"Economics / Finance / Banking" Essays

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Interest Rate Risk Management Term Paper

Term Paper  |  3 pages (1,182 words)
Bibliography Sources: 1+

SAMPLE TEXT:

The management of interest rates is more than managing inflation -- through interest rate manipulation, the Federal Reserve controls outcomes such as mergers, bankruptcies, overcapacity, relocation abroad, state and federal subsidies, competition, taxes, and many other business needs and trends. When businesses need to borrow money, the Federal Reserve's actions are paramount to the overall process.

The risk associated with interest in both the public and the private sector is controlled by these banking institutions including the Federal Reserve Bank. Consider that there are both banks and non-banks that participate in the United States. Banks are made up of commercial banks, savings & loan associations, mutual savings banks, and credit unions. The majority of the lending and credit surprisingly is not handled by banks.

One of the biggest stakes in interest rate risk management in the United States is actually handled by institutions considered to be non-banks. These consist of finance companies, mortgage companies, insurance companies, pension funds, and investment banks. The difference between banks and non-banks is that non-banks do not accept demand deposits and therefore do not participate in the United States Payment System. This distinction is mute because these non-banks success is vital to our way of life in regard to interest rate risk management because they hold nearly eighty percent of all lending opportunities. Consider the impact of insurance companies who underwrite premature death risks and are selling annuities. The interest rates are a major aspect of their business and demand may be changing in the future.

A key factor to all of these institutions when discussing interest rate risk management is the fact that the baby boomer generation is gradually preparing for retirement. The implications are simple. Investors will need retirement incomes, insurance policies will have to pay out more money and the entire system may be in trouble as our Social Security benefits will not be solvent to a point of paying out benefits. Investors should be in the market for the long haul to take advantage of the fact that over time there is less risk and less volatility. But as America ages, the long haul is not long enough. The investment strategy of long-term investing holds true for business entities as well. Businesses also generate current and future assets through investments. Consider that as more individuals retire, insurance companies will need to grow current investments at a pace that will sustain the need for capital in the future while still meeting the needs of the organizations.

In conclusion, this report aimed to discuss the volatility of interest rates and how those issues are important for insurance companies, especially those underwriting premature death risks and selling annuities. The report also presented insights into why interest rates are important for other financial institutions such as banks and corporations who hold interest related securities throughout their accounting processes. Finally, the essay offered interest rate risk management processes utilized by different corporations and the types of risk management throughout the market.

Works Cited

Aaron, Henry J.… [read more]


E-Banking Modernization on the Technological Term Paper

Term Paper  |  10 pages (4,049 words)
Bibliography Sources: 1+

SAMPLE TEXT:

EDI is considered fundamental to the activities like Just-in-time processing by manufacturing companies and also has deep pedigree in electronic commerce and electronic trade. (XIII Payment and Settlement Systems)

Besides E-Banking services raises the tempo of cash cycle and enhances the productivity of business processes in India. The entire gamut of banking deals can be completed right from the convenience… [read more]


Derivatives Derivative Security Is a Contract Term Paper

Term Paper  |  7 pages (2,540 words)
Bibliography Sources: 1+

SAMPLE TEXT:

Derivatives derivative security is a contract that specifies the rights and obligations between the issuer of the security and the holder, to receive or deliver future cash flows (or exchange of other securities or assets) based on some future event. A derivative can have a large number of properties, so that its value depends on many factors. The terms and… [read more]


Business the Ethics of Executive Compensation Term Paper

Term Paper  |  10 pages (3,372 words)
Bibliography Sources: 1+

SAMPLE TEXT:

Business

The Ethics of Executive Compensation:

What are the Lessons of ENRON

Corporations have been in the news a lot lately - and not necessarily for the best of reasons. Corporate scandal after corporate scandal has caused many in the public to take a closer look at just what it is that is going on in America's boardrooms. Companies like… [read more]


Mexico Economic System During Three Periods Term Paper

Term Paper  |  3 pages (870 words)
Bibliography Sources: 0

SAMPLE TEXT:

Mexico in the 20th and into the 21st Century -- Economic History and Prognosis

Post-World War II Mexico

What type of economic system is it? How does it operate?

Lazaro Cardenas, president from 1934 to 1940, began to solidified his party's popularity by instituting land distribution programs to poor Mexicans and nationalizing the oil industry, a policy that continued in the post-war economic. The Mexican economic system at this time was thus marginally capitalist but with strong socialist overtones. ("Mexico: History in Brief," Country Overview: The Economist, 2003)

How does the economic system relate to the political structure?

A single political party, the Institutional Revolutionary Party (PRI), dominated Mexico's modern political history. The party combined populism and patronage in a potent rhetorical and policy mix and held on to power for more than 70 years. ("Mexico: History in Brief," Country Overview: The Economist, 2003)

How does it relate to the social structure?

The popularity of PRI was due, in large degree, to its image as a worker's party, and drew its support from the considerable class divisions of the haves and the have-nots that had existed within Mexico. ("Mexico: History in Brief," Country Overview: The Economist, 2003)

What does the economic system mean to a poor family?

Although far from perfect, at this time the economic lot of the poor seemed to be improving, compared to the past century of economic class oppression.

What does it mean to a middle class family? And wealthy families?

In contrast, the relatively small middle and upper classes of Mexico encountered a great deal of social difficulty during this period, although the middle class saw something of an upturn in their economic prospects.

What does the economic system mean to a corporation?

Nationalized oil policies made this a hostile period for both national and international manufacturing companies, combined with protectionist trade policies.

What is the makeup of the capital base, labor base, and land base?

