How the Fall of Lehman Brothers Impacted the 2008 Financial Crisis

Financial Statements And Evaluating A Corporation Essay
Using Financial Statements to evaluate a corporation The basic financial statements are the primary means for providing information of the company
and are prepared from the balances of the accounting records of the company at a given date. Classification and summary of accounting data are
properly structured financial statements. These are Income Statement, Accounting Profit, Economic Profit, and Balance sheet. The main objectives of
financial statements are to help managers of an organization to determine whether decisions about funding were most appropriate, and thus determine
the future of investments. Understand the elements that can be used to compare financial ratios and different analysis techniques that can be applied
within a company. Describe some of the measures that should be considered for decision–making and alternative solutions to the various problems
affecting the company, and help planning the direction of investments made by the organization. Using the most common reasons to analyze liquidity
and activity of a company. Analyze the relationship between debt and financial leverage presenting the financial statements. Assess profitability.
Determine the position held by the company in the competitive market in which it operates. Provide employees with enough information they need to
keep them informed about the situation under which the company works. Financial statements are very useful to compare the current status of different
companies in the market. By
... Get more on HelpWriting.net ...

Examples Of Parity Theory
Interest Rate Parity Theory
In the present global financial context, it is difficult for someone to give any idea of what is really happening without figures and indicators of
financial globalization. Among those indicators is the interest parity theory. John Maynard Keynes made the IRP theory popular in the writing of his
article 'Tract on Monetary Reforms' (1923). This parity theory plays an important role in many macroeconomic models, being used as a benchmark for
perfect capital mobility between markets.
According to the interest rate parity theory, there is no bargain of interest. In other words, what is gained in the interest rate differential is in lost in the
exchange rate. The exchange rate moves to effectively bring about the interest rate ... Show more content on Helpwriting.net ...
This implies the equality of returns on comparable financial assets denominated in different currencies. Covered interest arbitrage is the underlying
mechanism for this theory. It refers to the transfer of liquid funds from one monetary center to another in order to take advantage of higher rates of
return or interest while covering the transaction with a forward currency hedge.
The following are the assumptions of the Covered Interest Rate Parity.
1.There is no official hindrance to arbitrage across countries, that is, there is free capital mobility.
2.No transaction cost is included.
3.There is no default risk which means financial investment is safe against business defaults, country risks, etc.
The covered interest rate parity theory can be derived as follows:
Consider a world with two currencies, the USD ($) and the GBP (ВЈ), one–period interest rates in the two currencies given by i($,1) and i(ВЈ,1) and
spot and one–period forward rates in $/ВЈ defined by St and Ft,1

Financial Crisis By Mainstream And Heterodox Economists
The occurrence of financial crises following financial reforms is attributed by mainstream economists to economic reforms being incomplete or to their
incorrect sequencing. Briefly explain this argument. Focus your briefing note on the reasons advanced particularly by heterodox economists to criticize
this argument. The purpose of this note is to briefly examine the different approaches in interpreting the financial crisis by mainstream and heterodox
economists. To emphasize the drawbacks in the neoclassical (mainstream) view, and criticize it from the post–Keynesian (major heterodox) viewpoint.
The latest financial crisis of 2008 and 2009 will definitely become a cornerstone in the history of economic though and, correspondingly, the
development of capitalistic system. It is a turning point as the neoclassical (mainstream) theory that has seemingly been a driver of the late 30 years of
development lacks the ability to comprehensively explain the causes of frequent economic downturns, and provide policy implications for preventing
crisis from occurring again and again. However, the masterminds of the neoclassical school have suggested some reasonable arguments in favor of free
markets, liberalized interest rates, trade, foreign direct investments, privatization, deregulation, and property rights summarized in the list of 10 reforms
(John Williamson, 2004) and called for more financial liberalization policies. While the financial markets are liberalized and the real

Ghan A Global Village, Every Country Has Its Own Currency
1.0 INTRODUCTION
1.1 Background Study
Though the world now is a global village, every country has its own currency. In Ghana the currency used is the Ghanaian cedi. There are several
Ghana cedi exchange rates but the GHS to USD rate is the most sought–after. The currency symbol and code for the cedi are GHC and GHS
respectively. The faring of the exchange rate has a great influence on economic growth and businesses in the country. Over the previous couple of
decades, various specialists and academicians have expressed that the exchange rate is essential not just in light of the fact that it encourages
worldwide exchange, however it likewise impacts asset portion in different divisions of the economy. Aron, Elbadawi, and Kahn, (2002)... Show more
content on Helpwriting.net ...
However, the Ghanaian cedi (GHS) reinforced to some degree against the U.S. dollar in 2015. On 5 October, the currency was exchanged at 3.71
GHS per USD. The cedi reinforced impressively after the nation finished up the offer of a USD 1.0 billion Eurobond. The Ghana Cedi, which was
initially settled in 1965, has been experiencing thrill ride periods, performing unequivocally against significant exchanging monetary standards at a few
focuses while slipping in worth amid other periods. In late circumstances, the Ghana cedi has been slipping in esteem. One of the advantages of money
related progression and developing of the monetary area is the narrowing of the interest rate spread. The imperative point deserving of note is that
interest of whatever kind should in any event safeguard the worth of money after some time. The worth of money normally decreases with time thus of
various components, vital among which is the inflation rate. The fundamental purpose of banking is to serve as a financial intermediation from surplus
units of an economy and loaning to shortfall units of an economy. At the point when banks take deposits from clients, they pay interest on these
deposits to guarantee that the deposits don 't lose worth over the period that the money is kept with the bank. The interest on deposits is named
borrowing rate in acknowledgment of the fact that deposits are perpetually a method for the bank borrowing from people in

Should Interest Rates Be Low Today?
7.2 million boomerang buyers are renting homes because they don't feel they are qualified to own homes of their own. They otherwise have good
credit history and can purchase through these available options. Rent with Option to Buy With a "rent with option to buy" situation, the gap in time
between setting up the contract and actually buying the house, it appears based on research that lenders fear that their buyer will be locked into a
condition that may not suit them in the future. Interest rates may be low today but locking into the current rate could keep them from benefiting from
an even lower rate in the future, or they could lose the money they set aside if they do not follow through on their contract to buy. One would think that
the buyer could lock into a current market purchase price with this option but to the contrary, it seems that the owner wins on this detail as well,
because the two parties guestimate as to the potential price the house would have 2–3 years from the forming of the contract, so I don't see the purpose
of this option as far as making it a win situation for the buyer. Many "rent with option to buy" are between owner and renter, but it is wise to bring in
the lender and get advice on the contract so that it includes details such as home repairs, improvements, holding the money, how much the rent is and
what the amount extra will be going towards the earnest money deposit, down payment and closing costs. Locking on price can end up giving one or

Lehman Lynch's The Federal National Mortgage Association
1st April 2008, Bear Stearns is acquired by JP Morgan Chase. September 7th 2008 the Federal National Mortgage Association, "Fannie Mae" and the
Federal Home Loan Mortgage Corporation, "Freddie Mac" are acquired by the United States Federal Housing Finance Agency. September 14th 2008,
Merrill Lynch is acquired by Bank of America. September 16th 2008, American International Group is acquired by the United States Federal
Government. September 17th 2008, Lehman Brothers is acquired by Barclays. September 26th 2008, Washington Mutual is acquired by JP Morgan
Chase. In a period of six months, seven of the most dominant financial institutions in the country crashed. Seven Goliaths were downed by stone shots
right to the sweet spot but there were no Davids in this story, these were all self–inflicted wounds. Deep wounds that affected the nation as a whole,
wounds that cut so deep that they crushed the American Dream for some with each passing day. In this essay I aim to address the decisions that led to
the demise of these behemoths and the worst economic downturn since the infamous Great Depression of the early 20th century.
The 1930s, the period of the Great Depression is perhaps the most unstable financial time in United States history. The decade where more than 40
percent of nation's banks disappeared crippled the economy for years and caused the Senate to pass the Glass–Steagall Act (part of the U.S. Banking
Act of 1933). The main purpose of the legislation was to separate

