3 One way in which financing decisions are easier than investment decisions all of these it is more difficult to lose money through foolish financing decisions. it is easier to make a lot of money through smart financing decisions. financial markets are not competitive due to regulations.
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- Finance ethics is important because misconducts and their causes often leave economies with negative after effects. Discuss three (3) misconducts and their causes that justify the need for finance ethics1. Cost of money Everyone uses money, and it is important to understand what factors affect the cost of money. Consider the following scenario: A friend comes to you and asks you to invest in his business instead of investing in Treasury bonds. You think he has a good business model, so you tell him you are willing to invest as long as the expected return on the investment is at least four times the return you would have received on the Treasury bonds. Determine which of these fundamental factors is affecting the cost of money in the scenario described: Risk Inflation Time preferences for consumption15 Mudarabah and Musharakah fall under profit and loss sharing transactions and have other risks related to credit and equity investment. An Islamic bank manager can reduce the impact of the risk through:* A. Set up a strong analysis framework. B. Srictly control and monitor processes. C. Proper evaluation of the project must be done. D. All of the above
- 1. Explain why financial markets are important to the health of economy? 2. In a world without complete information and transaction costs, financial intermediaries would not exist. Is this statement true,false or uncertain? Explain your answer. 3. Explain the flow of funds in the financial system thru direct and indirect financing.11.Explain why a firm needs to understand their allocation of debtfinancing to equity (the amount the owner used to fund thebusiness). Discuss how this allocation can impact their Total DebtRatio. Can having too much debt bring down profit margins? Why orWhy Not?8. Do you think the company would have suffered the same fate if its product had been less popular? Why or why not? From textbook: MBA 640 Finance, Economics and Decision Making, located in chapter 3
- 45. It is one of the prime responsibilities of a finance manager to focus on the principle of __________ while taking investment decision. a. All of the options b. Profitability only c. Safety only d. Liquidity onlyMany businesses finance their investment activities internally. Should internal financing affect the efficiency with which the interest rate performs its functions? No, investment is profitable if the expected rate of return is greater than the rate of interest regardless of the source of funds. Yes, investment is profitable if the expected rate of return is greater than the rate of interest regardless of the source of funds. O No, because internal financing relies on a different profit calculation. Yes, because firms are usually more anxious about what happens to money that they do not have to pay back.A3) Finance 1. What is the most correct implication of the additional funds needs (AFN) ________ If AFN is negative, then you must secure additional financing. If AFN is negative, then you have extra funds to pay off debt. If AFN is positive, then you have extra funds to buy some short-term investments. If AFN is positive, then you have extra funds to repurchase additional new stock.
- 7.For a lending investment project, which of the following is a bad decision rule? If IRR is less than cost of capital: reject If IRR is greater than cost of capital: accept If profitability index is less than O: accept If profitability index is greater than O:accepthi there tutors! im here to cure my doubts. i hv ques to ask. please help solve. investment management Required: What are the 4 differences between the money market and the capital market? state & explain. thats all. thank you tutor!Which of the following statements best describes financial markets? Answer a. Financial markets are a good example of unregulated markets b. Financial markets increase the speed of buying and selling, but they also increase the cost since people are earning fees for these transactions c. Financial markets today offer fewer instruments than they did in the past d. Financial markets lower the cost and increase the speed of buying and selling financial instruments