Describe the characteristics of each of the following trade blocks. Be certain to explain the ways in which they are the same and the ways in which they differ. a. Economic union b. Common market c. Customs union d. Free trade area Solution a. Economic union : It is an union among different countires, where they will accept on common policies and procedures to trade among the countries. B. Common market : it is another type of trade block and it is basic of the all, in common market there would not be much rules and regulations about the import and export between countries and they will share both goods and services among the countries. c.Customs union : It is also group of countries where the member countries will agree on mutual benifit like they will not charge customs fee for mutual exchange. d. Free trade area : In free trade area type the member countries will not charge any duties/fee and the member countries can freely trade, export and import among the member countries which will give more advanced products and services. The above explained trade blocks are similiar in some and different in other means, the overall advantage of these trade blocks is all the member countries will have the option for free trade among other members and import and export will be more easily. By this means countries will earn more income at the same time the customers will also benifited on competitive advantage. Where as due to this trade blocks countries which are not member countries will not allowed to trade with the member countries which will lead to non-protection of customer rights where they will not get access to other foreign country products which are non-members..

1. Describe the Comparable Company Analysis valuation method including advantages and
disadvantages.
Solution
Comparable Company Analysis are relative valuation technique used to value a company by
comparing that company's valuation multiples to those with peers company's. Generally
multiple are ratio of some valuation metric (such as equity market capitalisation or Enterprise
Value) to some financial metric (such as Earnigs/ Earnings per share (EPS), Sales, EBITDA). All
other things being equal, The basic idea is that companies with similiar characteristics should
trade at similiar multiples.Its is relatively easy to perform and data for them is widely available(
If comparable company is publicly traded.) If market is pricing securities of other companies
efficiently, this method shouyl provide a reasonable valuation range, while other valuation
methods such as DCF are dependent upon an entire array of assumptions. Due to this factor this
technique is used widely for valuation. Market Analyst,Investment bankers,sell side reasearch
analysts and private equity investor use them.AdvantagesDisadvantages.Widely available data so
easy to calculate.Infuenced by temporary market conditions or non fundamental factors.Easy to
communicate across variety of market participants.Not useful when there are few or no
comparable compnies.Determines a benchmark value for multiples used in valuation.Difficult to
find appropriate comparable companies for many reasons.Provide useful way to assess market
assumptions of fundamental Characteristics baked into valuations.Less realiable when
comparable compnies arethinly traded.