Personal Interest - 565 Words
Every profession has sacred principles or ethics governing its operation or activities. Banking is no exception. Some of these principles defining sound banking behaviours are;
1. control mismatch between assets and liabilities
2. know your counterparty
3. expand cautiously into unfamiliar activities
4. avoidance of undue concentration of loans to a single activity, individuals and group
But in a situation where banks all over the world are found wanting in...
565 Words | 2 Pages
Compound Interest - 284 Words
Compound interest is interest added to the principal of a deposit or loan so that the added interest also earns interest from then on. This addition of interest to the principal is called compounding. A bank account, for example, may have its interest compounded every year: in this case, an account with $1000 initial principal and 20% interest per year would have a balance of $1200 at the end of the first year, $1440 at the end of the second year, $1728 at the end of the third year, and so on....
284 Words | 1 Page
Interest Rate - 6172 Words
TABLE OF CONTENTS
Executive summary ………………………………………………………8
1. Project Profile ………………….…………………………………………9
3. Theoretical aspects………………………………………………………13
4. Review of the Literature ……..……………………………………..…..16
5. Determinants of yield curve…………………………………………..…19
8. Bibliography …………………………………………………………….38
9. Appendices ……………………………………………………………...39...
6,172 Words | 23 Pages
Interest and Topic - 10266 Words
Basic Macroeconomic Relationships
Topic Question numbers
1. Consumption function/APC/MPC 1-39
2. Saving function/APS/MPS 40-53
3. Shifts in consumption and saving functions 54-69
4 Graphs/tables: mixed consumption and saving 70-106
5. Investment demand 107-145
6. Multiplier effect 146-181
Consider This 182-183
Last Word 184-185
10,266 Words | 41 Pages
All Interest Essays
Simple Interest - 830 Words
Question #1 |
| | Jamie wants to earn $500 in interest so she’ll have enough to buy a used car. She puts $2000 into an account that earns interest. How long will she need to leave her money in the account to earn $500 in interest? |
| | |
Question #2 |
| | A local bank is advertising that you can double your money in eight years if you invest with them. Suppose you have $1000 to invest. What interest rate is the bank offering? |
Try These |
| | | |...
830 Words | 4 Pages
Effective Interest Rate of Mfis
Under The Supervision Of:
Mohammad Akter Hossain
Department Of Finance & Banking
University Of Chittagong
28 April 2012
Letter of submission
Mr. Mohammad Akter Hossain
Department of Finance & Banking
University of Chittagong.
Subject: Prayer for obliging the ‘TERM PAPER’.
With due respect, beg to focus your kind attention with the following fact that as requirement of the BBA Programme I had visited...
4,992 Words | 18 Pages
Models for Interest Rate Risk
Interest risk is the possibility of unexpected adverse changes in interest revenues and expenses. It can be shown that interest rate changes are unpredictable almost 100%. They depend on monetary policy; supply and demand, inflation etc. These in turn depend on many other factors. So how do financial institutions manage the risk of fluctuating interest rates give that they cannot predict it?
The immunization of a portfolio against interest rate risk means that the portfolio will neither gain...
274 Words | 1 Page
Interest and Risk-free Rate
Skip Navigation This page features MathJax technology to render mathematical formulae. If you are using a screen reader, please visit MathPlayer to download the plugin for your browser. Please note that this is an Internet Explorer-only plugin at this time. Introduction to Finance
Top Navigation BarCourses Shravan Vepa
Introduction to Finance
by Gautam Kaul
Course Home Page Side Navigation Bar
1,248 Words | 4 Pages
Is Is Ethical to Charge Interest
When we talk about banks, loans or even money, it is very common to hear words such as interest, usury, risks, etc. We mention these words very often and many times we do not even know what they mean. But this is not it; it gets more interesting when we start linking all this stuff with other topics such as religion, ethics and moral values. Going back to the beginning, when we start talking about banks and money, it is known by everybody that banks’ main business are the loans and the...
777 Words | 2 Pages
BUSANA1 Compund Interest - 423 Words
If the principal is P50,000 and the interest rate is 12% compounded quarterly, what is the compound interest at the end of 5 years?
Find the compound amount if P17,500 is invested at 9.2% compounded semi-annually for 3.5 years.
Determine the present value of P150,000 due in 6 years if the interest rate is 5.5% compounded annually.
If P135,650 is the maturity value of a sum invested at 13.2% compounded semi-annually or 9 years and 6 months, find the present value and the compound interest...
423 Words | 2 Pages
Compound Interest and Rate - 15585 Words
TIME VALUE OF MONEY
(Difficulty Levels: Easy, Easy/Medium, Medium, Medium/Hard, and Hard)
Please see the preface for information on the AACSB letter indicators (F, M, etc.) on the subject
Multiple Choice: True/False
Starting to invest early for retirement increases the benefits of
Starting to invest early for retirement reduces the...
15,585 Words | 224 Pages
Interest Rate Risk - 3578 Words
Interest Rate Risk (IRR) Management
What is Interest Rate Risk :
Interest rate risk is the risk where changes in market interest rates might adversely affect a bank’s financial condition. The management of Interest Rate Risk should be one of the critical components of market risk management in banks. The regulatory restrictions in the past had greatly reduced many of the risks in the banking system. Deregulation of interest rates has, however, exposed them to the adverse impacts of interest...
3,578 Words | 10 Pages
Interest and Real Rate - 1754 Words
P6–1 Interest rate fundamentals: The real rate of return Carl Foster, a trainee at an
Investment banking firm, is trying to get an idea of what real rate of return investors
Are expecting in today’s marketplace. He has looked up the rate paid on 3-month
U.S. Treasury bills and found it to be 5.5%. He has decided to use the rate of change
In the Consumer Price Index as a proxy for the inflationary expectations of
Investors. That annualized rate now stands at 3%. On the basis of the...