The government and a few wealthy companies largely held the capital base. The capital base was similarly concentrated, and the labor and land base was predominantly agricultural in its composition.

Who controls the capital and land markets?

The government, overall, determined the administration of both sectors.

How do history and economics interrelate?

Government policy encouraged rapid population and quick-burning economic growth, partly for historical reasons. Mexicans believed that the 19th Century seizure of Mexican territories stretching from Texas to California by the United States would have been impossible had they not been so sparsely populated. (Dillon, 1999)

What is the prognosis for the future?

During this period, the economy was expanding, although social unrest…… [read more]


Monetary Policy and Mortgages Term Paper

Term Paper  |  6 pages (2,555 words)
Bibliography Sources: 1+

SAMPLE TEXT:

This is the situation that is now happening in UK for the last year or so, and may continue for some more time. (Monetary Policy and Financial Stability)

The functions in monetary policy have also changed over the years and till 1970s it also included direct controls on the amount of money that the bank could lend. This helped in… [read more]


International Political Economic Term Paper

Term Paper  |  2 pages (660 words)
Bibliography Sources: 1

SAMPLE TEXT:

¶ … economy is becoming increasingly interconnected. If you have any doubts, look at the label on your clothing. "Buy a T-shirt at Wal-Mart fleece at J.C. Penny or Hanes panties anywhere in the United States, and there's a halfway decent chance that they were stitched together" in Africa, "in an acre-size garment factory crammed with thousands of frantically clacking sewing machines." (Wines, 2005) in one such factory in Lesotho, virtually the entire output of the factory or "25,000 items of clothing daily, is America-bound." (Wines, 2005) but it is often said that when America sneezes, the rest of the world gets an economic cold -- and this is particularly true of the young, developing economies of the world.

According to a March 12, 2005 article in the New York Times, entitled, "Dollar's Fall Silences Africa's Garment Factories," one African factory owner mourned, "Two thousand people work here, and unfortunately last week I had to retrench 500 people, because there are no orders." (Wines, 2005) Although one garment union official complained that "the American buyer is not coming to Lesotho to buy," Michael Wines suggests the problem of the decline in the African garment industry is not so much that buyers from America are not coming to buy, rather it is the devalued American dollar, and its headlong plunge in value in contrast to the Euro and other world currencies.

It is simply no longer as economically advantageous for American producers to go to Africa to exploit the lower wages African workers, because of the currency exchange rate between the two nations. "Three years ago, Lesotho's garment factories had to sell only $56 worth of clothes to stores in the United States to cover the monthly wage of 650 maloti [the local currency] for a sewing-machine operator. Today, that same salary consumes $109 in sales." (Wines, 2005) Nothing has changed, other than the fact that the dollar is less highly valued, resulting in nearly double the labor costs in Africa.…… [read more]


Andrew Mellon Was an Important Term Paper

Term Paper  |  6 pages (1,785 words)
Bibliography Sources: 1+

SAMPLE TEXT:

Once he became secretary of state, he attempted to use his knowledge of finance to better the economic condition of the company. The discussion also sought to dispel the assertion that Mellon only aided the wealthy and that his policies helped trigger the Great Depression. We found that his taxation policy was devised in an effort to relieve the tax burden of the wealthy so that they could maintain the drive to produce wealth. We also found that the Great depression occurred more because of the financial burden placed on the country as a result of World War I.

Bibliography

History of the Treasury. United States Department of the Treasury. 2005 http://www.ustreas.gov/education/history/secretaries/awmellon.html

Brooks, Robert C. Political Parties and Electoral Problems. New York: Harper & Brothers, 1923.

Craig, Douglas B. After Wilson: The Struggle for Control of the Democratic Party, 1920-1934. Chapel Hill, NC: University of North Carolina Press, 1992.

Foster, William Trufant, and Waddill Catchings. Profits. Boston: Houghton Mifflin Company, 1925.

Graves, B., King, C.L. Readings in Public Opinion: Its Formation and Control. Ed. W.. New York: D. Appleton, 1928.

Moley, Raymond. 27 Masters of Politics: In a Personal Perspective. New York: Funk & Wagnalls Co., 1949.

"Notes from the Editors." Monthly Review Mar. 2003: V+.

O'Connor, Harvey. Mellon's Millions: The Biography of a Fortune; the Life and Times of Andrew W. Mellon. New York: The John Day Company, 1933.

Robinson, Claude E., Robert E. Chaddock, and Columbia University Council for Research in the Social Sciences. Straw Votes, a Study of Political Prediction: A Study of Political Prediction. New York: Columbia University Press, 1932.

Smith, Charles W. Public Opinion in a Democracy: A Study in American Politics. New York: Prentice-Hall, 1939.

Studenski, Paul, and…… [read more]


Great Depression of the Early 1930's in Canada Term Paper

Term Paper  |  15 pages (3,857 words)
Bibliography Sources: 1+

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Great Depression of the Early 1930's In Canada

The central concern of this paper was to provide an overview of the main causes of the Great depression as they specifically relate to the Canadian situation. The main question of the paper - could the impact of the economic upheaval in Canada been lessened by a different use of policy? -… [read more]


Japan and Foreign Direct Investment for Economic Term Paper

Term Paper  |  6 pages (2,785 words)
Bibliography Sources: 1+

SAMPLE TEXT:

Japan and Foreign Direct Investment for Economic Development

The rapid growth of the number of multinational corporations and their extensive spread worldwide continues as a major aspect of the globalization process begun over a decade ago. Transnational business enterprises reach into and are impacted by other countries in a variety of ways, first and foremost through foreign direct investment (FDI).… [read more]