The Effects Of War On The Economy
Answer 1 – From the text and research I have learned that war will stimulate the economy in the short term but will hurt in the long term since
something will have to fund the war efforts and expenditures. War can be funded by increasing taxes, decreasing spending in other programs and
Increasing the national debt. In recent times the war spending comes from increasing the national debt. This increased debt results in a higher
debt–to–GDP ratio and higher interest rates. Government when it is too large hinders the growth of the private sector since the cost of the government
exceeds its benefits. U.S. evidence from 1929–1986, an article in Public Choice estimated: "This analysis validates the classical supply–side paradigm
and shows that maximum productivity growth occurs when government expenditures represent about 20% of GDP."1 A National Bureau of
Economic Research paper stated: "A reduction by one percentage point in the ratio of primary spending over GDP leads to an increase in
investment by 0.16 percentage points of GDP on impact, and a cumulative increase by 0.50 after two years and 0.80 percentage points of GDP after
five years. The effect is particularly strong when the spending cut falls on government wages: in response to a cut in the public wage bill by 1
percent of GDP, the figures above become 0.51, 1.83 and 2.77 per cent respectively." 2
Answer 2 – I believe a wise combination of fiscal and monetary policy can have a positive effect on inflation and

Indian Pre-Liberalization Monetary Policies
There was not much scope for monetary policy making in the RBI during the period 1935–51. At this time monetary expansion was restrained
reflecting low levels of economic activity, with a pegged foreign exchange rate presenting a major challenge to monetary management. In the war and
post–war years, the focus of monetary policy shifted to managing inflation and through providing interest rate signals by controlling yields on
Government paper, as the Bank Rate remained fixed after a one–time reduction from 3.5 per cent to 3.0 per cent in 1935.
Post–independence, with the start of the planning process, monetary policy had to manage both short–term pressures and look after the government
financing requirements for building the Indian economy. RBI initiated All–India Rural Credit Survey for promoting agricultural credit institutions and
expanding institutional credit to agriculture in rural India. The State Bank of India was established from the Imperial Bank of India (1955), and its
expansion helped RBI to get more involved in developing the cooperative movement and meeting its financial requirements.RBI institutionalised credit
to industry from the 1960s.
Monetary planning was strictly constrained by heavily regulated rule consisting of priority sector lending, administered interest rates,refinance to the
banks at concessional rates to enable them to lend at cheaper rates topriority sectors, high level of deficit financing, external oil price shocks, etc. In
September 1964

Alan Greenspan's Term Essay
The article, "Greenspan gets another Fed term," in the New York Times discussed Alan Greenspan's success and failures during his term.
The article was fairly easy reading. I found some statements to be quite amusing however, there were some issues discussed that was a little ambiguous.
Reading this article, I learned that President Clinton nominated Alan Greenspan to a fourth term as chairman of the nation's central bank. I had no clue
as to what the title of chairman of the nation's central bank did. However, after reading this article, I had some ideas as to what role chairman of the
nation's central bank plays. Alan Greenspan makes decisions in the S & P, NASDAQ, and DOW Jones markets. Alan Greenspan also approves...
Show more content on Helpwriting.net ...
Although he is adored at the moment, all of his fine work could be forgotten if he is unable to walk the tightrope of maintaining economic growth
while keeping inflation low," sounds very threatening. It sounds like Greenspan better not screw up or else all his success, hard work, and
accomplishments will be well forgotten. In a sense, it is true. Once Alan Greenspan makes a wrong turn, all hell will break loose and no–one will give
him the benefit of the doubt. I found this statement real amusing.
"Clearly, the economy is strong and the financial markets have been exceedingly robust. But the pace that both the economy and the market are
moving in are not sustainable long–term," is another statement I found quite amusing, but at the same time a little troubling. My question is, does
this statement boil down to the clichГ©, "too much of a good thing is too good to be true."? The economy and financial markets are at the
best it has ever been, which means a downfall is somewhere in the future.
One paragraph mentioned that the Fed is "expected to raise the bench mark federal funds rate, currently at 5.5%, by one quarter of one
percentage point in what would be its fourth interest rate increase since June 1999." I was really confused with the content of this statement. I
found the wording really hard to comprehend. Finally, I figured out that what this statement was really trying to say is

Sources of Finance
Introduction
In this essay we will be looking at different sources of finance available for different type of business. Also will be looking at the definitions of
different type of sources of finance, the advantages, disadvantages and also giving reasons to why different sources of finance was chosen for the
given case studies.
Types of sources of finance
Bank Loan – is a long term loan and will often be for large amount of money for starting up a business or to expanding. Business will agree with the
bank to pay installment monthly fees with interest charge.
Long term Loan – is a loan which is often being for a large sum of money and usually the payment period is more than 15 years. Usually is used for
starting up new business, ... Show more content on Helpwriting.net ...
The estimated cost of the facility is ВЈ4.5 million. A long term bank loan will be suitable to for a large company planning to move as the estimated
cost is ВЈ4.5 million and share issue will also be ideal as this can raise capital that can be used for the move, this is a long term source of finance.
Shareholders will have to share the control of business, each share gives the shareholder a vote on the direction of the company and will spread the
risk to the number of shareholders, and this will also reduce the amount of loan to borrow from the bank which will also result to fewer installments
and less interest to pay.
Case 4:
A rugby club is anticipating turning fully professional after the team secured promotion to the Zurich premiership. To take this place in league, the
league committees have insisted that it also improves facilities at the ground. It has been estimated that the cost of these two measures will be
ВЈ500,000.
The best way to inject a source of finance in a rugby club is through finding a sponsor. A sponsor will bring money into the club and raise fund to
enable the club to improve its facilities.
Advantages of having a sponsor:
The marketer can reach different target of audiences
The sponsors' logo could appear on the shirts of the players, logo on the playing field etc.
This gives different advertising that will encourage and promote increase in participation

What Went Wrong with Libor Rate
s
[pic]
GROUP #:5
MEMBERS #:47713, 00000, 00000, 00000, 00000
PROGRAM: MBA29
COURSE: FINANCE IN INTERNATIONAL MARKETS
INSTRUCTOR: PROF. LUC KEULENEER
GROUP PAPER: WHAT WENT WRONG WITH LIBOR RATES?
"Honesty is a very expensive gift. Do not expect it from cheap people" Warren Buffet
Table of Contents
Introduction2
History2
Origen of the crisis3
Probable Reasons for the LIBOR manipulation5