1,754 Words | 9 Pages
Interest Rate Swap Case
Goodrich-Rabobank Interest Rate Swap
In 1983, both B.F. Goodrich and Rabobank needed to execute external financing in order to raise 50 million dollars for ongoing operations. Goodrich wanted to raise the money through debt financing, but because their bonds were BBB- rated, they would have to pay a steep interest rate for a fixed rate. However, the Solomon brothers had an idea. Goodrich could borrow with a floating rate that was tied to LIBOR and then swap interest payments with a...
732 Words | 2 Pages
Interest and Engine Production - 310 Words
The cost of goods sold and the other interest expense are the most responsible for the drop in income in the year of 1980.
First, Massey’s engine production was concentrated in UK. Together with the influx of North Sea oil, the British pound had been increased a lot, and hence the cost of goods sold in 1980 had been increased.
Besides, the other interest expense was also included since the total amount in 1980 was approximately doubled to the amount in 1979. With the high interest...
310 Words | 1 Page
The Concept of Interest and Rate - 4150 Words
comprehensive exam question bank
Identify the choice that best completes the statement or answers the question.
1. What would the future value of $100 be after 5 years at 10% compound interest?
2. Suppose a U.S. government bond promises to pay $2,249.73 three years from now. If the going interest rate
on 3-year government bonds is 6%, how much is the bond worth today?
4,150 Words | 40 Pages
Interest Rate Pass-Through
Interest rate pass-through: the case of Hungary
Csilla Horváth, Judit Krekó, Anna Naszódi Magyar Nemzeti Bank, Budapest, 1850, Szabadság tér 8-9, Hungary Telephone: 00-36-1-428-2600, Fax: 00-36-1-428-2590
Email: [email protected], [email protected], [email protected]
Interest rate pass-through: the case of Hungary
Csilla Horváth, Judit Krekó, Anna Naszódi
Abstract In this paper we analyze the interest rate pass-through in Hungary, with the help of ECM and TAR models, using both aggregated and...
13,119 Words | 45 Pages
Interest rates and bond Valuation
INTEREST RATES AND
L E A R N I N G
Describe interest rate fundamentals, the term
structure of interest rates, and risk premiums.
Review the legal aspects of bond financing and
Discuss the general features, quotations, ratings,
popular types, and international issues of corporate bonds.
G O A L S
Apply the basic valuation model to bonds and
describe the impact of required return and time to...
18,482 Words | 132 Pages
Interest and Answer Score Explanation
file:///C:/Documents and Settings/Administrator/Рабочий стол/index.html
Skip Navigation This page features MathJax technology to render mathematical formulae. If you are using a screen reader, please visit MathPlayer to download the plugin for your browser. Please note that this is an Internet Explorer-only plugin at this time.
Introduction to Finance
Feedback — Assignment 9
You have submitted this Assignment on Wed 26 Sep 2012 8:58:18 PM EEST. You achieved a score of...
1,583 Words | 6 Pages
Chinese Interest Rate Liberalization
Excerpts from My Essay on “Chinese Interest Rate Liberalization”
Why would a nation want to liberalize interest rates? There are both positive and negative consequences to discuss here. Positively, looking at the effects on monetary policy, “liberalization enhances the effectiveness of indirect policy and interest rates as price signals,” (Feyzioglu, 11). Historical examples have shown that monetary policy becomes “highly effective after interest rate liberalization,” (11). Also, liberalizing...
1,168 Words | 4 Pages
net interest margin SBI
ITM Business School
Scope and means to improve NIMs in comparison to other banks
Internship report submitted to SBI in completion of the requirement of summer internship at
State Bank of India
Mr A. Raizada
APRIL 22 2013 TO JUNE 22 2013
CERTIFICATE OF COMPLETION
This is to certify...
3,901 Words | 18 Pages
Financial Environment and Interest Rate and Inflation
An Assignment of Business Finance Course Code: FIN -2101
Md. Monzur Morshed Bhuiya Associate Professor Department of Finance Jagannath University, Dhaka.
Md. Mazharul Islam. Group Representative of Finance Interface B.B.A, 3rd Batch (2nd Year, 1st Semester) Session: 2008-2009 Department of Finance Jagannath University, Dhaka.
Date of Submission: 25-10-2010
Department of Finance
Sl. No. Name 01. Md. Mazharul Islam....
4,265 Words | 16 Pages
Finance: Interest and Risk-free Rate
( 5 points) In a world with no frictions (taxes, etc.), value is created by how you finance a project.
(5) The return of equity is equal to the return on debt of a project/firm
(10 points) Moogle, Inc. is in the same business as Google, Inc., but has recently retired all its debt to become an all-equity firm. Its return on equity has dropped from 12.25% to 10.60% as a result of this. Google, Inc....
1,030 Words | 3 Pages
Interest Rate Behavior and Lending in Microfinance
Interest Rate Behavior and Lending in Microfinance
Abstract: This essay analyzes factors which affect interest rate behavior and its subsequent impact on lending in microfinance. Here we have used regression model for our analysis. Furthermore comparison has been drawn among the different sources of loans outside Bangladesh. Here the experience of microfinance outside Bangladesh like India, South and South-East Asia, Latin America has been fully illustrated. This essay conducts...
6,452 Words | 22 Pages
Interest rate risk in Islamic banking
Interest Rate Risk in Islamic Banking
Many countries, especially those with a substantial number of Muslim citizens operate a dual
banking system. This system has both the Islamic and conventional banking systems which cater for
the needs of both the Muslim bankers and the non-Muslim bankers. In a conventional and theoretical
banking system, it would be expected that a change in the banking interest rates would yield a
responsorial change for customers in the event that the...