U.S. Inflation: Causes, Cost Term Paper

Term Paper  |  10 pages (4,378 words)
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This calculation neglects another result of monetary policy and that is the effect that monetary policy has on outstanding debt. This effect comes through the price levels of debt on future price level of the debt, and the future price level of the bonds. The effects are also through the reflected cost of interest for that debt, as this is… [read more]


Externalities and Financing Government Microeconomics Term Paper

Term Paper  |  5 pages (1,653 words)
Bibliography Sources: 1+

SAMPLE TEXT:

"The European market illustrates how higher taxes push greater efficiency. Last week, premium gas prices in Europe were averaging more than double the U.S. level of $2.24 a gallon -- with prices at the pump averaging $5.07 a gallon in France, $5.36 in Germany and $5.59 in Britain. European consumers inevitably have demanded more efficient cars. According to Hakim, overall oil consumption has fallen in Germany and Britain since the 1970s." (Ignatius, 2004)

However, Ignatius ignores a clear differential between Europe and the United States -- geography. European nations are more compressed, by virtue of that continent's smaller spans, and more concentrated nations, cities, and national capitals. There is also a better system of worker transportation. Fewer individuals need cars to get to work, and a better system of public transport for many American areas would not provide a solution, given the duration of many long commutes. Quite simply, to use another microeconomic concept, there are less 'perfect substitutes' for vehicle transport of goods and humans, for businesses and workers, by car, to consider the gas tax anything but regressive. (Ignatius, 2004) Also, there is no data to suggest that European gas prices have improved the environment.

Conclusion -- The Gas Tax: Unfair Taxation and an Inefficient Environmental Policy

Tempting as it might seem, financing another tax cut, or even subsidizing businesses developing alternative fuel cars and other means of transport is not a feasible short-term solution. It is regressive and unfair to the poor, and will stifle rather than stimulate the economy. Fairness as well as improving the environment is a crucial consideration when deciding tax policy.

Works Cited

Carson, Robert Barry, Wade L. Thomas, Jason Hecht. (2005) Microeconomic Issues Today. 8th Edition. Armonk, N.Y.: M.E. Sharpe.

Ignatius, David. (31 May 2004) "Why Gas Prices are Too Low." The Washington Post. Available at http://www.washingtonpost.com/wp-dyn/articles/A5080-2004May31.html

Mankiw, Gregory N. (24 May 1999) "Gas Tax Now!" Fortune…… [read more]


Chester Term Paper

Term Paper  |  8 pages (2,189 words)
Bibliography Sources: 0

SAMPLE TEXT:

In terms of threats, we have already mentions the threat of competitors competing in specific market segments, namely the high tech one. Indeed, Chester needs to take into consideration those companies that are able to afford larger R& D. budgets and present the market with superior offers both in terms of quality and, even more important, in terms of the quality/price ratio. In terms of strategic problems, this is also one of the most important issues to consider. In my opinion, the low price/cost strategy involved in the present may not be enough to counteract against the important competitors on the submarkets.

Department Analysis

1. R& D.

As previously mentioned, the company's applied strategy relies on generally low R& D. budgets, budgets that will allow it to launch a product in the high tech area of the market without high costs and keep it commercial throughout its later phases of life. Because the company's interest is directed towards the return on investment figures, this comes as a logical consequence to its strategy.

On the other hand, in my opinion, the company needs to look closely into partially diversifying this type of R& D. tactics. The reason for this is quite simple. AS I have pointed out, one of the main challenges that the company faces refers to whether or not it can compete in the high tech sector of the market. This is a sector that is generally not necessarily oriented towards cheap products. We need to admit that a company willing to make a successful investment in high tech technology will be able to allocate a larger portion of their budgets for this action, if this is necessary.

In this sense, we see companies competing in this segment that are willing to pay the extra price in order to tempt the consumer with the facilities the product is able to offer. The "Cost Leader with product life cycle focus," with its low R& D. spending, may jeopardize this part of the market.

2. Marketing.

In terms of marketing, the company again believes in low budget marketing campaigns. At this point, we may assume that the company will be needing to slightly increase its marketing spending in the latest phases of the product's life cycle.

Indeed, if previously we have referred to the necessity of introducing a highly performing product into the high tech sector, the low tech sector is formed mainly of price sensitive consumers, consumers who are willing to listen to a strong marketing campaign that will convince them that the lower priced product Chester is offering is still covering the main quality requirements. In this sense, a larger budget would be able to fulfill and cover this consumer requirement.

3. Production.

In terms of production, the company's strategy implies the use of excellent automation in the early stages of the product. This goes hand in hand with the ability of the company to produce a high tech product and minimize cost through efficiency. The period during which… [read more]


Is the United States More Profitable Exporting Good and Services Than Importing? Term Paper

Term Paper  |  1 pages (427 words)
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SAMPLE TEXT:

Exports and Imports

trade deficit has been growing at alarming rates. For the year 2004 the deficit increased 24% to $617.7 billion from $496.5 billion in 2003 and $421.7 billion in 2002 (Odessey, 2005). Although exports grew 12.3% in 2004, imports outpaced this increase, moving up 16.3%. China and Japan account for the largest portions of the U.S. deficit. The trade deficit with China rose by 31% from 2003 to $162 billion, more than twice that with Japan at $75.2 billion. Three major problems have contributed to the burgeoning trade deficit (Soaring high-tech and other imports from China, sharply higher oil prices drive trade deficit to new record, 2005). First, dramatic increases in the cost and volume of petroleum imports accounted for more than one-third of the increase in the trade deficit in 2004. Secondly, the decline in the value of the U.S. dollar has not resulted in the anticipated reduction in the trade deficit because the decline of the dollar against the euro was offset by slow growth in Europe and because Asian nations engaged in heavy intervention in foreign exchange markets in order to prevent the dollar from falling against their currencies. Further, advanced technology products (ATPs), once an area of major competitive advantage for the U.S., has been eroded by…… [read more]