Main players involved in the LIBOR scheme6
Recommendations on what to do to avoid this problem6
Reference List8
What when wrong with LIBOR rates? ... Show more content on Helpwriting.net ...
Barkley replied that its situation was strong and that it believes that were the other banks the ones that were quoting lower than effective interbank
borrowing cost rates (Kregel 2012. p. 2–4).
The main victim of this manipulation would have been the competitiveness in the financial markets; as this scheme would unfavorably influence the
efficient distribution of capitals and cause distortion of prices, i.e. the mortgage prices would decreased and therefore the amount of houses sold would
increase dramatically as well as related assets; such as: furniture, construction materials, etc. while depressing others. The (Abrantes–Merz, Kraten, D.
Metz, and Seow, 2012. p. 138). The free market principles were breached and the impact was staggering as the Libor is the main benchmark for
short–term Interest rates, a negligible distortion on LIBOR would lead to huge capital transference from lenders to borrowers in an immoral way
(Abrantes–Merz, Kraten, D. Metz, and Seow, 2012. p. 1).
Maybe the very same process to estimate the LIBOR rate propitiated the manipulation scheme. The BBA select 16 banks that submit quotes based on
their effective funding costs. This open the possibility that even 5 of the 16 banks could collude to influence the LIBOR rates. The type of banks
selected could also be a factor to try to influence the LIBOR, i. e. If they are lenders, they would be benefited from higher IBOR rates; on the other
hand, if borrowers they would welcome

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 umich
Introduction to Finance by Gautam Kaul Course Home Page Side Navigation Bar
Home
Course Syllabus
Course Schedule
Documents
Assignments (selected)
Video Lectures
Discussion Forums
Frequently Asked Questions
Coursera Student Support Center
Course Wiki
Join a Meetup Help Articles
Assignment 9
The due date for this quiz is Mon 16 Sep 2013 6:30 PM IST (UTC +0530).
Please read all questions ... Show more content on Helpwriting.net ...
Alpha, Inc., has debt that is viewed by the market as risk–less with a market value of $500 million. Beta, Inc., has no debt. Both firms are expected to
generate cash flows of $100 million per year for the foreseeable future and the market value of the equity of Beta, Inc is $1 billion. Estimate the return
on equity of Alpha, Inc. Assume there are no taxes, and the risk–free rate is 5%. (No more than two decimals in the percentage interest rate, but do not
enter the % sign.)
Answer for Question 7
Question 8

(10 points) Mango, Inc. has had debt with market value of $1 million that has paid a 6% coupon and has had an expiration date that is far, far away.
The expected annual earnings before interest and taxes for the firm are $2 million and the firm has not grown, nor does it have plans for any growth.
The firm however has just raised more equity to retire all its debt. If the required rate of return to equity–holders (after the capital structure change) is
now 20%, what is the market value of the firm? Assume there are no taxes. (Enter just the number without the $ sign or a comma; round to the nearest
whole dollar.)
Answer for Question 8
Question 9
(15 points) Suppose all investors are risk–averse and hold diversified portfolios. You are evaluating a new drug company that is going to have two
divisions: an R&D unit and a Sales unit. Your CEO and you are arguing about whether the two units should have the same cost

"Manufactured Homes" Case
16–02–2013Study year 2012–2013
Prof. Dr. Brendan O'DwyerSemester 2, Blok 1
Financial Statement AnalysisAnahita Farokhi 6041949
Case 3: "Manufactured Homes" (MANH)
Question 1
Manufactured Homes is engaged principally in the retail sale of new and used manufactured single–family homes and targets individuals in the low
income category. Manufactured Homes focuses on the lower end of the market, according to the company this has two advantages: 1. Since its
customers were seeking to fulfil an essential housing need, its customers were less affected by changes in general economic conditions. 2.
Repossession rates were significantly lower than those of the industry, since its customers were likely to work very hard ... Show more content on
Helpwriting.net ...
It says the following: 1. that Manufactured Homes recognizes sales when payment is received or, in the case of credit sales, when a down payment
(generally 10% of the sales price) is received and the company and the customer enter into an instalment contract. 2. the majority of instalment contracts
is sold with recourse to unrelated financial institutions at an agreed upon rate which is below the contractual interest rate of the instalment contract 3. at
the time of sale, Manufactured Homes receives immediately payment for the stated principal amount of the instalment contract and a portion of the
finance participation resulting from the interest rate differential 4. the remainder of the interest rate differential is retained by the financial institution
as security against credit losses and is paid to Manufactured Homes in proportion to customer payments received by the financial institution 5.
Manufactured Homes accounts for these transactions as sales in accordance with Statement of Financial Accounting Standards No. 77, "Reporting by
Transferors for Transfers of Receivables with Recourse", and recognizes finance participation income equal to the difference between the contractual
interest rates of the instalment contracts and the agreed upon rates to the financial institutions; the portion retained by the financial institutions is
discounted for estimated time of collection and carried at its

Low Interest Rate Long Term Effect
Low Interest Rates Long Term Effect
"The prolonged low–interest rate environment is transforming the banking industry from savings and loans to service and loans," said Dan Geller,
executive vice president of research firm Market Rates Insight in San Anselmo, Calif. (Fitzpatrick) Consumers may think that the continued low interest
rates are a profound thing, but banks on the other hand think much differently. Consumers are refinancing their houses at rates as low as 2.875%, while
big banks like Hudson City Bancorp Inc., a mortgage lender, are being forced to sell themselves to M&T Bank Corp. These super low interest rates
are complicating the industry's journey to a recovery from the financial crisis. In the article" Low Rates Pummel ... Show more content on
Helpwriting.net ...
As we learned in the book, the negative inflation causes an increase in the demand for bonds, because of the decrease in expected return on real assets.
This in turn caused the demand curve to shift to the right. The negative inflation also raised the real interest rate, thereby causing the supply of bonds to
adjust, moving the supply curve to the left. In the end this led to an increase in the bond price and a decrease of interest rates. In the book it explains
to us that the interest rate is negatively related to the bond price. In other words, when the equilibrium bond price rises, the equilibrium interest rate
falls and vise–versa. There are other factors which led to the down fall of interest rates in the Japanese market. For example, the lack of profitable
investments opportunities in Japan, and the business cycle contraction and the decrease of wealth during the business cycle contractions. These all
would lead to the increase in bond price and the decrease of interest rates. This application shows us that low interest rates are not a good thing. In
Japan's case, the low and negative interest rates were a sign that their economy was in trouble with falling prices and a contracting economy. The
interest will only rise back to normal levels when their economy returns back to a better economy. Fitzpatrick goes on to explain that because of the
low interest rates banks will have to consider new ways to make money like Hudson City

Solutions To Assignment TVM Practice Q
1. James plans to fund his individual retirement account, beginning today, with 20 annual deposits of $2,000, which he will continue for the next 20
years. If he can earn an annual compound rate of 8 percent on his deposits, the amount in the account upon retirement will be 98845.84(since it is a
retirement plan so, assumed to be annuity due) correct 91,523.93 – ordinary annuity in this accumulation phase. 2. $100 is received at the beginning of
year 1, $200 is received at the beginning of year 2, and $300 is received at the beginning of year 3. If these cash flows are deposited at 12 percent, their
combined future value at the end of year 3 is __727.37____. 3. Marla borrows $4,500 at 12 percent annually compounded interest... Show more content
on Helpwriting.net ...
How large an equal annual endвЂ‘ofвЂ‘year deposit must be made into an account paying an annual rate of interest of 13 percent in order to buy the
beach house upon retirement? (Time/Marks 3) ANSWER: Value of the house at retirement = FV20 = Rs.92,86,541.97; Annual Saving = Annuity
ordinary = Rs.1,14,723.97. Q 5. An oil well presently produces 50,000 barrels per year. It will last for 15 years more, but the production will fall by 5%
p.a. Oil prices are expected to increase by 3% p.a. Currently the price of oil is $50 per barrel. What is the present value of the well's production if the
discount rate is 10% p.a. effective. (Time/Marks 5) ANSWER: 1 + Adjusted interest rate = 1+i = 1.10 /(0.95*1.03) = 1.124169647 => Adjusted interest
rate = i = 0. 124169647; So the given cash flow stream (a growing annuity) is equivalent to a level annuity of Rs.25 lakh for 15 years @ an adjusted
interest rate of i = 0. 124169647 => So the PVOA15 = (50,0000 x 50) x PVIFOA12.417%,15yrs = $25,00,0000 x 6.661923 = $166,54,807/–. Q. 4.
Ellen is 35 and decides to plan seriously for her retirement. She wants to save Rs.10,000 in the 1st year, i,e., starting @ age 36. However, she expects
her salary to increase each year so that she will be able to increase her savings by 5% per year from 2nd year onwards. With this plan, she expects to
earn 10% per year on her savings.