3,381 Words | 10 Pages
Interest and 90-day Bank Loan
Accounts receivable changes with bad debts A firm is evaluating an accounts receivable change that would increase bad debts from 2% to 4% of sales. Sales are currently 50,000 units, the selling price is $20 per unit, and the variable cost per unit is $15. As a result of the proposed change, sales are forecast to increase to 60,000 units.
a. What are bad debts in dollars currently and under the proposed change?
b. Calculate the cost of the marginal bad debts to the firm.
c. Ignoring the...
337 Words | 1 Page
Goodrich Rabobank Interest Rate Swap
1. How large should the discount (X) be to make this an attractive deal for Rabobank?
2. How large must the annual fee (F) be to make this an attractive deal for Morgan Guaranty?
3. How small must the combination of F and X be to make this an attractive deal for B.F. Goodrich?
4. Is this an attractive deal for the savings banks?
5. Is this a deal where everyone wins? If not, who loses?
Players: Morgan Bank, Rabobank, and B.F. Goodrich, Salomon Brothers, Thrift...
1,057 Words | 5 Pages
Effects of Interest Rates on Price of Securities
Yield (total return) = Dollar inc + (end-beg)
Risk of Return = r= Risk Free rate + Risk Prem
Risk Free Rate = rRF = r* + IP
-effects of int rates on PV/Price of securities: int goes up, value of bonds goes down, stock goes down (NPV) Prices
-factors that influence int rates/yield curve
1.production opportunities-return avail w/in an economy from inves. In productive asset; higher prod opp, higher return
2. Time preferences for consumption...
2,369 Words | 7 Pages
Interest and S & P500 Nikkei Russell
Instruction to students:
1. This assignment should be completed individually and neatly.
2. Marks will be given to equations and workings.
3. Plagiarism will be treated seriously. ZERO Marks will be given for assignments that have been found wholly or partly involved in plagiarism (no matter these assignments are from the original authors or from the plagiarists).
4. Answer should be corrected to 2 decimal places if any.
5. Words limit: each essay type part cannot be answered by more...
522 Words | 3 Pages
Time Value of Money and Annual Interest Rate
Prof. Ramakar Jha/Financial Management/Time Value of Money/Exercise # 1
Financial Management: Prof Ramakar Jha
Exercise 1: Time Value of Money
1. You are planning to retire in twenty years. You'll live ten years after retirement.
You want to be able to draw out of your savings at the rate of Rs.10,000 per year. How
much would you have to pay in equal annual deposits until retirement to meet your
objectives? Assume interest remains at 9%. [Rs.1254]
2. You can deposit Rs.4000 per...
850 Words | 3 Pages
Chapter 7 Interest Rates and Bond Valuation
Discounted Cash Flow Valuation
a 1. An annuity stream of cash flow payments is a set of:
a. level cash flows occurring each time period for a fixed length of time.
b. level cash flows occurring each time period forever.
c. increasing cash flows occurring each time period for a fixed length of time.
d. increasing cash flows occurring each time period forever.
e. arbitrary cash flows occurring each time period for no more than 10 years....
9,043 Words | 40 Pages
Relation Between Bi Rate and Banks Interest Rate
Part I – Relation between BI rate and banks interest rate
A. BI rate
We take the BI rate, as the variable being estimated, from the period of 2006 until 2012. We then take the average rate in each year, rather than taking the rate in each month. As a note to the year 2012, we take the average rate that ranges only from January until August.
Figure 1. BI rate (Percent per Annum)
Indonesian Financial Statistics, Bank of Indonesia,...
2,040 Words | 8 Pages
Reading Notes for The Theory of Interest for Irving Fisher
Reading notes from Irving Fisher’s The Theory of Interest, 1930
Preface -- It was the misunderstanding of my theory of interest put forward in my 1907
book the Rate of Interest that led me to adopt the catchword “investment opportunity” as
a substitute for the inadequate term “productivity” which had come into general use.
This combined with my early “impatience theory” led to the impatience and opportunity
theory which can be said to be distinct from all other theories of interest...
33,232 Words | 85 Pages
Effect of Interest Rate on Investment Determination in Nigria
EFFECT OF INTEREST RATE ON INVESTMENT
DETERMINATION IN NIGERIA (1970-2008)
This study examines the effect of interest rate on investment determination in Nigeria. The study is necessitated by the fact that the behavior of interest rates to a large extent determines investment activities and economic growth of any country. Investment decision is seen as demand for credit in an economy and this study calculated the annual variance of interest rate and its effects on investment...
9,874 Words | 31 Pages
Consequences of High Interest Rates in the Ghanaian Economy…..
Interest rates are among the closely watched variables in the economy. The media on daily bases record their movement because they affect our everyday lives and have crucial consequences for the health of the economy. They affect personal decisions as whether to consume or save, whether to buy a house and whether to purchase bonds or put funds into a savings account. Interest rates also affect the economic decisions of households or businesses such as whether to put their money in...
5,431 Words | 17 Pages
Thesis on Capm and Its Applications: Interest Rate Sensitivity of Stock Returns
M.Sc. Economics and Finance Dissertation INTEREST RATE SENSITIVITY OF STOCK RETURNS
I would like to thank my supervisor Dr. Illias Tsiakas for his continued support and Encouragement. I would like to thank my father, mother and my sister for their tremendous support and understanding not only through the period of this thesis but for the period of the entire masters programme. In addition I would like to thank some of my friends who supported and encouraged me. Special...