John Pierpont Morgan (1837 Term Paper

Term Paper  |  8 pages (2,647 words)
Bibliography Sources: 1+

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There were several factors that precipitated the 1907 banking crisis. The chief of these was the rampant speculation that took place between 1905 and 1906 in the background of a prosperous economy, easy credit, and low interest rates (Moody, p. 134-6). To make matters worse, businesspersons such as F.A. Heinze and C.W. Morse regularly used the shares and resources of… [read more]


Role of Financial Institutions Term Paper

Term Paper  |  2 pages (730 words)
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Research indicates that bankers act responsibly when they ensure that their house is in order and resist the temptation to pass off poor financial performance as a contribution to the economy (Krayer, 2002).

Larger financial institutions play an additional role than just that of providing typical banking services. Financial institutions can form the core of economic development in a low-income community. For example, the World Bank's focus is on project lending and structural reforms that enhance long-run development and poverty alleviation (Stiglitz, 1998). The role of the World Bank in the global economy is to address pressing issues such as weak financial sectors, lack of transparency and poor governance in the corporate sectors, and weaknesses in external liability management will help restore confidence among foreign and domestic investors (Stiglitz, 1998). In this way, the World Bank acts to reactivate poor economies and thus to protect and extend social and economic achievements. In poorer countries, the World Bank appears to operate in coordination with the government as it steps in and fills the income-security gap that is left by companies closing and workers losing their jobs. Over the longer term, the World Bank will be working with countries to help them design modern, durable social safety nets that complement their other structural reforms (Stiglitz, 1998).

Finally, as illustrated above, the role of financial institutions is very diverse, as communities depend on them for basic transactions such as savings and loans. In the larger view, however, banks operate as the financial support of an economy, the stabilization of which the community depends on.

Bibliography

Krayer, Georg. (2002). The Role of Banks in an Economy. Retrieved June13, 2005, from Website: http://www.swissbanking.org/en/krayer_e_02_02.05.pdf

PIPA. (2000). Americans on Globalization: A Study of U.S. Public Attitudes. Retrieved March 11,

2005, from PIPA Web site: http://www.pipa.org/onlinereports/globalization/4.html

Soros, George. (2002). On Globalization. New York: Public Affairs.

Stiglitz, Joseph. (2002). Globalization and its Discontents. New York: W.W. Norton &

Company.

Stiglitz, Joseph. (1998). The Role of International Financial Institutions in the Current Global

Economy: Address to the Chicago Council on Foreign Relations. Retrieved June 13, 2005,

from the World Bank Group Website: http://www.eldis.org/static.doc5542.htm… [read more]


International Trade Each Year Essay

Essay  |  3 pages (1,027 words)
Bibliography Sources: 2

SAMPLE TEXT:

As such, I believe it is best for society to allow free trade and globalization to continue to flourish.

Foreign Exchange rates can also have a profound impact on international trade. Foreign exchange rates are simply the rate at which one currency can be exchanged for another. For instance, currently $1 is worth 1.26 Euros. Likewise 1.26 Euros can be exchanged for $1. These exchange rates are determined by simple supply and demand. Once the demand for a particular currency increases substantially, then the currency's price relative to other currencies increases. Currently, due to the European debt crisis, many investors are flocking to "safe" assets such as the American dollar or the Swiss Franc. As a result, the euro is devalued as demand for the currency is dwindling due to uncertainty regarding the nation's future. Inflation also has a role in exchange rates. As one currency is being devalued relative to others, it usually enhances the value of the stronger currency. For example, if inflation is occurring a very high levels is Brazil, investors would require more Brazilian Reals per dollar (Sanger, 2010).

From the Unites States' perspective, the country can not simply halt all imports. Both the U.S. And China need each other. It is a symbiotic relationship with both parties benefiting. If the United States halted imports from China, the cost of the many of the American produced products would increase substantially. Items that were once considered "cheap" will automatically become expensive as inefficient American manufacturing costs are passed to the consumer. The shirt that was once $10 is now $25, due in part to the high cost structure of American business. The Chinese have a competitive advantage relative to other nations as their manufacturing cost structure is very minimal compared to that of developed nations. By halting imports from China, developed nations are actually harming their constituents as they are now forced to pay higher prices for goods and services. Likewise, incomes for America families are decreasing compared to a decade ago. The median household income is now roughly $48,000 as compared with $50,000 just a few years ago. By not importing cheaper goods that are demanded by U.S. citizens, it will force these families to pay higher prices. These higher prices will ultimately strain the consumer as they now must pay higher prices with lower wages. By importing from China however, more American citizens have more discretionary income to spend on more products and services.

In conclusion, exchange rates, free trade, economics, and government tariffs all have an important role in regards to globalization. Each piece affects the other. As such, as the world becomes more globalized one nation actions will ultimately affect other nations. Therefore a through means of cooperation and collaboration is needed in order to ensure the stability of the global economy.