The Health Of The Current U.s. Economy
Situation:
The health of the current U.S. economy appears to be growing gradually. The second quarter real GDP growth was 3.7% and the unemployment rate
declined to 5.3%. The U.S Federal Reserve (Fed) is expected to raise interest rates in the near future when it sees clear signs of strong economic
growth and improvements in the job market.
The last time the Fed raised interest rates (to 5.25%) was in 2006. This move was soon reversed as the 8 trillion dollar housing market bust sparked
the global financial crises. About 8.7 million jobs (about 6%) were lost, unemployment rose to about 10% nationally leaving many households with less
to spend and higher debt.
Given its mandate to maximize employment and maintain price stability, the Fed took monetary policy actions in December 2008 to keep long–term
interest rates at near zero (between 0.0% and 0.25%) to help stabilize and revive the U.S economy –– leaving no option for further interest rate
reduction.
The U.S has a hybrid economy and is considered a large market economy, where there is no central authority directing people what to produce or
where to ship it. So, what are the implications and likely economic consequences of an interest rate hike using the IS–LM model in a closed economy
and a basic market for loanable funds?
Closed economy IS–LM analysis: The IS–LM model focuses on the equilibrium of the goods market and the money market. In other words, it shows
the relationship between real output and interest rates.

Fundamental And Economical Swot Of Commonwealth And Nab...
Table of contents
1.Title
2.Executive summary
3.Introduction
4.Body
I.Macro Analysis
II.Micro Analysis
5.Conclusion
6.Recommendation
7.References
Fundamental and Economical Analysis of Commonwealth and NAB bank
Executive summary
This is an economic strategic record, which is divided into three components. Section A describes and introduced CommonwealthBank and Nab Bank
concerning the mission, current price methods and the market definition of the Commonwealth Bank and Nab Bank. These banks are the top four
biggest banks in Australia, which is delivering monetary offerings. To be trained identifies countless strategic variables, which greatly influence the
efficiency and the profitability of the bank. Section B, describes the primary strategic variables that form the part of interior analysis like: interest rates,
financial rates, financial ratios, performance, activity ratio, assets, Capabilities, Core expertise. Macroeconomic developments in the same way are
used to examine the ability of macroeconomic variables to explain movements in individual banks risk and banks credit risk. Resources kind the
essential detail for any organization and hence availability of sufficient resources determines the success of the group. Section C, demonstrates the
appropriate idea about the equity markets, credit markets, and management of economic condition of two banks.
Introduction
The Commonwealth financial institution of Australia is an Australian multinational

The Effects Of Lowering And Raising Interest Rates
introduction this report is going to discuss the money market and how interest rates are determined, it will then look at the effects of lowering and
raising interest rates and the limitations of these effects. the money market is a section of the financial market where short term loans and financial
instruments are traded, for example these could be short term loans between banks with the debt maturing in less than a year.
"This gives banks, lenders and other borrowers the ability to satisfy their short term financial needs."
Finance & Development, June 2012, Vol. 49, No. 2, Randall Dodd
Explaining how interest rates are determined by the money market once the government has set targets and objectives, it is up to the policy makers to
use the tools available in order to meet these objectives. these levers are made up using fiscal and monetary policy tools. The tools used in the fiscal
policy is the use of taxation in order to control public spending, which can affect aggregate demand. When taxes are lower individuals and business
will be able to keep more of what they earn, causing better cash flow in the economy and increasing consumer spending ans confidence. This will
also be more of an incentive for individuals to seek work including workers from other countries in the EU, as they can keep more of what they earn as
take–home pay, this will cause a rise in employment, improving the efficiency of the country. When taxes are high this will generally work in the
opposite

How Banks Went Broke : A Look Into The Financial Crisis Of...
Lawrence Humes Page 1
4/28/15
Mr. Donnellan
Period 1
How Banks Went Broke: A Look Into the Financial Crisis of 2007–2008
At first, nobody foresaw what was about to happen to the economy. The economy at first was at a state of peace and unity. People were taking loans
and purchasing houses and these houses were increasing in value. The banks were giving out loans to the people to purchase the houses and earning
money on the interest of those loans. That is when people began to notice the advantages of what could be taken from this economic situation. With a
new method of earning money quickly and easily, it is no surprise that everybody began to try and use the same methods. Soon enough, the Financial
Crisis of 2007–2008 was born into reality. But the real question is, what were the main causes of the 2007–2008 financial collapse? People saw the
advantages of this situation. People began to buy houses for their lowest possible prices with their always approved mortgages and would eventually
sell them at their high price. The economy at the time has an abundance of house buyers and the value of the houses were consistently increasing. With
that price increasing, there was almost guaranteed profit. But this method of making money was almost too easy. Many people caught glimpse of the
chance to strike it rich through this reselling of houses methods. In a blink of an eye, everybody was

Finances
Workshop 2 Assignments
Answer the following questions:
1. The Lexington Property Development Company has a $10,000 note receivable from a customer due in three years. How much is the note worth
today if the interest rate is a. 9%? b. 12% compounded monthly? c. 8% compounded quarterly? d. 18% compounded monthly? e. 7% compounded
continuously?
SOLUTION: PV = FV [PVFk,n] a. PV = $10,000 [PVF9,3] = $10,000 (.7722) = $7,722 b. PV = $10,000 [PVF1,36] = $10,000 (.6989) = $6,989 c. PV
= $10,000 ... Show more content on Helpwriting.net ...
d. You borrow $12,500 and repay $21,364.24 in three years under monthly compounding.
Note: In parts c and d, be sure to give your answer as the annual nominal rate.
SOLUTION:FV = PV [FVFk,n] a. $555 = $500 [FVFk,1] FVFk,1 = 1.1100 k = 11% b. $2,078.66 = $1,850.00 [FVFk,2] FVFk,2 = 1.1236 k = 6% c.
$1,114.46 = $750.00 [FVFk,20] FVFk,20 = 1.4859 k = 2% knom = 8% d. $21,364.24 = $12,500.00 [FVFk,36] FVFk,36 = 1.7091 k = 1.5% knom =
18%
4. How much will $650 per year be worth in eight years at interest rates of a. 12% b. 8% c. 6%
SOLUTION:FVA = PMT [FVFAk,n] a. FVA = $650 [FVFA12,8] = $650 (12.2997) = $7,994.81 b. FVA = $650 [FVFA8,8] = $650 (10.6366) =
$6,913.79 c. FVA = $650 [FVFA6,8] = $650 (9.8975) = $6,433.38
5. What would you pay for an annuity of $2,000 paid every six months for 12 years if you could invest your money elsewhere at 10% compounded
semiannually?
SOLUTION: FVA = PMT [FVFAk,n] $279,600 = $7,500 [FVFAk,15] FVFAk,15 =