11,092 Words | 35 Pages
Interest Rates and Other Critical Determinants of Investment Spending in Bangladesh
Interest Rates and Other Critical Determinants of Investment Spending in Bangladesh
Investment, which is a spending devoted to enhancing or maintaining the existing stock of capital in the economy provides goods and services necessary for better standard of living. Moreover, it has greater importance as a policy tool. Policymakers often try to achieve target growth in GDP by influencing the level of investment. They do so by undertaking policies that influence the rate of...
3,220 Words | 11 Pages
Sme Financing in Japan: Characteristics and Problems, Predominance of Low-Interest Rate Loans
SME Financing in Japan: Characteristics and problems, predominance of low-interest rate loans
UESUGI Ichiro Senior Fellow, RIETI
WANABE Wako Associate Professor, Keio University
Following the global financial crisis, although overall business conditions for Japanese small and medium-sized enterprises (SMEs) became extremely difficult, relationships between SMEs and their creditor banks have been relatively stable. Yet, it has long been said that...
1,582 Words | 5 Pages
Interest Rate Risk Analysis Case Study : Brac Bank
Table of Content
1. Executive summary iv
2. Introduction 2
3. Repricing Model 2
I) Refunding or funding gap 3
II) Advantage/Disadvantage 4-5
4. Maturity Model 6-10
5. Weakness of maturity model 11
6. Duration Model 12-15
7. Limitation of Duration model 15
8. Case Study –Brac Bank Ltd 16-20
Interest Rate Risk - In the process of FIs performing their...
4,153 Words | 18 Pages
A Consumer's Interest Rate for a Credit Card Debt Should Not Be Based on Their Credit Score
A Consumer’s Interest Rate for a Credit Card Debt Should Not Be Based on Their Credit Score
This topic can be agreed with and disagreed with. This conclusion is based on if you have applied for a credit card and you have been denied because you have had a credit card resent on your credit card than you interest rate should be high. The reason your interest rate should be high is because the credit card company is taking a chance on giving you there credit card. With you having to pay...
534 Words | 2 Pages
ECO 316 Week 2 Chapter 7 Risk Structure and Term Structure of Interest Rates
In this document of ECO 316 Week 2 Chapter 7 Risk Structure and Term Structure of Interest Rates you will find the answers on the next questions:
7.1 Multiple Choice Questions
1) The risk structure of interest rates refers to
2) Default risk arises from the fact that
3) If the average risk premium of corporate bonds increases,
4) Currently, a three-month Treasury bill pays 5% interest and a ten-year Treasury bond pays 4.7% interest. What is the risk premium of the...
369 Words | 3 Pages
Teletech Case - 1193 Words
The Teletech Corporation operated in two business segments: Telecommunications Services (TS), and Products and Systems (P&S). Though Teletech was a dominant service provider in the area, the company has been experiencing a downtrend of earning growth and stock prices due to keener competition and worse performance in certain segment.
Teletech has been using economic profit as a measure of value creation at the segment and business-unit level and net present...
1,193 Words | 5 Pages
Mathematics of Investment - 945 Words
MATHEMATICS OF INVESTMENT
If you borrow a car from a car rental company or if you live in someone else’s house or apartment, you have to pay rent. Like paying rent for the use of a car or a house, you also have to pay rent for the money you borrowed. This is called interest. People like Marco earn by charging interest on loans. Banks earn most of their income from the interest that people pay for the amounts they borrow. How much interest one has to pay depends on three...
945 Words | 4 Pages
CREDIT MANAGEMENT IN NIGERIA BANKS
CREDIT MANGEMENT IN NIGERIA BANKS:
AJUGWE CHUKWU ALPHONSUS
Credit Management is one the most difficult task facing bankers all of over the world and the case is more pronounced in the Nigeria situation because going through the history of banking in Nigeria, one can observed that the major source of bank failures was ineffective credit management that led to accumulation of bad debts. Credit administration is the bane of Nigeria banks and a major source of worry to Regulatory...
7,190 Words | 18 Pages
Hk-Disney Syndication by Chase
Chase’s Strategy for Syndicating the Hong Kong Disneyland Loan
XIA Yidan, ZHANG Kuo, ZHU Shihuai, WANG Qian
Chase’s Strategy for Syndicating the Hong Kong Disneyland Loan
XIA Yidan, ZHANG Kuo, ZHU Shihuai, WANG Qian
How should Chase have bid in the first round competition to lead the HK$3.3 billion Disneyland financing (Bid to win or bid to lose?)
In the first round of competition, there...
3,900 Words | 12 Pages
New Century Financial - 1442 Words
Case 3 – New Century Financial Corporation
1. Describe and evaluate New Century’s business model?
New Century Financial Corporation, headed by founders Brad Morrice, Edward Gotschall, and
Robert, was a firm which specialized in subprime mortgages. The company originated, sold, and
serviced subprime home mortgage loans. New Century was structured as a real estate investment
trust (REIT) and was composed of two operating divisions. The Wholesale Loan Division,
known as New...
1,442 Words | 9 Pages
Time Value of Money - 734 Words
In financial management, one of the most important concepts is the Time Value of Money (TVM). Time Value of Money concepts helps a manager or investors understand the benefits and the future cash flow to help justify the initial cost of the project or investment. Many of the assets businesses and individuals own are financed with money borrowed from others, so the understanding of TVM is crucial to making good buying decisions. To recognize how annuities affect the time value of money, managers...
734 Words | 3 Pages
Credit Appraisal Process - 19596 Words
A journey is easier when we travel together. Interdependence is certainly more important than
independence. It will always be my pleasures to thank those who have helped me in making this project a lifetime experience for me. I would like to express my heartiest gratitude to Bank of India, for giving me an opportunity to work with its Main Branch situated at Civil Lines,...
19,596 Words | 73 Pages
General Maths Financial Maths
Credit and Loans:
Simple Interest and Flat Rate Loans:
A flat rate loan is one where flat or simple interest is charged on an amount borrowed or principal for the term of the loan. Interest is always charged on the full amount of the loan.