References:

1) O'Sullivan, Arthur; Steven M. Sheffrin (2003). Economics: Principles in action. Upper Saddle River, New Jersey 07458: Pearson Prentice Hall. pp. 458. ISBN 0-13-063085-3

2) David E. Sanger and Michael… [read more]


Foreign Aid Term Paper

Term Paper  |  5 pages (2,103 words)
Bibliography Sources: 1+

SAMPLE TEXT:

Foreign Aid is defined as the global movement of capital goods, or services that is for gainful use for other countries and their inhabitants. Foreign Aid on the official level is disbursed primarily in two types viz capital transfers, in cash or kind, either as grants or loans and technical help and training, normally as grants through human resources and… [read more]


Bank Lobby the Banking Industry Term Paper

Term Paper  |  1 pages (408 words)
Bibliography Sources: 1+

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¶ … Bank Lobby

The banking industry is one of many service-centric industries. Like any service firm, if customers have to wait for service, chances are they may turn to competitors that can provide better, faster service. This is especially true in today's world, where time is a most precious commodity. Long lines in a bank lobby can spell failure for that branch, especially considering the mature industry and the readily available competition.

The causes of these long lines can vary. Perhaps the branch is understaffed for the volume of customers it receives. Customers may be ill prepared when they reach a teller, wasting valuable time doing preparatory items that could be completed before reaching the teller window, such as filling out deposit slips. Finally, customers may not be aware of, or may be uncomfortable with, alternatives to live service.

To combat these causes, banks need to be staffed properly. This includes increased staffing during peak times, such as Friday afternoons and lunchtimes. Also, customers need to have access to areas and supplies to complete preparatory items, as well as being reminded verbally and signage to have these items completed prior to coming to the window. However, the best solution to reducing lines in…… [read more]


Lenin Imperialism the Highest Stage of Capitalism Term Paper

Term Paper  |  12 pages (3,656 words)
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Imperialism: The Highest Stage of Capitalism

Lenin begins Imperialism: The Highest Stage of Capitalism by describing World War I as an imperialist war, which he defines as a predatory war to plunder and annex, a war for the benefit of capitalistic moneyed interests in a struggle for monopolistic control. He sees the economic system of capitalism as "a world system… [read more]


American Red Cross Term Paper

Term Paper  |  3 pages (812 words)
Bibliography Sources: 0

SAMPLE TEXT:

American Red Cross complete comparative analysis of Red Cross's financial situation over the period 2003-2004 will first of all start with a calculation of the liquidity ratios. These will show the short-term solvability for the company, as well as its capacity to finance its short-term financial liabilities. We will be using the current ratio and the quick ratio as the main mean to assess the company's liquidity.

In 2004, the current ratio = current assets/current liabilities = 1,186,209/508,443 = 2.33

Following the same algorithm, in 2003, the current ratio was 2.58.

These values show that the company has no problem handling short-term liabilities and that the current ratio is much over the lower limit. Usually, negative signs appear when the current ratio is lower than 1, which is obviously not the case here. However, we may point towards the fact that the current assets are significantly greater than the current liabilities, which may show that the company could further improve its position by lowering current assets or increasing current liabilities. The margin up to 1, the lowest it can reach, is high enough to reduce the current ratio and, comparing values for 2003 and 2004, it may be the case that this is a strategy the company is currently undertaking.

The quick ratio or acid test shows the same findings with values of 1.99 in 2004 and 2.23 in 2003.

In terms of debt ratios, we will be referring to the ratio between total debts and total assets, which shows whether the company tends to use external debt or rather internal and other forms of financing in its projects.

In 2004, the debt ratio was 10.55%, while in 2003, the debt ratio was 10.34%. Constant during the period analyzed, the debt ratio and its values show the intense inclinations towards other forms of financing. Indeed, the company is clearly not inclined to appeal to debts as a significant part of its financing system.

The asset management ratios come to show the rate of efficiency with which the company is using its assets. Ratios like the inventory turnover, the fixed asset turnover or the total - assets turnover are indicators of the company's efficiency.

Inventory turnover (2004) = Net sales/Inventory = 12.5 (given the specific economic activity of the company, we have used operating revenues from products and services as the substitute for net sales). In 2003, this figure amounted for 11.79 times. Comparatively, this figure has…… [read more]


Financial Manager in Charge of Risk Management Term Paper

Term Paper  |  3 pages (857 words)
Bibliography Sources: 1+

SAMPLE TEXT:

¶ … Financial Manager in charge of Risk Management at Merrill Lynch

Who is in charge of international financial management at your company?

The concept of international risk management has become more important at the investment banking firm of Merrill Lynch than ever before, as increased concern and skepticism over business practices have propelled even high-net-worth investors to place wealth preservation, risk management and service as their top investment goals and priorities. ("What Investors Want -- Top Demands Noted in Press Report," 2003) John W. Cummings is senior vice president and chief operating officer of Merrill Lynch's Global Private Client (GPC) branch and is responsible for the Global Risk Management functions of the company. ("John W. Cummings," 2005)

Cummings is responsible for all investment staff, products and processes for equity, fixed income and municipal fixed income assets. He oversees a global risk management team of more than sixty professionals. Overall, Fullerton supports an analytical approach to risk management, that is to say a cautious approach that takes into consideration past market history and one which respects the desire of individual investors to hold onto their assets. ("Special Report Increasing the Odds for Investment Success: Understanding Risk Management," 2005, p. 1)

What is his or her background?

From 2001 to 2004, Mr. Cummings managed the Merrill Lynch technology, service and operations functions, first as chief operating officer of Global Technology & Services and then as the group's head. Previously, he was head of U.S. Private Client Services. At Merrill Lynch. He joined Merrill Lynch in 1981 in the Stamford, Connecticut, private client office, and held a succession of management roles in finance and services at the company. He also serves on the board of Merrill Lynch Financial Data Services and on the advisory board of the Columbia University Master of Science in Technology Management program. He received a Bachelor of Arts degree in economics from Fairfield University. ("John W. Cummings," 2005)

Can you find any special information on his or her approach?