Monetary Policy And Its Impact On The Economy
Monetary policy is one of the two main tools authorities can use to control the course and momentum of the economy. The major indicators of a
prosperous state at present – price stability, unemployment and growth – are proven to be influenced by the supply of money which makes the various
forms of monetary policy an important and widely examined subject matter. The prominence of monetarism was first emphasized by Milton Friedman
and Anna Schwartz in their book "A Monetary History of the United States" (1963) which argues that the Big American Depression in the 1930s was
exacerbated by inadequate monetary policy. Ever since, economists and politicians alike have given monetary policy its deserved attention when
attempting to steer the economy.
Literature Review
A substantive academic literature has focused on how monetary policy should be chosen so as to stabilise the economy against unpredictable shocks.
A fundamental idea in monetary economics developed by Kydland and Prescott (1977) is the inconsistency of optimal plans and the superiority of
economic rules. They argue that discretionary policymaking is based on the current situation, however in a dynamic economic system the decisions of
agents also depend on their expectations of future policy actions. Therefore policymakers fail to acknowledge the effect of their policy on the optimal
decision of the economic agents when using optimal control theory. This idea is strengthened by Lucas and Sargent (1978) who develop

The Causes of Inflationary Pressure on New ZealandвЂ™s Economy
The causes of inflationary pressure on New Zealand's economy
The Official Cash Rate is the interest rate set by the Reserve Bank of New Zealand to meet or keep inflation under control since 1999. So it is a
very important and basic monetary tool for New Zealand's government to adjust or indicate the market interest rates with the banks in NZ.
Generally, the market interest rates are set or held around at the RBNZ'S OCR level. For example, if the OCR is set higher than before, then the market
interest rates for savers is going to increase as well. As a result, people in NZ will tend to spend less for goods and services and place more deposits
with the Banks in NZ. On the contrary, people in NZ for loans or mortgages are inclined to ... Show more content on Helpwriting.net ...
In addition, as a result of the lower OCR, the New Zealander is not preferred to place their money with banks or financial institutions because of the
lower saving interest rates. This will bring more spending and expenditures into the markets in NZ. It leads to the inflation as well.
Besides, for New Zealand, it has a similar economic experience with other developed countries in the first decade of the 21st century (Preston, 2011).
With this relatively high speed development of New Zealand's economy, its current account of the balance of the payment is kept with saving deficit
for many years due to very high government's spending and high growth in borrowing. There is no doubt that the economy of NZ can be stimulated
through this kind of approach. However, this also could produce the inflation for this country because of the massive investments for the continued
demand from New Zealander (Preston, 2011). For example, there is a rapid rise on property prices in NZ as the increased demands on that.
The figures is from http://nzae.org.nz/wp–content/uploads/2011/Session3/36_Preston.pdf
Reference list
RBNZ. (2012) what is the Official Cash Rate. Retrieved March 12, 2012 from http://www.rbnz.govt.nz/monpol/about/0072140.html
RBNZ. (2012) Monetary policy and inflation. Retrieved March 12, 2012 from http://www.rbnz.govt.nz/challenge/resources/2970552.html
Preston, D. (2011) Did monetary policy reduce the New

Household Expenditure and Savings
Introduction
Understanding the response of personal savings and expenditure to changes in the interest rates is a central to many issues in the economic policy. If
personal savings decline as a result, the overall increase in the national savings would be less than the reduction in the budget deficit. Alternatively,
contractionary monetary policy generally causes interest rates to rise. It personal saving increase as a result, the corresponding fall in consumer
expenditure helps to slow the economy.
Household behaviour is the lifecycle model, which assumes that people determine their consumption and savings at each point in their lives by looking
forward to their future income and desires, rather than considering only their current ... Show more content on Helpwriting.net ...
The Monetary Policy Committee is chaired by the governor of the Reserve Bank. It consists of eight members of the Reserve Bank, the Governor,
three deputy governors and four senior officials of the Reserve Bank.
The main refinancing operation is the weekly seven day repurchase auction, which is conducted with the commercial banks, at the repo rate as
determined by the MPC. The Reserve Bank lends funds to the banks against eligible collateral.
When the MPC decreases interest rates or are low, the allows households to have more access to money, contrary, the financial institutions make a very
low profit, so for financial institutions to make profit, they provide and promote many loans so that many households may acquire funds and financial
institutions benefit from that.
If the MPC decreases the interest rates, it promotes households to spend more and to have more access to funds. While on the other hand, the
Department: National Treasury is encouraging households to save, from a minor age (legal guardian signature) but applicable from the age of 21
may invest in a fixed rate retail savings bond that starts from R1 000 to R1 000 000 with investments compounded on the 31 March and 30
September, and compounded monthly (only for persons over the age of 60).
Conclusion
It is clear that the change in interest rates has a positive on households on both occasions. When interest rates decrease household have more

Solving The Mortgage Products Are Available
To understand what mortgage products are available, it is worthwhile to understand what they are comprised of; the repayment type and the interest
rate. There are also taxes, lender fees and other costs. Firstly, mortgages vary by how you repay the capital, or money borrowed. There are three types
of repayment plan: repayment, interest–only, or a hybrid of the two. In addition to the repayment, there is interest that the lender charges you to borrow
capital. It comes in three types: fixed rate, tracker rate and variable rate.
Repayment mortgages, also known as capital and interest mortgages, are similar to other loans. The entire mortgage will decrease over the term of the
loan, usually twenty–five to thirty years. You will have paid off the entire loan when the term ends if you keep up with monthly repayments. You pay
monthly, initially reducing mostly the interest on the capital. Then, you pay more towards reducing the capital borrowed. A repayment mortgage can
also help get better rates if you decide to take on another mortgage. You will be able to show that you own an increasing equity as you pay off of your
home, an appealing quality to lenders.
Looking closer at monthly repayments, you are more likely to get a better deal if you pay a larger down payment, or deposit. It is suggested that you
put down ten percent of the property's value. Your monthly repayments will be lower than that of a mortgage with a five percent deposit. Financial
products analysts Moneyfacts

Financial Institutions and Developing Countries
Introduction
Financial institutions are the most important institution in the development and financing the countries regardless of the developing countries, the
countries has developed or is still underdeveloped. A large role in the country cause financial institutions must be sensitive and transparent in
governance. However, not all financial institutions are banks. Financial institutions are included bank, finance companies, merchant bank, credit and
leasing companies, national savings banks, co–operative bank, discount houses, factoring companies and so on. In addition, financial institutions can be
classified into two which are depository and non–depository institutions. The common function among all these institutions is they were assigned to
mobilize the fund from those who had fund to those who short of fund. So, we know that they were also known as financial intermediaries.
Development and establishment of the bank Bumiputra actually closely related to the economy as well as propel the country towards a balanced
development. Malaysia is a rapidly developing country in 1991 until just before the Asian financial crisis. Besides that, the economy is also at par
with the developed economies in East Asia such as Japan, South Korea, Taiwan, and Hong Kong. A high growth level in excess of 9.0% was
accompanied by an increase in the per capita income of the population in 1970 from RM993 to RM4357 in 1990. In additional, inflation rate also
decreases so does the level of