I = Prn
P = principal
r = rate per period expressed as a decimal
n = number of periods
E.g. Phil borrowed $4000 for three years at 8%p.a. (per annum) (flat rate)
a) What is his interest?
b) What is the total repaid?
1,130 Words | 7 Pages
Assignment 8 - 355 Words
She won’t be able to afford the loan on a 15% interest rate as the monthly payment for the loan would be R -2379.99 which is R 178.00 over her monthly projected budget for the loan.
Top of Form
DataBottom of Form
Annual interest rate
Number of months of payments
Amount of loan
R -2 378.99
Monthly payment for a loan with the above terms
1. Can she afford the loan if the annual interest rate is 10%? Yes
2. Can she...
355 Words | 5 Pages
Company evaluation report - 10022 Words
GOODMAN FIELDER LIMITED (GFF)
COMPANY VALUATION REPORT
Investment BAFI 1042
Kevin Dorr 3195598
COMPANY VALUATION REPORT
The report looks at all publicly available data about the company via
the annual reports and publications
An analyses of the company’s weakness and strength has been
conducted with detailed look at the fundamentals impacting the company
The report outlines the ratios in relation to probability, return on
10,022 Words | 64 Pages
Chase’s Strategy for Syndicating the Hong Kong Dis
FINA 3088 Case Study 1
---- Chase’s Strategy for Syndicating the Hong Kong Disneyland Loan (A)&(B)
Bid Strategy of the First Round
The first round bid was to show its commitment and price, while detailed proposal would be submitted after being shortlisted. Thus, Chase had mainly three kinds of concern at that stage: risk, profit and reputation.
From Exhibit 6, there is no doubt that Chase was the top bank in syndicated finance in the US and over the world. However, it...
2,622 Words | 9 Pages
Cardinal Principles Of Lending Saikat S
Cardinal Principles of lending:
A bank is an institution which is primarily seen as a body that accepts monetary deposits from its customers (general public), looks after their money, offer them some beneficial services such as cheque books to make payments and lends money to other public (borrowers). Now lending money to someone comes with some inherent risks especially when a bank uses its depositors’ money to lend. To put it simply a bank’s major operation is to borrow money from depositors...
1,969 Words | 6 Pages
Shark Loan Company - 328 Words
The Shark Loan Company The Shark Loan Company provides ﬁnance for car purchasers who are buying second-hand cars. The company is in contact with a large number of dealers in the UK and offers a low interest rate loan scheme for selected purchasers. Dealers will use different loan companies depending on the status of their purchaser. When a purchaser requires ﬁnance the dealer sends a credit application on behalf of the purchaser to the local Shark ofﬁce. The local ofﬁce enters these details on...
328 Words | 1 Page
Corporate Finance Study Notes
Solutions to Chapter 10 Introduction to Risk, Return, and the Opportunity Cost of Capital capital gain + dividend ($44 − $40) + $2 = = 0.15 = 15.0% initial share price $40
Rate of return =
Dividend yield = dividend/initial share price = $2/$40 = 0.05 = 5% Capital gains yield = capital gain/initial share price = $4/$40 = 0.10 = 10%
Dividend yield = $2/$40 = 0.05 = 5% The dividend yield is unaffected; it is based on the initial price, not the final price. Capital gain = $36 –...
1,863 Words | 9 Pages
Bonds Valuation by Gitman - 3209 Words
Interest Rates and Required Returns
As noted in Chapter 2, financial institutions and markets create the mechanism through which funds flow between savers (funds suppliers) and borrowers (funds demanders). All else being equal, savers would like to earn as much interest as possible, and borrowers would like to pay as little as possible. The interest rate
prevailing in the market at any given time reflects the equilibrium between savers and borrowers.
INTEREST RATE FUNDAMENTALS
3,209 Words | 10 Pages
Quantitative Skill Pass Year Exam
Page 1 of 6
SECTION A : ANSWER ALL QUESTIONS ( 5 MARKS EACH )
A discount store sold plastic cups for $0.35 each and plastic plates for $0.40 each. If 200 plastic cups and plates were sold for a total of $76, how many cups and plates were sold?
Find the exact interest on a loan of $2000 at 11% annually. The loan was made on February 15 and was due on 25 August in a non-leap year.
A sofa set was purchased with $500 down payment and 24 payments of $125. i. ii. Find...
998 Words | 6 Pages
Raghunath Prasad CASE - 2477 Words
Raghunath Vs. Sarju Prasad – Father and son equal owners of a vast joint family property – both quarrelled over it – Father instituted criminal proceedings against the son – In order to defend himself, the son borrowed money from the plaintiff at 24% compound interest and mortgaged his properties – In eleven years, the amount payable magnified more than eleven fold – Defendant contended that plaintiff/lender taking unconscionable advantage of his mental distress and exercised undue...
2,477 Words | 6 Pages
Afw 362 - 440 Words
Tutorial Answer for Chapter 5
1. Which should have the higher risk premium on its interest rates, a corporate bond with a
Moody’s Baa rating or a corporate bond with a C’s rating? Why? The bond with a C rating should have a higher risk premium because it has a higher default risk, which reduces its demand and raises its interest rate relative to that of the Baa bond.
2. Why do US treasury bills have lower interest rates than large-denomination negotiable bank
CDs? U.S. Treasury bills...
440 Words | 2 Pages
Significant Class of Transactions Template
Entity: | Vietcombank | | Period ended: | 31/12/2012 |
Significant class of transactions/significant disclosure process name: | Credit origination - Transaction processing | |
Significant class of transactions/ significant disclosure process owner: | Credit Policty at HODebt management division Client Division | |
We obtain an understanding of the significant classes of transactions (SCOTs) and significant disclosure processes to identify and understand the risks of material...
