Identify the intermediate objectives for macro prudential policy that have been put forward by

the European Systemic Risk Board. Provide a rationale for each of these objectives. Provide

detailed examples of their introduction in Basel 3 and by regulatory authorities.

Outline the dangers that clients face in dealing with Financial Advisers and Intermediaries. How

does MiFIDII attempt to deal with this?

The 5th Anti Money Laundering Directive introduces a number of changes on the 4th Directive. Outline the principal changes, providing reasons for their introduction.

Is use of leverage common among Closed-End or Open-End funds? Why?

Question 20. Consider a 2-year bond. The coupon rate of the bond is 10%, and the bond pays coupons semiannually. The bond is selling at a yield to maturity of 8.0% annually, or 4.0% semi-annually.

a. What is the duration of the bond? (12 points)

b. If the semi-annually yield changes from 4.0% to 5.0%, what is the predicted change in the price of the bond using duration? (8 points)

Calculate how much interest you would pay during the first 12 months if you were to borrow $10,000 at 6% to paid off in 5 years via monthly installments. This loan is compounded monthly. Based on the total amount of interest paid during the first 12 months, what is the loan effective interest rate for year 1?

Below is a list of prices for zero-coupon bonds of various maturities.

a. What is the forward rate in the third year? (11 points)

b. Assume that the Treasury just issued a 9.7% coupon bond that will mature in 3 years. At what price will the bond sell? For simplicity, assume the coupon bond pays coupons annually. (9 points)

c. What is the yield to maturity on the coupon bond in part (b)?

What if any changes have occurred in your organisation/department since the last budget was prepared, that might impact on the next budget?

Objective: To provide you with an opportunity to analyse data and information on the effectiveness of financial management processes within the work team and identify, document and recommend any improvements to existing processes.

Activity: How might you determine your company's performance regarding the above? What processes could be improved? Provide a snapshot of your organisation against these three criteria. (minimum 300 words)

OQ Inc. is an all equity financed company in the country which does not have any corporate taxes. The company has an EBIT of $2 million and EBIT is expected to grow at 6% per year forever. The cost of equity for OQ Inc. is 18%. Currently, the company has 625,000 shares of common stock outstanding.

a. Calculate the value of the firm with its all equity financed capital structure.

b. Suppose the company is thinking about changing its capital structure. The company wants to have 35% debt and 65% equity financing. Suppose the company can borrow the required amount at 10% per year. The company is going to buy 35% of its shares back with the money it is borrowing. Determine the amount of money the company needs to borrow to achieve its desired capital structure.

c. Determine the EBIT that would make the company indifferent between 35% debt and 65% equity financing, and 100% equity financing.

d. Given the break-even EBIT you calculated in part (c) of this question and the EBIT the company has, indicate and briefly justify the capital structure that should be preferred by the firm.

Carol plans to establish a new laundry. Prior to establishing her new business, she understood that she needs to conduct a market test. The cost of this test marketing is $ 65,000. The potential market is quite good at least for the next five years. That's why she is considering investing in a new machine for her new business of $ 450,000. She estimated that the depreciation will be $ 45,000 annually. by the end of project the machine can be sold again for $ 125,000 after tax. The machine is estimated to save $ 130,000 cost of capital pre-tax annually. The new product will cost around 35 percent of the sales, and the expected sales in the first year will be around $ 99,000 and will increase 25 percent annually. Carol has an empty building that can be used to do her new business. The building actually can be sold for $ 115.000 after tax. She considers that she needs an initial $ 55,000 as an initial net working capital. The net working capital at the end of each year will be equal to 20 percent of sales for that year. She considers that her current selling and the general cost are $ 32,000 and it will increase 13 percent annually due to inflation and government regulation. The tax rate is 21 percent and the discount rate is 12 percent. Based on her marketing test, she believes that the sales of a new product will increase by around 25 percent annually. However, the introduction of new business products will reduce the existing product for 20 percent.

a) How is the proposed new project analysis? Use Excel and please provide the formula or calculation so I can apply it to my task.

what is the relationship between
Current ratio , Inventory turnover ,Days’ sales in inventory,Debt to equity ratio, Asset Turnover Ratio,
Inventory Turnover Ratio, Net Profit margin, Return on assets (ROA), Return on Equity
Ratio
and why ? thank you for your help

Briefly explain the following statements:

i) Fundamental Analysis and Technical Analysis and their application in securities analysis

ii) Diversification effect by using portfolio theory and CAPM

iii) The use of alpha and beta in investment selection

iv) The role of correlations, variance and covariance in portfolio theory.

A.Which of the following is TRUE regarding management analysis?

1.A risk averse management team is preferred when evaluating the creditworthiness of a company.

2.Management analysis is critical when dealing with a high risk borrower.

3.The reputation of the management team should be evaluated by interviewing employees of the company.

B.Which of the following statements is TRUE regarding loan security?

A.An analyst should aim to secure a loan with one of each type of loan security.

B.Loan security protects the lender’s claim against unforeseen and unfavorable events.

C.Financial institutions should always approve loans if the value of the security can cover the value of the loan.

D.It is unnecessary to take security if the company has a good history with the financial institution.

4.Management analysis is one of the most efficient and effective ways to evaluate a company’s creditworthiness.

5. ) A call option on an S&P 500 futures contract has an exercise price of 1490; the call premium is currently $6.50. On the same date, a put option on the S&P 500 futures contract has an exercise price of 1490; the put premium is currently $7.50. The two options have the same expiration date.

1. Is the current index value greater than or less than 1490. How do you know?

2. Assume that the S&P 500 index is 1485 at expiration:

• Should the call option be exercised or should it be left to expire? What is the net ($) gain or loss after accounting for the premium paid to purchase the option?

• Should the put option be exercised or should it be left to expire? What is the net ($) gain or loss after accounting for the premium paid to purchase the option?