An Asb Bank Economic Expert Essay
An ASB Bank economic expert says she expects the Reserve Bank governor Bollard post to reduce the official money rate partly attributable to
the economic impact of the earthquake. "The personal, economic and money ramifications for the complete economy from the February
earthquake are getting more severe as more data involves hand," bank economic expert Jane Turner."At a time of national crisis, once the
underlying economy is already proving frustratingly weak, a rate cut would doubtless be extremely useful to the recovery of the economy."She
same she expected the Federal Reserve Bank to deliver a fifty point rate cut in March , if not sooner. the present OCR is three per cent."The CBD
faces destruction so much on the far side that skilled within the earthquake. As a result, the amount of disruption to economic activity are so much
bigger," she said.The imapct to infrastructure was so much bigger and also the central city district was out of action for a long period of time
"The details stay incomplete , and NZ continues to face immense uncertainties. however we conclude that this earthquake will take a bigger toll on
the city and also the wider financial system," same Turner."The financial implications are probably going to be a lot of over the Sept quake. a lot of of
it 'll be insured. However, there 'll still have to be compelled to be an outsized diversion of personal and public funds and resources to the town region."
The cost to the govt was possible to be a lot of

case study HDT truck company
Eastern International University
Became Business School
SCLM 429 Transportation and Logistics Management
CASE STUDY 1
Date: December 26, 2014
Student Name: Nguyen Hoang Dung
Student Number: 1132300178
HDT TRUCK COMPANY
Capacity
Using one shift, 2 trucks assembled / day
Maximum: 3trucks/ day for large order of identical trucks
At least 4months backlog of orders
Issue
Received an order of 50 heavy trucks from Saudi Arabia
Deliver on or before July 1, 2003at Port of Doha
Received $172,000/truck in U.S funds FAS at Doha
Production: 50–truck order is scheduled from April 2 – April 29 (2.5trucks/day)
Shipping
Charter from Chicago:
With Nola Pino, charter it for $2,400/day for 30 days ( on May 1)
Loading & Blocking: $40/truck
To Chicago ... Show more content on Helpwriting.net ...
At that time, HTD would receive $172,000/ truck in U.S funds FAS (free alongside ship) at the discharging vessel in Doha. If the buyer wants to
change the selling term to FOB (free on board), which means that the buyer pays for the transportation of goods, HTD can give a discount of $2109
/truck, which is considered as the expense of transportation to Doha when HTD has the FAS term.
Answer question 3 with regard to changing the terms of sale to delivery at port in Baltimore. The buyer would unload the trucks from the railcars

The buyer wants to change the terms of sale to delivery at port in Baltimore and unload the trucks from the railcars, HTD can offer a discount of $
1790/truck (handling = $200 + ocean freight rate = $1,440 + insurance = $150), which is the total expense including fee for handling, the ocean freight
rate, and the insurance fee.
There is an interest rate that would make HDT change from one routing to another An rate of interest that can cause a change in the routes would be
calculated by
Assume that interest rate = i, we have $109, 470 + ($172,000 x 50 x 22 / 365i) = $137,300 => i = 0.054 = 5.4% (<8%)
If i= 5.4% the cost will decrease compare to i = 8%. When substituting this rate in the equation for the Chicago route, the cost is less than the Baltimore
route.
If it was the year 2005 and the borrowing cost of money was 12% per year. The buyer would pay as the trucks were delivered, and the company should
only pay for

Financial Consequences For A Truck Leasing Company
Almost every company in its history have made mistakes, some big, some irreparable, some not so harmful. Mistakes can vary in type widely. Some
mistakes are hiring, some in using assets to its fullest potential, etc.; while other mistakes are unfortunately intentional. Truth is that every time that
management in a company makes a mistake there are financial consequences for the company. IN this work we are going to analyze three cases where
something was wrong and we are going to provide a comprehensive solution to each problem.
The first case we are going to analyze took place within a Truck leasing company in the fall of 2000. The main problem is that the company was
having problem in making money. According to Froeb (2016), the company ... Show more content on Helpwriting.net ...
The second way we could determine feasible to fix the problem at hand was to leave the salespeople without a limit on how low to go, but change the
actual commission system to better align with the company profitability goals. This will mean to change the performance metric from trucks closed to
actual net revenue from sales. With this method, salespeople would have the incentive to try to lease trucks with the highest rate they can get, but still,
if at some point salespeople are satisfied with the sales they have made already there goes the incentive to keep selling.
The third and last way to approach this problem would be a good combination of the two solutions previously exposed. First, we will set the limit
based on the average cost of doing business per truck plus some profit. This will ensure that there is no lost in any deal. Along with that we will also
implement the commission program based on net revenue from sales per person, adding a little tweak of scale. Say, for the first $50,000 this person
makes for the company they are going to have a bonus of 10%, when they reach $100,000 they will get a 15% bonus, and so far so on until the
system caps at some percent. This will be more likely to keep motivation among salespersons to keep selling in order to achieve the bonuses.
The second problem we are to analyze is about managing

Pyramid Scheme
Pyramid schemes in albania essay
1– Introduction
At the beginning of the year's 1990th, with the falling of the communism, many Albanians people went through the foreign embassy to left Albania and
go abroad for a better life. They started to create a real income. In this time we have some mountebanks in the market which created the pyramid
schemes and offered high interest rate. People invested in this scheme their savings. According to the data of the different official institutions, the
number of the Albanian which invested in schemes is increased time after time. Deposits of these schemes take e big part of the GDP. This means that
they have had an important role in our economy.
Through this paper we want to give a general overview ... Show more content on Helpwriting.net ...
4. Xhaferri was created by Rrapush Xhaferri spin off from Populli. At time of collapse its debt was over $300 million. This scheme attracted over 1
million depositors. 5. Maksude Kademi the president of Sude started its activity as a leading lottery in a shoe factory where she worked. After that
Sudeoperated as a pyramidal scheme. This was the first scheme that fell on November 1996 and its debt ranged $40–90 million and had no assets.
Other pyramidal schemes were: Kamberi, Silva, Cenaj&Co, ect. All of dates ore taken by Chris Jarvis, 2000: p 11.
2.2–Favorable factors
As we all know Albania was a communist country for many years and has followed a centralized economy under Dictator Enver Hoxha, who isolated
the country from other countries. This made that the process of crossing in open economy has been very difficult for Albanians. The population was
uninformed, uneducated with market structures and the way of how capitalism worked. This fact, the lack of private property and big poverty made
people easily fall prey of these deceptions. (Jarvis, 2000: p.7)
Another factor that has favored the establishment of these schemes was the lack of formal market. There were only 3 banks that operate in the market,
taking deposits and possessed 90% of deposits, which were not reliable intermediary (Bank of Albania, 2003).
The problem with the existing banks was not lower interest rates but the system of payments was inadequate for a simple

The Affects of Bank Mergers on Customers & Associates
Bank mergers have increased rapidly in the past few years. Many wonder are so many mergers really necessary. The consolidation of two large banks
could affect the relationship between the community, customer and the employee. Along with the merging of the two industries comes change for
everyone involved. There is a lot of competition in the banking industry, which is the main reason for so manybank mergers. Bank mergers can improve
competition and can be beneficial to the community if both financial institutions are in agreement with doing what is best for everyone involved. Banks
should consider other options before taking a chance on losing good customers, loyal employees and trust in the community.The merger between two ...
Show more content on Helpwriting.net ...
This will cause job eliminations that would limit the service that a customer might get. The rapid increase of bank mergers will result in more bank
employees being displaced or outsourced. Caring for the associate, the customer and the community should be the main principal of a bank merger.
Being active in the community is not just about growing the business but also gaining the trust of the local community. Relationship building and trust
is a direct result of community involvement. Customers have to trust that the merged banks are ethical and will work hard for them. Bank mergers
will continue as the economy slows down and everyone involved in the process must be aware of what the other is doing. "Building that trust is how
you grow and develop relationships within the community" (Medina 2). For the merger to be successful, the community needs to feel that the bank not
only cares about its business but also the community. Bank mergers could be good for the community and associates of the companies if they were
involved in the final decision. The two companies must convince everyone that they will be better together and focus on building a stronger future for
shareholders, customers, associates and communities. "Merging with new banks gives us new markets and access to new clients" (Johnson 3). The two
merging banks will have to put the needs