3,254 Words | 10 Pages
Sources of Finance - 3115 Words
Class: Lower 6
Subject: Business studies
Sources of Finance
* Why do businesses need finance?
* Types of finance
* Internal sources of finance
* External sources of finance
* Factors to be considered when choosing sources of finance
Sources of finance
Finance is the study of how investors allocate their assets over time under conditions of certainty and uncertainty. A key point in finance, which affects decisions, is the time value of...
3,115 Words | 10 Pages
I35EwWP4vi72BapkLzF288V0L0L59yXu2ahMMdAkSz0lWLG9gvAtbjWYJ9pnuxfa - 1025 Words
1- Al-Ahli Bank has issued a one-year commitment loan of BD 7 million at an interest rate of 5%. The Bank requires a compensating balance of 15% on loan given. The bank must maintain 5% reserve requirement on the compensating balance. The customer is expected to draw down 80% of the commitment. The total fees collected (up-front and Back end) from the customer are 12,280. What is the expected rate of return of this loan for the Bank?
Loan given = 7m x 80% = $5,600,000...
1,025 Words | 5 Pages
finance - 1707 Words
Project vs Firm Risk and the
Impact of Leverage
The SML and WACC
§ Consider 100% equity financed firm
§ Beta = 1
E/V = 1!
D/V = 0!
§ WACC =?
WACC = × RE + × RD × (1 − TC ) = RE
WACC = Cost of equity from CAPM
WACC = RE = R f + β × E [RM ] − R f = E [RM ]
SML and WACC
WACC = E[RM]
R f + β × E [RM ] − R f
Accept Projects Y and/or Z?
1,707 Words | 18 Pages
Loan Details - 507 Words
Features & Benefits of SBI Home Loan
• Purchase/ Construction of House/ Flat.
• Purchase of a plot of land for construction of House.
• Lowest Home Loan Interest Rates.
• Extension/ repair/ renovation/ alteration of an existing House/ Flat.
• Takeover of an existing loan from other Banks/ Housing Finance Companies.
• Interest charged on the daily reducing balance
• No penalty on prepayments of home loan
• No hidden costs
• Option to club income of your spouse and children to compute...
507 Words | 3 Pages
credit risk - 2082 Words
RATIONALE AND BACKGROUND
The banking sector is the backbone of the Philippine economy and plays an important financial intermediary role. A major part of the income earned by banks comes from the interests of the loans extended to individuals and corporations. However, there is no assurance that debtors can always pay back the amount granted to them, including any interests that might accrue. Such uncertainty to the repayment of loans is referred to as credit risk....
2,082 Words | 8 Pages
Business Math - 3371 Words
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%....
3,371 Words | 16 Pages
Padgett Company - 2254 Words
BA280.1: Corporate Finance
Case #3: Padgett Paper Products Company
Almera / Demasu-ay / Libo-on / Olaño / Reboton / Relucio / San Luis
Our company, Padgett Paper Product (PPP) is a closely held publicly listed paper manufacturing company whose ownership remained with the descendants of the founder and whose majority of family members was inactive in company’s management. Major connection of these family members...
2,254 Words | 9 Pages
What is EMI? - 362 Words
What is EMI?
Equated Monthly Installment – EMI for short – is the amount payable every month to the bank or any other financial institution until the loan amount is fully paid off. It consists of the interest on loan as well as part of the principal amount to be repaid. The sum of principal amount and interest is divided by the tenure, i.e., number of months, in which the loan has to be repaid. This amount has to be repaid monthly. The interest component of the EMI would be larger in the...
362 Words | 2 Pages
faaxa - 6013 Words
TYPES AND COSTS OF FINANCIAL CAPITAL
In this chapter, we characterize financial markets and focus on developing an understanding of the how one obtains and pays for financial capital. Without adequate capital, even the best ideas and ventures cannot succeed. The cost of debt is relatively easy to understand and apply because it is primarily captured in the stated interest rate for a loan or bond. In contrast, the cost of equity is more difficult to grasp. One...
6,013 Words | 31 Pages
Marriot Case - 1160 Words
APPLIED CORPORATE FINANCE
ASSIGNMENT – 1
GROUP: 13 SECTION: AB
Using the M&E theory, we assumed that the leverage was constant and calculated the WACC for each segment of the corporation: 8.64% for Lodging, 10.35% for Restaurants and 9.74% for Contracts Services.. We understood that minor differences in the WACC...
1,160 Words | 4 Pages
Mortgage Crisis - 1132 Words
Attached is a sample of loan-level information (Exhibit 2). How would you expect an applicant’s debt-to-income ratio to relate to other loan characteristics, such as credit score? (Narrative)
In analyzing an applicant’s debt-to-income ratio, I would take into account how much money the applicant makes monthly/yearly in order to determine the likelihood that they are able to pay off the loan in its entirety. For example, an applicant whose income greatly surpasses their debt to the point where...
1,132 Words | 4 Pages
Castillo Mini Case 2
The Castillo Products Company was started in 2008. The company manufactures components for personal digital assistant (PDA) products and for other handheld electronic products. A difficult operating year, 2009, was followed by a profitable 2010. The founders (Cindy and Rob Castillo) are interested in estimating their cost of financial capital because they are expecting to secure additional external financing to support planned growth.
Short-term bank loans are available at an 8 percent interest...
1,094 Words | 4 Pages
Project Funding - 5699 Words
8.1 MONEY: A BASIC RESOURCE
The essential resource ingredients that must be considered in the construction of a project are usually referred to as the four Ms. These basic construction resources are (1) money, (2) machines, (3) manpower, and (4) materials. They are presented in this order since this is the sequence in which they will be examined in the next few chapters. Here, the first of these resources to be encountered in the construction process,...
