 1. Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $30‚000 and has cash on hand of $20‚000 contributed by Lanni’s owners. For each of the following transactions‚ identify the real and/or financial assets that trade hands. Are any financial assets created or destroyed in the transaction? a. Lanni takes
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Capital Markets and Investment Banking Process FIN 402 Capital Markets and Investment Banking Process To be aware of fiscal scale as well as assess welfare of any sort of company the Investment Banking is an important factor Germaine to the predicament of the fiscal welfare of a person or a company of any scale. For the efficient manufacturing and sizes there is not any ideal strategy which has been forecasted these days. To match the aim‚ vision and objectives described through the fiscal
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physical properties Examples include buildings‚ land‚ machinery Intangible asset-represents legal claims to some future benefits. Examples include various types of financial assets Types of Financial Assets Bank loans Government bonds Corporate bonds Municipal bonds Foreign bond Common stock Preferred stock Foreign stock Properties of financial assets 1. Moneyness-financial asset act as a medium of exchange or in settlement of transaction. 2. Divisibility and denomination-relates to the minimum size
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house. 5) Which of the following instruments are traded in a money market? B A) State and local government bonds. B) U.S. Treasury bills. C) Corporate bonds. D) U.S. government agency securities. 6) Bonds that are sold in a foreign country and are denominated in the countryʹs currency in A which they are sold are known as A) foreign bonds. B) Eurobonds. C) equity bonds. D) country bonds. 7) Adverse selection is a problem associated with equity and debt contracts arising from A A) the lender’s
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in European and Asian stocks. An international mutual fund investing in a wide variety of stocks within and outside one’s country. 3) Which of the following assets would pay a dividend? U.S. Treasury security Municipal bond Share of preferred stock Corporate bond 4) The market price of a bond in today’s dollars is the future value of its promised future coupon and principal payments. True or False 5) The dot-com bubble reminds us about what? Capital markets are probably never efficient. Capital markets
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• Examples of financial assets: U.S. Treasury bonds‚ Foreign bond‚.Home mortgage loan‚Common stock. Financial assets are referred to as debt instruments in the case of: U.S. Treasury bonds‚ Corporate bonds‚ Municipal bonds. Financial assets represent a residual claim in the case of Common stock. The process of valuing financial assets include: Estimating the cash flows‚ Determining the appropriate discount rate‚ Discounting the expected cash flows. the following risks are associated with realizing
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governments pay bond interest that is partly or fully tax free. Munis is a catch-all term for municipal bonds sold by state and local governments. The interest munis pay is generally exempt from federal tax and is usually exempt from state and local taxes for residents of the locality where the bond is issued. If you sell munis for a profit‚ however‚ you may owe capital gains tax. And‚ in some cases‚ the interest may be subject to the alternative minimum tax (AMT). Municipal bonds‚ like other investments
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assets; liabilities B) liabilities; assets C) negotiable; nonnegotiable D) nonnegotiable; negotiable 2) When I purchase ________‚ I own a portion of a firm and have the right to vote on issues important to the firm and to elect its directors. A) bonds B) bills C) notes D) stock 3) ________ are short-term loans in which Treasury bills serve as collateral. A) Repurchase agreements B) Negotiable certificates of deposit C) Federal funds D) U.S. government agency securities 4) An example of
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A short-term debt instrument issued by well-known corporations is called ________. 2) _______ A) corporate bonds B) municipal bonds C) commercial paper D) commercial mortgages 3) An example of economies of scale in the provision of financial services is ________. 3) _______
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The Yield Curve is very similar to the term structure except that it is based on coupon bond yields whereas the term structure is based on only pure discount bonds. In looking at the current Yield Curve we can see that the general shape is that of an upward-sloping structure. In relation to anticipated future inflation this curve indicates that inflation is expected increase which is evident by the increasing size of the inflation premium wedge that is causing the overall curve to slope upward
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