Morris
Case 19| Morris de Minas | By Ian H. Giddy|
Vijak Pongtippun Viwan Wongviriyawong Wenyu|
Introduction In August 1984, Morris Mini Mainframe Computer Company in New Jersey was looking for the most desirable financing alternative
for Morris de Minas Ltda, its Brazilian affiliate, in the working capital needs of 82,650 million cruzeiros or US $39,320,000; at the exchange rate of
2,102 cruzeiros per US dollar. David Albuquerque, the vice–president of finance for the Latin American Division, was in charge of exploring possible
financing arrangements and preparing a financing alternative plan. Albuquerque believed that Brazilian expected inflation rate and tax legislation, and
the future exchange rate would play major roles ... Show more content on Helpwriting.net ...
However, the economy recovered rapidly during 1968 to 1973 with averaging over 10 percent per annum. The GDP also increased at a rate above 5
percent per annum between 1974 and 1980, except for 1978 (see Exhibit 2). However, Brazil had incurred an extremely high level of indebtedness due
to the support of this massive development program. The high interest rates on dollar funds and the unwillingness of foreign lenders to advance
additional loans caused a deep economic recession in Brazil. Interest rates directly affect the credit market (loans) because higher interest rates make
borrowing more costly. As a result, Brazilian government who aimed to balance the payment had to ask the International Monetary Fund (IMF) for
funds.
Exhibit 2: Morris de Minas, Brazil's Gross Domestic Product | 1979| 1980| 1981| 1982| 1983| Total (CR $ billions)| | | | | | At Current Prices| 6,239|
13,104| 26,833| 53,150| 130,805| Real Increase (%)| 6.8| 7.9| –1.9| 1.4| –3.3| Per Capita (CR $ thousands)| | | | | | At Current Prices| 54| 110| 220| 425|
1,021| Real Increase (%)| 4.2| 5.4| –4.1| –0.8| –5.4|
As the export performance of Brazil

Monetary Policy On The Connections Between Money, Banks,...
This paper focuses on Monetary Policy, which centres on the connections between money, banks, and credit to lenders. In addition, this paper will cover
the effect on macroeconomic factors such as GDP, unemployment, inflation, and interest rates. With many combinations of monetary policy, the paper
covers the optimal balance between economic growth, low inflation, and a reasonable rate of unemployment.
Money is any object that functions as a means of exchange that society accepts social and legal payment for goods and services and in settlement of
debts. looks at the nature and value of money, and its effect on determiningmonetary policy. In an article by Von L Mises he explaines that moneys
only could come about after there was a demand for the money commodity in a barter economy (Mises, V. L. (1953). The Theory of Money and
Credit. New Haven, Conn, 439). The private sector exerts enormous demand, which it largely financed out of the liquidation of its holdings of
short–term government paper, which forces banks to call the activation of its liquid reserves. "The treasury, in order to repay this short–term paper, had
to fall back upon money creation by borrowing from the banking system" (Holtrop, M. (1972). On the Effectiveness of Monetary Policy. Ournal of
Money, Credit & Banking,, 4(2), 287). Banks create money in an effort to attract borrowers to take out loans. This allows the Feds to increase money
creation for many sources of financing for budget deficits in all

Star River Electronics
In Partial Fulfillment
Of the Course Requirement
In Management Financial Planning
Submitted to:
Professor Raymond Queddeng
Submitted by:
Group 3
Alfabeto, Carmela
Conos, Via
Leal, Diva
On:
November 17, 2007 I. CASE BACKAGROUND
Star River Electronics (SRE) was a joint venture company between Starlight Electronics Ltd., and an Asian venture–capital firm, New Era Partners. The
company was based in Singapore, and was engaged into the manufacturing of CD–ROMs which it supplied to major software companies.
The CD–ROM manufacturing industry grew rapidly in the mid–1990s due to the popularity of optical and multimedia products. Because of the
emergence of small, but aggressive players, ... Show more content on Helpwriting.net ...
Any external funding needed is in the form of debt. Any other assumptions are based on the historical analysis of reports. To find the rate ofinterest of
New Era Loan, multiply the borrowings of bond issue and short term borrowings to their rates then deduct the total of the two interest amounts from the
total interest expense in 2001 (SGD7,818).

The given interest rates are: a) 6.7% was computed as Prime Lending rate of 5.2% + 1.5% (City Bank); b) interest rate on bond issue was stated at
5.75% which is paid semi–annually. The interest expense attributed to the New Era loan of SGD10,000 is a balancing figure.
The interest rate to be used for all short–term borrowings should be 7.58%..
3. What is the company's sustainable growth rate based on the projections for 2002 and 2003? Is the company growing beyond its financial capabilities?
Based on the company's 2001 performance, the computed sustainable growth rate is at 10.95%. This means that the forecast 15% sales growth per
year for 2002 and 2003 is above the maximum growth rate that SRE can maintain without resorting to additional borrowings. Given this, it can be
surmised that if SRE is compelled to target this annual growth for the next two years, then it will have to be prepared to increase the level of its
short–term

Islamic Banking Practices Compared to Conventional Banking...
Introduction
The co–existence of conventional banking along with Islamic banking gives an exceptional platform to compare Islamic banking practices with those
of conventional banking practices. It is clearly known that Islamic banks are different from those of conventional banks since they do not deal with
interest (Riba), i.e. usury, which is totally banned in Islam. In other words, banks are not allowed to take an interest rate on the loans given to customers.
The concept considered in Islamic banking is the profit–and–loss sharing (PLS) which is based on profit–sharing and joint–venture that goes with
Islamic Sharia. In fact, PLS adapts the system of integration in which borrowers share profits and losses with banks with their ... Show more content on
Helpwriting.net ...
Importance of the Study
The privilege of Islamic banking is that it provides the same services the conventional banks provide but with the Islamic Sharia. What is more
important of this study is to find out more about the profit–and–loss sharing PLS paradigm.
Objectives of the Study
The main objective of this study is: (a) to find out the extent of using profit–and–sharing paradigm in Islamic banks in Jordan; (b) to search about the
main principles of Islamic interest – free banking and operations compared to interest – based banking system in Jordan; and (c) to compare between
conventional deposit rates and Islamic investment rates.
This study examines the principles and criteria Islamic banking operates in providing their financial services which make different from those of
conventional banks.
The Methodology
To find out more about the usage of profit–loss sharing paradigm in Islamic banking system, the researcher will consider the long–run relation and the
short–run dynamics between conventional deposit rates and Islamic investment rates. To investigate about the profit–and–loss sharing paradigm, we
follow (Chong & Ming–Hua, 2009) long–run and short–run principles and efficiencies tests to compare the conventional deposit rates with those of
Islamic banking rates. The Bivariate Granger Causality Test will be first used to determine the dependent and independent variables of this feature.
Two hypotheses will be tested: (a) changes in the