5,699 Words | 19 Pages
Beta and Wacc - 1790 Words
Chapter 12 – Determinants of Beta and WACC
Ct is not known for certain. It is a random variable. It has a probability distribution with a mean and standard deviation.
Ct = E(Ct) = expected cash flow
“r” is the appropriate cost of capital. It should have the same riskiness as Ct
If Ct is a normal extension of the firm’s operations, and the firm is entirely equity financed, we use the stockholders’ required return as found through the CAPM for the appropriate value of ‘r’....
1,790 Words | 9 Pages
Report of Between Basic Bank Leading Schemes and Sme Loan.
Background of the study
1.1 Origin of the report
This report is prepared as per internship requirement of my Masters of Business Administration. (MBA ) program of the International Islamic University Chittagong. I worked 2 Months from 1st February to 30th March 2013 in BASIC Bank Limited karonbazer Branch, Dhaka. In two months I have through various banking activities. This report is a brief overview of those daily activities I have done during the internship period.
9,051 Words | 31 Pages
Introduction to Lending Management - 2161 Words
Sheet – 01 & Lecture – 01
Question: Lending Management or lending policy
Answer: Lending Management or lending policy and proud we the main instrument towards achieving mission and vision of a Bank. As mentioned in the memorandum and articles of association of the Bank it is committed to invest in industrial and business enterprises by developing projects of national importance, including the small and medium enterprise (SME) consumer loan, capital market separation, lease financing, trade...
2,161 Words | 10 Pages
Caceres Semilla - 387 Words
Caceres Semilla S.A. de C.v.
Caceres Semilla is a family run limited liability company whose primary business includes selling corn and alfalfa seeds to the farmers and the baled hay, the seed’s output to ranchers and dairy farmers. The company has only two primary buyers, who solely work with contract growers and help in the purchase of the seeds. The company’s USP is its superior quality and it takes pains to ensure the same.
The distribution network covers only 4 provinces and the...
387 Words | 2 Pages
Will Computer Technology Cause Financial Intermediaries to Become Extinct?
Group Assignment 1 GD20503 Financial Markets and Institutions Please select ONE of the following issues for your group assignment. You are required to provide your opinion on the selected issue using relevant reading materials. These materials can be obtained from academic journal articles, research papers, working papers, economic reports, books and media stories. A copy of these materials indicating the source and the date is also to be submitted with the assignment. Issue 1: Will Computer...
513 Words | 2 Pages
Boeing's Strategy - 1495 Words
The Capital Assets Price Model (CAPM), is a model for pricing an individual security or a portfolio. Its basic function is to describe the relationship between risk and expected return, which is often used to estimate a cost of equity (Wikipedia, 2009). It serves as a model for determining the discount rate which is used in calculating net present value. The CAPM says that the expected return of a security or a portfolio equals the rate on a risk-free security plus a risk premium. The formula...
1,495 Words | 4 Pages
Consumer Behavior - Citibank - 886 Words
1) An introduction to the background of the company, the product and its target audience
A) The Company
• Citibank Singapore Ltd
Wholly-owned subsidiary of Citigroup, one of the world's largest financial services organisations.
Offer financial services including deposit accounts, foreign currency deposits and investments, credit cards, mortgages, insurance and charge cards.
Global Consumer Banking division began banking operations in Singapore in 1982.
886 Words | 5 Pages
Credit Risk Management of National Bank Limited, Bangladesh
1.1 Foundation of the Report:
MBA program of University of Dhaka, Department of Accounting and Information Systems is organized and tailored to provide the students with the conceptual, theoretical and practical tools of analyses. Special stresses are given on theory and practice them under an organization. Therefore, as an internee I have completed my practice session and prepared this required report based on investigations carried out by me in National Bank...
8,732 Words | 29 Pages
Rate and Volume Analysis - 682 Words
Rate/Volume Analysis The following table presents the extent to which changes in interest rates and changes in the volume of interest-earning assets and interest-bearing liabilities have affected our interest income and interest expense during the periods indicated. Information is provided in each category with respect to (1) the changes attributable to changes in volume (changes in volume multiplied by prior rate), (2) the changes attributable to changes in rate (changes in rate multiplied by...
682 Words | 2 Pages
techniques study of finance - 2405 Words
Department of Applied Finance and Actuarial Studies
ACST101 : TECHNIQUES AND ELEMENTS OF FINANCE
TECHNIQUES READING FOR WEEK 1
SIMPLE INTEREST & SIMPLE DISCOUNT
INTRODUCTION TO TECHNIQUES
The first half of the lectures develop the basic techniques required to solve financial problems:
- Simple interest and simple discount which are usually only used for transactions of
a short duration.
The price paid for securities purchased in the money market is usually calculated
using a simple...
2,405 Words | 18 Pages
Orgnization - 322 Words
CASE STUDY QUESTIONS:
1. Assess the business impact of credit bureaus’ data quality problems for the credit bureaus, for lenders, for individuals.
Credit Bureaus know that their own systems are responsible for many
credit report errors. Some mistakes accures because of the procedures for
maching loans to individual credit reports.They must continually contend
with claims from customers who falsify lender information or use shady
credit report companies that challenge all the negative...
322 Words | 1 Page
Miss - 3381 Words
Kensington College and Business &
University of Wales
In this article has been investigated about15 sources of
capital finance available to PLCs
Nahid Mohsen Pour
Nahid Mohsen Pour 2
identifying different sources of finance to Plc, advantages and limitations
3,381 Words | 15 Pages
Priority Sector Lending - 2499 Words
PRIORITY SECTOR LENDING
Some areas or fields in a country depending on its economic condition or government interest are prioritized and are called priority sectors i.e. industry, agriculture. These may further be sub divided. Banks are directed by the state bank of the country that loans must be given on reduced interest rates with discounts to promote these fields. Such lending is called priority sector lending.
