Accounting Finance Questions

2. Compare and contrast the nature of cash flows stemming from an investment in stock with those coming from bonds.

Our approach is an active security selection with passive asset allocation. We invest heavily in common stocks, but vary our holdings to include companies of all sizes and industry groups. We seek to achieve sufficient diversification by abstaining from investing more than 5% of the total assets in a single security unless it has significant upside potential, and we make an exception for ETFs and index funds as they represent a basket of securities. Our main goal is to identify and invest in common stocks with high potential for both short- and long-term capital appreciation. Our secondary goal is to invest in common stocks with steady income. When potential for rewards are high, we also enter into derivative

Index Funds-Index funds are generally passively managed funds designed to closely match their corresponding index. Index funds do not allow their fund manager the latitude of selecting or become overweight a particular stock or sector within the fund. It is their job to match the corresponding index The only time a mutual fund would sell a stock in a passively managed fun is if the corresponding was reconfigured. For example, when Microsoft was added to the S&P 500 Index, those mutual funds who mirrored the S&P 500 Index, were forced to purchase Microsoft so they would stay in lock step. Index mutual funds have three distinct advantages over actively managed funds.

An index fund is a conservative investment choice that generally outperforms active funds. Find out the answer to, “What is Vanguard 500?” There are many different ways to invest and turn a profit, but few people have time for day trading. When it comes to active investing and passive investing, most passive investing funds outperform their active peers once fees and commissions are accounted for. To get started on your investing journey, learn more about “What is Vanguard 500?”

1. What are the advantages and disadvantages of going public? Discuss the IPO process. The Advantages of Going Public  Financial Benefit The financial benefit in the form of raising capital is the most distinct advantage of going public. Capital can be used to fund research and development, fund capital expenditure or even used to pay off existing debt. Moreover, once the company is public, it has access to a new and liquid source of capital for any future needs it may have.  Increased Public Awareness As IPOs often generate publicity by making a company’s products known to a new group of potential customers, it created

a.) How can you change the name and convert the status of a company from a Private to a Public company?

1.4 Do the financial statements include: a. b. c. balance sheet; an income statement; a statement showing either: i) ii) all changes in equity; or changes in equity other than those arising from capital transactions with equity holders acting in their capacity as equity holders

The ‘smart beta’ approach should be more accurately described as ‘strategic beta’ as it aims on improving the flaws of passive index based approaches. It has become an umbrella term for alternative weighting and factor based investing. In essence you take an active approach to choosing the rules to base your fund. But once set, the rules passively

The business entity is a limited liability company, and this is important especially when it

This report is going to examine and analyze whether the chosen portfolio with actively picking method was outperformed when comparing with the FTSE 100. The chosen portfolio was constructed and traded in over 3-month period.

2. Identify two advantages of a private placement of shares as compared with a public issue. (1 mark)

speaking, not true. In particular, it was assumed that the market is in the state of equilibrium (i.e. all investors have finished to complete their portfolios), operational and transaction costs (payment of intermediaries’ services, staff, information services, taxes, etc.) are insignificant, the investor has the ability to receive and grant loans on the same risk-free rate, and so on. Nevertheless, the idea that the market portfolio is probably close to an effective portfolio, initiated a passive portfolio management. This strategy means that when the investor prepares the portfolio, determining the expected return, he is focused entirely on the market portfolio and he doesn’t carry on to make any changes in the composition of the portfolio after its formation. Hence is the name. The philosophy of passive management is to minimize the costs of market research and the formation of the portfolio if there is sufficient guarantee of obtaining a stable high yield. In fact, an investor, preparing the portfolio, is focused on some reference portfolio (benchmark portfolio), i.e. portfolio with standard yield in comparison with the actual yield of the portfolio manager. This is not necessarily to consider as a reference only the market portfolio. There are dozens of different investment funds, called "index" funds, which focus on the benchmark portfolio, consisting of securities, selected for a particular trait (eg: a part of any index). So, there are index funds holding

Discuss the general features, differences, advantages and disadvantages of active and passive portfolio strategies and their link with the theory of efficient capital markets.

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Our target customers will particularly be the small and medium investors who are unable to avail such services as most of the financial and advisory firms mostly deal with the big ticket investors and thus the small investors have no choice but to invest their assets in passive funds in investment management companies or mutual funds companies which are subjected to index and fund manager’s performance and thus may not bring expected returns. However recent evidence of systematic departures of asset prices in the from equilibrium values, as envisaged under the market efficiency, has renewed interest in ‘active’ fund management and investment advisory services and which entails that optimal selection of stocks, and the timing of