Clearly explain at least two similarities and at least two differences of financial institutions from financial markets in terms of transferring of funds from lenders to borrowers.
Q: t amount must be deposited in etuity today earning 8% compo ally if the first monthly paymer ade 6…
A: Perpetuity annuity means that it will continue forever. Annuity due means payments are at the…
Q: (1) Determine how much will his daughter be able to withdraw each year starting in year 18 and…
A: In Step 1, calculate the future value of the amount saved from year 0 to 17 or the future value of…
Q: pany is considering the purchase of a new machine to replace an obsolete one. The machine being used…
A: NPV= Present value of cashinflows - Prsent value of cashoutflows.
Q: effective interest rate
A: The effective rate of interest refers to the interest rate which is charged on the amount of the…
Q: For the year ended December 31, 201A Inventories Trade and associated company Short term investment…
A: Current ratio shows the liquidity of the firm and show the position of working capital of the…
Q: what is the payback in this investment, assuming that the savings accrue over the whole year?
A: Payback period refers to the period within which the sum invested by the company in a project will…
Q: When Mary had 5 years left in college, she took out a student loan for $17,512. The loan has an…
A: Here, Loan amount = $17,512 Interest rate = 2.7% To Find: Part A. Monthly payments if the loan is…
Q: ABC Corporation has assets that total $10 million and liabilities that total $2 million. It also has…
A: Book value per share is calculated by deducting all debt, liabilities, and preferred stock from…
Q: Your Dad has offered to give you some money and asks that you choose one of the following two…
A: The present value of future cash flows will be always calculated in order to compare the…
Q: The company sells on terms 2/10, net 30. Total sales for the year are P1,000,000, of which P100,000…
A: Receivables will include all sales being made on credit net of discount. It can be seen that some…
Q: With regard to hedging and forecasting, a Eurozone firm is expecting a receivable of $1 million in…
A: Exchange rate facilitates to convert one currency into another.
Q: The following table shows information about return of stock and bond. Suppose that your Portfolio…
A:
Q: Noel's Auto Repair Shop paid P3,586.20 invoice dated November 12,2014 on December 10 of the same…
A: Given: Invoice = P3,586.20 Invoice date = November 12,2014 Paid on = December 10, 2014 Stated…
Q: pays a 9.75% nominal rate on deposits, with monthly compounding. What effective annual rate (EFF%)…
A: The effective annual rate can be computed as follows :- EAR = (1+i / x)^x - 1 = (1 + 0.0975/12)^12…
Q: Consider the valuation of a share of common stock that paid a $2 dividend at the end of last year…
A: Dividend discount model refers to a stock valuation model which is used by the company for…
Q: California Resource Corporation has a bond outstanding with a coupon interest rate of 6 percent that…
A: Present value/ price of a bond In case of a bond, a series of equal payment of coupon is made at…
Q: Bank ZLX is marketing their new fund by noting that a fixed $320 monthly deposit in their fund…
A: Future value of annuity Annuity is a series of equal fixed payment at equal interval over the…
Q: 9.7. You are to calculate rates effective for the year beginning Jan. 1, 2020 for one-year policies…
A: The amount of money an insurer is obligated to pay to cover claims, including the costs of…
Q: (CAPM and expected returns) a. Given the following holding-period returns, LOADING... Month…
A:
Q: The US inflation rate is steady at 6.1%. If John expects an amount of USD 200,000.00 for his…
A: Purchasing power is value of money today considering the impact of inflation today.
Q: an organization has a loaned BD 820,000 to buy the needed machines. The loan holds an interest rate…
A: Annual payment: Fixed regular Payment made annually for loans for the entire cycle of the loan is…
Q: You make single investment of $500 in mutual fund earning 8% annual interest which is compounded…
A: Future Value: It is the worth of an investment or resource on a particular date from here on out,…
Q: Automotive Supplies Inc’s Stock trades at $50 a share. The company is contemplating a 4-for-3 stock…
A: Solution:- Stock split means when a company splits shares of itself. The overall wealth of shares…
Q: 6. You bought 100 shares of stock at $25 each. At the end of year 1 you received $300 in dividends…
A: Annual rate of return is calculated with the help of following formula Annual Return = Dividend +…
Q: A) It is now January. The current interest rate is 5% per annum annual compounding. The June future…
A: Since you have posted a question with multiple subparts, we will solve the first one for you. If you…
Q: 35. What is the amount of the annuity at the end of 10 years?
A: Future value of the Annuity: It is estimated by the product of the present stream of cash flows and…
Q: what are the causes and concern of shadow bank. please answer in detail
A: Shadow bank is also referred to as non-bank financial intermediation which performs bank like…
Q: How much more money must you deposit today than your sister did if you are to have the same amount…
A: Present Value: It is computed by the product of the present value factor and the future value. It…
Q: You are purchasing a new car for $27,600. The dealership offers you three options: • 0% financing: 0…
A: Car Price = $27,600 Time Period(Months) = 48 Interest Rate = 0% Down Payment = $0
Q: RiskMetric model. What are the major disadvantages? How can the major disadvantages be addressed?