The risk management process of Cummings is very different from the Merrill Lynch portfolio managers' traditional "bottom-up" fundamental analysis. Cummings believes that risk management must provide an independent "top-down" view of a portfolio that accounts for the relationships among securities, sectors or currencies. Thus, Cummings approach is to ensure that Merrill Lynch's risk management professionals analyze historical performance and other information to identify industry trends and price movements across a variety of financial sectors on a global level, giving portfolio managers important information about how a portfolio has performed as market conditions have changed. ("Special Report Increasing…… [read more]


Financial Officer for Most Parts Term Paper

Term Paper  |  8 pages (2,915 words)
Bibliography Sources: 1+

SAMPLE TEXT:

They had to do a lot of physical labor and adequate tools were not available. The food was just peanut butter, cheese from a tube, apples, and candy bars -- and this was the same food for all three meals. Sleep was in the back of a cramped vehicle and that had no air-conditioning, and go through the same schedule… [read more]


What Economics Term Paper

Term Paper  |  2 pages (688 words)
Bibliography Sources: 1+

SAMPLE TEXT:

Economics - Macroeconomics

Ch4, #6 - Market Forces Supply and Demand - Suppose that in the year 2005 the number of births is temporarily high. How does this baby boom affect the price of baby sitting services in 2010 and 2020? (Hint: 5-year-olds need babysitters whereas 15-year-olds can be baby sitters. (you can use 2 supply and demand graphs if you need to (one for 2010, one for 2020).

The baby boomer generation is right now going through this very situation in regard to social security situation. There are not enough forecast workers to cover the social security demands of the future. But in regard to this example, as the number of births is high, future babysitting services will indeed be affected. In 2010, there may not be enough baby sitters to care for the increased number of babies turning five, but in 2020 there may be to many babysitters to care for the fewer births of the future, assuming there are fewr births in the future. Thus in 2010 there will be a bigger demand for babysitters and in 2020 there will be less demand and to large a supply.

Ch4, #9 - The market for pizza has the following demand and supply schedules:

Price

Quantity demanded

Quantity Supplied

1. Graph the demand and supply curves

2. What is the equilibrium price and quantity in this market?

The equilibrium price is just under $6

3. If the actual price in this market were above the equilibrium price, what would drive the market toward the equilibrium?

A price increase for pizza will reduce the demand for pizza and would therefore drive the market towards equilibrium.

4. If the actual price in this market were below the equilibrium price, what would drive the market toward the equilibrium?

In the reverse, reduced price would increase demand and thus drive the market toward the equilibrium.

Ch4, #13 - Market research has revealed the following information about the market for chocolate bars:

The demand schedule can be represented by the question Qd = 1600-300P, where Qd is the…… [read more]


Progressive Income Taxes Term Paper

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¶ … laws governing taxation have long been an issue of debate. A progressive income tax is a plan that has long been used and touted as essential to fair taxation. The purpose of this discussion is to examine the progressive income tax. The investigation will detail the history of progressive taxation and clearly define progressive taxation. In addition, the… [read more]


Leaf From the Financial History Term Paper

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¶ … leaf from the financial history, a significant opinion survey of institutional investors, and wide-ranging reviews of the law and the lessons of modern portfolio theory, some stalwarts of the financial horizon have carved out a niche for themselves in the realm of finance through competent financial practices."

What companies are considered the leading companies in your industry?

In… [read more]


Euro vs. Dollarization Term Paper

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The factors include how far a country wishes to become integrated into a wider currency and trade area, and whether it seeks to impose monetary discipline by eliminating discretion over its own policy, as well as whether it is seeking to change from a history of high inflation. The degree to which it looks upon a domestic currency as an… [read more]


Accounting Finance Term Paper

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Accounting/Finance

Identify the stages of the budgeting process and evaluate their effectiveness.

There are four stages in most budgeting processes. The first stage is information gathering. At this stage past performance results are collected and assessment is made of the company's strategic plans. Performance results for the previous year are gathered, the company's current objectives are defined and the market… [read more]


Kindleberger's Premise Is That Psychological Term Paper

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The result of loans to lure new homeowners is an overestimation of the return that can be expected from the initial investment. The boom created by this may indeed be the beginning of a downward cycle for the housing market. This boom is then the second point offered by Kindleberger. Increasingly insecure loans offered by banks feed the illusion that housing is a profitable investment, and thus results in overtrading.

Currently it is apparent that the housing market is at the fifth stage, where some insiders are leaving the market. While it is true that many still have faith in the housing investment, others have come to terms with the economic realities of the market, and made the decision to invest elsewhere. It must also be said, however, that the effect of Hurricane Quatrain may have substantial effects on interest rates. Falling interest rates cold then result in greater sales in the housing market.

This effect on the other hand is minimal in the face of the overall trend in the housing market. The fifth stage identified by Kindleberger then offers little in terms of future prospects for the housing market. When the sixth stage is reached the housing market reveals itself as an unwise investment, mainly by the desertion of key investors. Again psychological factors come into play, paralleling the so-called mania experienced at the initial boom of the market. The apparent desertion of key investors result in a type of panic, resulting in the withdrawal of an increasing amount of investors. There is a rush for liquidity.

The final stage is then that prices become absurdly low once again and investors are tempted by an apparent easy investment. The general prospect for the housing market according to this model is then both negative and positive. While the market may experience a fall in the near future, this fall will become so severe that it will once again create a boom in very low prices for investors.… [read more]


Social Security Is Financed Term Paper

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A third option would be to keep FICA taxes at the level they are but raise the amount of earnings taxed under that law. Right now, only the first $90,000 an employee earns has FICA taxes applied. If that amount was raised to $140,000, then workers making that much would contribute considerably more. However, it seems likely that workers would only agree to such a system if their retirement check increased, so such a gain might be an artificial one (Reynolds, PAGE).