The different segments of the priority sector are as follows:
2,499 Words | 7 Pages
Michelle Dellatorre Financial Case
Assume that you recently graduated with a degree in finance and have just reported to work as an investment advisor at the brokerage firm of Balik and Kiefer Inc. One of the firm’s clients is Michelle Dellatorre, a professional tennis player who has just come to the United States from Chile. Dellatorre is a highly ranked tennis player who would like to start a company to produce and market apparel that she designs. She also expects to invest substantial amounts of money...
3,374 Words | 12 Pages
Ch 11 Homework P1 3
Chapter 11 Homework
Page 1 of 2
[The following information applies to the questions displayed below.]
Tyrell Co. entered into the following transactions involving short-term liabilities in 2012 and 2013.
Apr. 20 Purchased $36,500 of merchandise on credit from Locust, terms are 1/10, n/30. Tyrell uses
the perpetual inventory system.
May 19 Replaced the April 20 account payable to Locust with a 90-day, $35,000 note bearing 7%
annual interest along with paying $1,500 in cash.
634 Words | 11 Pages
3505 M2 Fall 2014 Soltn
Management of Depository Institutions 3505 Fall 2014
1. A bank is planning to make a loan of $5,000,000 with duration of 7.5 years to “Jumbo Manufacturing”, a young and aggressive firm. The loan rate is 12% and the servicing fee is 50 basis points. The bank estimates that with a probability of 95%, the risk premium on the loan will not increase by more than 4.2%. The average cost of funds for the bank is 10 percent. The bank manager wants to use the RAROC approach to make a...
3,355 Words | 15 Pages
Project on Comparison on Home Loan
“COMPARISON OF HOME LOAN SCHEME OF DIFFERENT BANKS”
20,281 Words | 71 Pages
Extensive use of Credit Cards has Lead Americans to Debt
THESIS (part of paragraph 1): Using a credit card leads most Americans into debt. Be careful making statements about “most” Americans
I. Primary support point 1 (paragraph 2): Reasons to not use credit cards
A. the expansion of credit that let America get into trillions of dollars in consumer debt has been made available by the easy use of credit cards
1. the economic collapse could have been prevented
2. why expand it more?
B. Credit cards increase your risk of...
553 Words | 2 Pages
5357d1212897780 Caja Espana Some Notes Caja Espana
Caja Espana: Managing branches to sell
1. Calculating a profit for Gradefes and Madrid-Barrio branches, by traditional method give us following results:
589 Words | 8 Pages
Introduction to Finance - 2770 Words
(5 points) In a world with no frictions (i.e., taxes, etc.), having debt is always better because it increases the value of the firm/projet.
Your Answer | Score | Explanation |
False | 5.00 | Correct. You understand the irrelevance of financing. |
Total | 5.00/5.00 | |
Question Explanation | | |
Fundamental question about value creation. |
(5) the return of equity is equal to the return on debt of a project/firm
Your Answer | Score | Explanation |
2,770 Words | 9 Pages
Credit Risk Management of Basic Bank
1.1. Origin of the report
As a part of the Internship Program of Bachelors of Business Administration course requirement, I was assigned to do my internship at Bangladesh Small Industries and Commerce Bank Limited popularly known as BASIC Bank Limited for the period of three months starting from December 20, 2006 to March 20, 2007 as an intern by the Internship Placement Committee of Department of Accounting & Information Systems, University of Dhaka. Here at BASIC...
23,422 Words | 91 Pages
Chapter 5: Introduction to Risk, Return, and the
CHAPTER 5: INTRODUCTION TO RISK, RETURN, AND THE
The Fisher equation predicts that the nominal rate will equal the equilibrium
real rate plus the expected inflation rate. Hence, if the inflation rate increases
from 3% to 5% while there is no change in the real rate, then the nominal rate
will increase by 2%. On the other hand, it is possible that an increase in the
expected inflation rate would be accompanied by a change in the real rate of
2,025 Words | 14 Pages
Money and Banking Management - 4034 Words
RISK MANAGEMENT: ASSET-BACKED SECURITIES, LOAN SALES, CREDIT STANDBYS, AND CREDIT DERIVATIVES
Goal of This Chapter: The purpose of this chapter is to learn about some of the newer financial instruments that financial institutions have used in recent years to help reduce the risk exposure of their institutions and, in some cases, to aid in generating new sources of fee income and in raising new funds to make loans and investments.
Key Topics in This Chapter
4,034 Words | 14 Pages
Ski Equipment Inc. Case
I. PROBLEM STATEMENT
Dan Barnes, financial manager of Ski Equipment Inc. (SKI) is anxious that the Company’s founder recently sold his 51% controlling block of stock to Kent Koren, who is a big fan of EVA (Economic Value Added). Koren rewards managers handsomely if they create value, but those whose operations produce negative EVAs are soon looking for work. Koren frequently points out that if a company can generate its current level of sales with fewer assets, it would...
2,016 Words | 7 Pages
Financial Institutions 19 22
19. The balance sheet of A. G. Fredwards, a government security dealer is listed below. Market yields are in parentheses, and amounts are in millions.
a) What is the repricing gap if the planning period is 30 days? 3 months? 2 years?
a. Repricing gap using a 30-day planning period = $150 - $340 = -$190 million.
b. Repricing gap using a 3-month planning period = ($150 + $150) - $340 = -$40 million.
c. Reprising gap using a 2-year planning period = ($150 + $150 + $100 + $50) - $340 = $110...
675 Words | 3 Pages