Business
In this assignment I will compare the changes to my two selected business activities within an organisation, and I will compare the differences and
similarities between them using two different economic environments. The companies I have chosen to compare are Tesco a grocery store in UK and
Toyota a car company in japan. I will compare them using inflation rate and interest rate.
Inflation rate UK inflation rate is at 2.7% this will make the demand for Tesco products decrease because the prices are increasing. At the inflation
rate product prices will increase and many Tesco customers will demand less of the products because their disposable income has also decrease.
Whereas the inflation rate for Japan was 1.00% but has decrease to 0.91% ... Show more content on Helpwriting.net ...
The advantage of absorbing cost is that they will break even and/or increase customer number. However the disadvantage of the method is that they
will not make any increase profit as they will remain in their normal figure.
Personally I will recommend that Tesco and Toyota absorb cost because it will not lead them to loss of income. Whereas increasing prices will and
it can also offer them more customers which might resolve to them making a little additional profit. It is beneficial for both Tesco and Toyota when
inflation rate decrease as it enables the business to maximise their profit, pay off debts and expand into the global market which will affect the
prosperity of japan and UK economy. The downside however of increasing inflation rate is that there will be a stretch in material. This will precede
Tesco and Toyota to increase their product prices where therefore means that the demand for the product will decrease. This is a massive effect on
Toyota and Tesco suppliers as they will need to satisfy each other requirements.
Interest rate The interest rate for Japan and the UK has a massive difference. Japan's interest rate is 0.0% whereas UK interest rate is at 0.5% which is
considered to be quite low as well. It is a good time for Tesco to borrow money from the bank to use to invest in their company as hey will have a little
interest rate to pay back. Due to the low rate of interest banks and other banking institution tends to offer

Federal Reserve Operations And Market Impact
Federal Reserve Operations and Market Impact In order for the Federal Reserve to fulfill their goal of moderate long term interest rates, stable prices
and maximum employment, they rely on developing strategic changes to the monetary policy. Through monetary policy changes, the Federal Reserve
can either restrict or encourage economic growth and inflation, thereby molding the macroeconomy into a state of consistent health. Overall, there are
three tools used to modify the monetary policy, they include reserve requirements, discount rates, and open market operations. In an effort to promote
price stability within the economy, these tools influence monetary conditions by affecting interest rates, credit availability, money supply and security
prices. While one tool is use more frequently than the others, all three are necessary in establishing stable economic conditions.
Reserve Requirement The reserve requirement is a tool used by the Federal Reserve to adapt the monetary policy to their target range. Reserve
requirements control the minimum amount of funds a depository intuition is required to maintain against their liabilities (Federal Reserve, n.d).
Furthermore, the reserve requirement is usually tied into a ratio of transaction accounts the depository institutions holds. Consequently, a decrease in
the reserve requirement allows institutions to hold less funds enabling them to loan out a greater percentage, thereby increasing the funds available
within the

Analysis Of The Current Financial Crisis
Analysis Of The Current Financial Crisis
YourFirstName YourLastName
University title
Student's name
Professor
Subject
Date
Financial crisis is a situation where the financial value of assets or an economy drops by a significant margin that can cripple the normal functioning of
an economy of the affected country. Different economists came forward to explain theories that lead to the differentfinancial crisis especially in the
history. These economists include Krugman, Taylor and Blinder. Causes of the crisis include recessions, banking shocks, currency crisis, stock shock,
and financial bubbles amongst others. There is evidence of financial crisis I the past. Most of the time, the crisis was brought ... Show more content on
Helpwriting.net ...
The model has three parts; the aggregate demand equation. The equation relates the domestic spending to real income alongside the interest rate, with
the net export. y = D(y, i) + NX (eP*/P, y). The second part is the money–demand equation: M/P = L(y, i) and the third part of the model is the interest
arbitrage equation. This part explains that investors should shield themselves against risks and expect the exchange rates to be stable; i = i*
The model has its limitations as no exchange rate is expected not to change with time (Bernanke and Gertler, 1989). The third part is therefore
unrealistic.
The figure shows output y and exchange rate e. The line AA shows points at which the domestic rates equals the foreign rates. The line GG outlines
the amount of output given a particular exchange rate. When a strong open economy effect is added to the model, a crisis occurs. For example, if
foreign currency controls most debts of many firms in a country, the balance sheets will constrain their investment. This will lead to domestic demand
having a direct dependence on the real exchange rate; y = D(y, i, eP*/P) + NX(eP*/P, y) . Under these circumstances, when the real exchange rates
becomes unfavorable, the firms holding foreign current will not be able to invest. This will lead to triviality at the margin of the direct exchange rate
effect. The corporate sector runs bankrupt but the small businesses benefit from weak currency. The effects can be so significant

Interest Rates And Its Impact On Financial And Saving...
Interest rates are essential regarding financial and saving money divisions, they focus key variables and choices that are going to be made inside banks,
so exhorting what are premium rates and characterizing them are vital. Interest rates is the rate which is charged to the individuals when getting cash
from the bank, whether it might be taking out an advance or home loan on the other hand, there are two sides to it and it can likewise be the prize of
sparing your cash and putting your cash into ISA records and putting resources into securities for instance. In the UK, the general interest rate is at
present 0.5% however this can differ as distinctive banks and monetary organization loan specialists can have diverse terms and conditions, it
additionally relies on upon specific people financial record and different components like pay.
As a matter of first importance, lets begin off by expressing what the money market is comprised of and this is comprised of cash and bond, at the
end of the day the conduct of central banks and private parts monetary establishments. There are both positives and negatives for individuals holding
their cash in both of the two. For instance, in the private segment you put in your cash into securities in this way there is a plausibility of profiting
through premium however then again, this is seen as a danger if the rate falls and you'll a percentage loose your money. Additionally, because of in the
event that you hold cash in a settled rate

The Presidential Election : President Obama Is The First...
The 2008 US presidential Election: We select the 2008 US presidential election is because president Obama is the first African American president.
Panel B of Table 1 reports results of arbitrage computation for the 2008 US presidential election. As we can observe from Panel B of Table 1, we do
not see any positive return both from USD to GBP and from GBP to USD. Only one positive return appears in 3 months' forward rates for both USD to
GBP and GBP to USD. When we look at the averagearbitrage opportunity for different maturities, the average arbitrage opportunity of USD to GBP
is smaller than that of GBP to USD in 3 out of 4 different maturities. The 2008–2009 global financial crisis: To investigate this global impact, the first
challenge we encounter is what is the beginning and ending period for this economic event. To find more reliable time frame, we use the timeline of
the global financial crisis given by Federal Reserve Bank of St. Louis. This timeline is also adopted by Shynkevich (2016). In this global event, we
can see several positive arbitrage profit occur in these 4 different maturities (mostly seen in 1–month and 3–months). Furthermore, in terms of average
arbitrage profit, the average arbitrage profit of USD to GBP is greater than that of GBP to USD in only 3–months maturity. The 911 terrorist attack
World Trade Center and the Pentagon: To investigate how market react to this unexpected shock, we will check one month reaction after the 911 shock.

How the Fall of Lehman Brothers Impacted the 2008 Financial Crisis

Recommended

Recommended

More Related Content

More from Anna Barrett

More from Anna Barrett (15)

Recently uploaded

Recently uploaded (20)

How the Fall of Lehman Brothers Impacted the 2008 Financial Crisis