A fourth option would be to reduce the benefits paid out to those receiving social security benefits. This approach is particularly problematical for those who are approaching retirement, because they factored in the amount they would get in Social Security when they were deciding how else to financially prepare for retirement. This suggests a criticism to Bush's approach: those who can afford to do so already are making investments. The amount of social security most people would receive would be hard to live on by itself, and most people who can save other funds as well (O'Neill, PAGE).

Alan Greenspan, Chairman of the Federal Reserve, acknowledges that Social Security is headed for financial problems (O'Neill, PAGE), but no one person seems to have an answer acceptable to all people with a vested interest in the issue, making the problem political as well as fiscal. This creates a difficulty for the politicians who will have to pass the laws trying to solve the problem, because no matter what they do, significant numbers of voters will be angered by their choice. One solution might be to gradually phase in aspects of all possible plans. If all the voters are irritated, then no one constituency has been alienated.

BIBLIOGRAPHY

O'Neil, John. "Risky: Privatizing Social Security An Unwarranted Gamble." NEA Today, Sept. 2004.

Reynolds, Alan. "Myths about social security: and…… [read more]


Budgeting Management Term Paper

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The budget management process is as follows:

1. The top management will need to determine what the company's budget for the future period of time will be. This will need to take into consideration both the company's possible revenues during this time and the expansion strategy that the team has decided upon. It may be the case that the management team has designed an expansion on the market that will take up more of the resources than otherwise. While this may be the case, the spending must be determined by realistic plans and future achievements.

2. The top management team needs to organize the portfolio of projects and the investments it wants to develop in the subsequent period of time.

3. Before the actual spending and investing begins, the company needs to have an organized set of future spending. The planning functions intervene in terms of properly determining the evolution of projects' costs in the period to come. Budgeting helps plan projects' costs so that we don't arrive at a situation where the company's finance is overwhelmed by costs during a period of time. In terms of directing, budgeting ensures that the funds are used where they are most necessary. The controlling function ensures that the budget and the budgeting policies, previously established and decided upon, are fully respected. There is no point in having a healthy financial system within the company, correspondying to a well-planned budget, if this budget is regularly underestimated or overspent.

As we have seen from those previously presented, the budgeting function within the company is not only intrinsically linked to management, but the main functions of management are also reflected in a company's budgeting policies. A healthy budgeting strategy will lead to a healthy financial situation of the company and a solid development strategy for the future. Budgeting should be where every company…… [read more]


Justification for School Budget Cuts Term Paper

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Though it is extremely difficult to be innovative and to reform, the school needs to strive hard to do this in order to translate their activities into sources of funding.

Evaluation of the effectiveness of the budget cut is extremely important in order to know how the school has progressed despite the budgetary cuts. This evaluation will be determined by checking records of academic performance of the school against the past to make sure that the budget cuts have not had a significant impact on the performance of the students. This evaluation will also help to ensure there is continued educability and that the vision of the district to have high standards of learning is maintained.

There is also need to evaluate the time that is available for achieving the change required to win the grants. The school thus needs to avoid any financial considerations that will end up bringing budgetary deficits. This is to mean that even though the school needs to align its activities so as to win the grant competitions. The school needs to develop a strategy that enables that the school to win the competitive grants will not run them into a risk of budgetary deficits. This is done by making sure the school takes calculated steps in applying for the competitive grants so as not to change their system in a way which brings about the deficits.

References

Angelo, D.S. (1983). Florida Bites No Bullets on Federal Aid Cuts. Publius, 12, 127-137.

Ellerson, N. (2012). School Budgets 101: American Association of School Administrators.

Ghosh, A. (1992). 1992-93 Budget and Economic Policies. Economic and Political Weekly, 27(15/16),…… [read more]


Labor Economics Term Paper

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In U.S. 12% of workers in 20-27 years age group move from one city to another to seek employment. In developing countries large scale migration of workforce takes place from rural to urban areas.

Relative free mobility of labor force across the traditional borders, city boundaries has enabled the labor economist to seek workforce from a wider labor market.

7.… [read more]


Value of the Future Stream Term Paper

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Average cost of equity financed projects can be at the level of 15% while with some debt financing this figure can be at the level of 11-12% which I believe should be applied to the first two projects. I would use 11% for the first one, Lansing Aviation, while 12% for the second project, Adorable Pet Photography, and 13% for the third project, Sports Bar, these numbers being very rough estimates.

The discount rate is not the only measure which will influence the decision for accepting the project or not. Discount rate for each company, not average for the market level, is dependant on company goals and weighted average cost of capital. While some companies are more interested in short-term high yielding projects, some may be more interested in long-term stable projects and considering this strategic goals of the company, discount rates for decision making for each project can be different. Diversification of the company and major activities must be also considered, while for an airline company investing into Lansing Aviation can be a bad portfolio diversifier and the whole company can lose when demand for flights goes down, for a sports bar company investing in this project can be a good idea. In summer, when demand for football bar is down but the demand for tourism…… [read more]


Burger King Many Economic, Sociological Term Paper

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Also, income per capita growth will lead to higher consumption of fast food services as more funds will be available to purchasers to enjoy fast food restaurants. The third economic indicator directly influencing the price of the fast food restaurant services is the minimal wage as the majority of the wages paid within this industry are minimal and growth of minimal wage will lead to growth of the costs to produce fast food services and can be translated into higher prices of the product which shall lead to lower consumption rates. Productivity, technology growth or changes in tastes will lead to total output growth and GDP growth within the country which can be translated into higher real income per capita with higher consumption of all the products. Higher government interest rate can increase the total marginal propensity to save by the residents as it will be favorable for them to save money, while it will not be as cheap for businessmen to borrow money and thus it can decrease consumption of the people who would be rather off saving money and can decrease the total employment as investors will be reluctant to expand their production levels.