A: The RiskMetrics VaR calculation approach assumes that the returns on a portfolio or any asset follow…
Q: A company produces 4 different products. Table 1 shows the selling price, production cost, and…
A: Return and risk are two basic elements of every project. Return means possibility to earn…
Q: Global Satellite Network company are increasing its booster thrust power to win more mini satellite…
A: Cash Flow Diagram: Pay and costs are addressed visually throughout some time span under cash Flow…
Q: A regular monthly perpetuity starts with a $925 payment next month, and grows at a rate of 3.72% APR…
A: Given: Monthly payment = $925 Growth rate = 3.72% Discount rate = 7.8%
Q: The Joshi Fish Farm (JFF), a saltwater aquarium company, is planning to expand its operations. It…
A: We have to compute the future value of the investment made each year after the end of 5th year.…
Q: 10. Mary Canfield purchased the All-Canadian Compound bond fund. While this fund doesn't charge a…
A: Contingent deferred sales load (CDSL) refers to a load or sales charge which is charged on the…
Q: ed $250 000 in his RRSP. Determine the monthly deposits he should make into his RRSP if the rate…
A: There is need of proper planning for retirement and timely need of planning for retirement and if…
Q: Markov Manufacturing recently spent $15 million to purchase some equipment used in the manufacture…
A: "Hi, Thanks for the Question. Since you asked multiple sub parts question, we will answer first…
Q: PLEASE SKIP IF YOU ALREADY ANSWERED. I WILL UPVOTE
A: The question is related to Ratio Analysis. 1. Current Ratio is calculated by dividing Current Assets…
Q: 3. Beverly and Kyle Nelson currently insure their cars with separate companies paying $450 and $375…
A: In case both the cars are insured with the same insurer, there will be a savings of 10% on the…
Q: (a) Draw a cash-flow diagram for this situation
A: A cash flow diagram consists of series of cash inflows and cash outflows expressed over a period of…
Q: All borrow from a local bank, charge k $ 8000 per year, how many years will it take to pay off the…
A: The loans are paid by annual payment and these carry the payment of interest and payment of…
Q: Twenty years ago, you invested 16,612.70. If you earned a compound annual rate of return of 6.30%,…
A: Present value of money show the equivalent amount of money today considering the interest rate and…
Q: Find the WACC
A: WACC: It represents the firm's average cost of capital. It can be estimated by the sum of the…
Q: equivalent cash price if
A: Equivalent cash price refers to the amount of the down payment plus the amount of the future…
Q: You are putting together a portfolio made up of four different stocks. However, you are…
A: Asset Beta First Portfolio Second Portfolio A 2.5 10% 40% B 1 10% 40% C 0.5 40% 10% D -1.5…
Q: Blowfast Corporation, a U.S. exporter, sold wind turbines to a Mexican customer at a price of…
A: Foreign Exchange loss/gain: Foreign Exchange loss /gain is the result due to currency…
Q: Describe the traditional banking services provided by financial institutions.
A: Banking is usually a kind of business activity which is done for the safeguarding other people's…
Q: different investment alternatives. Some of these options include: A ) Stock B ) Mutual Funds C)…
A: Stocks - stocks may provide huge upside potential of the investment but the return is not fixed and…
Q: You purchased a bond with an invoice price of $3540. The bond has a coupone rate of 5.4%, a face…
A: Given, The invoice price is $3540 Coupon rate is 5.4%
Q: A new production system for a factory is to be purchased and installed for $175,812. This system…
A: Equivalent annual worth The annual cost of owning and sustaining an asset is determined by dividing…
Step by step
Solved in 2 steps
- Discuss with examples why the money markets could be considered arguable as playing complementary roles with the banking and insurance institutions.Illustrate with a diagram the flow of funds from lenders to borrowers in a financial system. Diagram must include: Savers Borrowers Financial markets Function of the financial intermediaries Function of the financial markets Direct finance Indirect financeWhich of the following is the function of the financial market ? Select one : a . It decides the interest rate b . It makes loan available c . It channels funds from lenders - savers to borrowers - spenders D. None of these
- I. Discuss the different components of the Financial System and its importance. II. What is the difference between Direct and Indirect Financing?Which of the following is not a main core function of the financial system?a. Provide a payments system for the exchange of goods and services.b. Provide mechanisms to separate funds for smaller-scale investmentc. Provide the channels to transfer funds and economic resources across industriesd. Provide ways to manage uncertainty and mitigate risk According to the market segmentation theory of the term structure,a. the interest rate for bonds of one maturity is determined by the supply and demand for bonds of that maturity.b. bonds of one maturity are not substitutes for bonds of other maturities; therefore, interest rates on bonds of different maturities do not move together over time.c. investors' strong preference for short-term relative to long-term bonds explains why yield curves typically slope downward.d. only A and B of the above. Costs associated with the correspondent bank process include:a. Interestb. Currency conversion spreadc. Reputation costsd. Payroll costsEvaluate and summarize some monetary policies which will affect a particular type of financial market/institution.
- Describe the nature of the basic services of financial institutions. What are the channels through which the financial system matches savers and borrowers.? What is a financial intermediary?If there is no asymmetric information problem from the perspective of lenders and borrowers, is the role of financial institutions still needed in the financial market? (Hint: should lenders use direct finance?)Discuss the important of financial market, then illustrate with a diagram the flowof funds from lenders to borrowers in a financial system.
- Explain the roll of debt and equity markets in the economy. How do they interact with both Primary and Secondary Markets? What roles do debt and equity markets and primary and secondary markets play in the “flow of funds?”Which of the following acts as an intermediary between the savers and investors by mobilising funds between them? a.Financial Markets b.Households c.Financial Instruments d.GovernmentWhich of the following acts as an intermediary between the savers and investors' by mobilizing funds between them? a. Financial Markets b. Households c. Financial Instruments d. Government