Total country economic development leading to currency ratio to other global currencies can affect consumer attitudes towards their future and also will translate into present consumption patterns. Negative future expectations will lead to higher saving rates and thus lower present consumption, while positive future expectations can lead to already today higher consumption due to higher expected future generated wealth. Negative expectations can occur due to increasing inflation which will then lead to more people wishing to spend as much money as possible today in order to avoid its' devaluation and increasing inflation expectations can lead to producers increasing their prices already today due to these negative feelings which can give push to inflation spiral.

The inflation is expected to be rather stable the following three years, not leaving the target of 3% annually, according to National Federal reserve system and it is subject to influences of oil prices which are expected to stabilize over time. One of the factors that lead to strengthening USA economy is diminishing imbalance of current accounts for the U.S.A., federal budget deficit is diminishing together with trade balance recovering. USA economy has proved to be ahead the global business cycle with the growing employment rate with growing productivity rates. Expansion federal policy proves that there are still free resources in the economy and GDP growth will nevertheless slow from 3,6% in 2005 to 3,3% in 2006 and 3,1% in 2007.

Personal… [read more]


Floating Exchange Rates Reflect Current Term Paper

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In other words, unsafe social conditions and the expectation of further outbursts result in a depreciating euro.

Yet another factor that influences a currency's worth is the monetary policies a country institutes. Obviously, policies and practices that promote stability, growth, investment, and business are those that logically attract others, thereby increasing the value of a nation's currency. For an example of this notion, one may again look to current European events and conditions. The European Central Bank (ECB) is considering an interest rate hike, the first in more than 2.5 years, but has not yet given investors many details. 'ECB Governing Council member Alex Weber said price risks had significantly risen in the past weeks, adding that the ECB decided last week that interest rates were appropriate' (Waki, 2005, 1). However, labor unions, finance ministers, and businesses (Waki, 2005) are exerting mounting pressures on ECB officials to refrain from raising these rates, claiming the failure to do so would suppress the economy. As a result of such indecision and controversy, investors and businessmen are increasingly more reluctant to involve themselves in these markets and economies.

Considering the above said conditions that are contributing to the depreciation of the euro, it is not unexpected that the U.S. dollar, another major world currency, is gaining strength. With a lackluster euro, the dollar is more appealing to investors and businessmen. Furthermore, along with improving economic conditions -- such as a recovering job market, U.S. economic officials are fueling this trend by introducing policies that make American investment and business more attractive. For example, 'playing a role in the dollar's rally is talk in the market of U.S. companies repatriating big amounts of overseas earnings to take advantage of a special tax break that expires at year-end under the Homeland Investment Act' (Waki, 2005, 1). This alone could support the dollar throughout the remainder of the year (Read, 2005), claim some analysts. In addition, the recent federal funds rate increase to 4%, implemented by Federal Reserve officials a few weeks ago, has spurred investors to shift 'funds to the dollar' (Waki, 2005, 1). Anticipated, measured rate increases, as mentioned by Greenspan, further encourage investors to reallocate funds from euros to dollars. It remains to be seen how long this situation will continue; future events will largely determine any changes.

In conclusion, there are several factors that contribute to the appreciation or depreciation of a nation's currency. Political, social, and economic conditions hold great sway over which way a currency will go, whether it will appreciate, depreciate, or remain the same. Equally important are the expectations (either positive or negative) many hold about the future conditions of a country. Current events in Europe and the United States nicely illustrate these economic principles.

References

Economist, The (2005, Oct. 1). Currency Competition. The Economist. 377(8446), 74.

Economist, The (2005, Nov. 5-11). Building Problems. The Economist. 377(8451), 53.

Read, Madlen (2005, Nov. 8). U.S. Dollar Strengthens…… [read more]


Electronic Payments Versus the Traditional Check Term Paper

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Banking

Over the past decade there has been a significant increase in the automation of banking systems around the world. One of the impacts of automation is paperless transactions; this means that an increased number of consumers are choosing to make electronic payments rather than paying with a traditional check. The purpose of this discussion is to argue whether electronic… [read more]


Creation of the Fed Term Paper

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¶ … Fed

Study in Economics

The objective of this research is to discuss the role and influences of big industrialists such as Rockefeller, Carnegie, and other big bosses of the trust that led to the creation of the Fed and to further discuss their role in the creation of the Fed or the United States Federal Reserve Bank.

The… [read more]


Inflation: Causes, Effects and the Federal Reserve Term Paper

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Inflation: Causes, Effects and the Federal Reserve Board

The objective of this work is to answer the questions of: (1) What causes inflation? (2) What are the main effects of inflation? (3) How does the Federal Reserve Board control inflation?

The first step in answering the questions set out in this research is to understand precisely what inflation actually is. Inflation can be described as "a rise in the general level of prices, as measured against some baseline of purchasing power." (Wikipedia, 2006) Furthermore inflation may be "regarded as a decline in the purchasing power of money." (Ibid) Therefore, this work will attempt to understand what causes the purchasing power of money to fall, what the effects are and what the Federal Reserve Board does to control inflation.

CAUSES OF INFLATION

According to the work entitled: "Understanding Inflation: So, What's To Worry About, Anyway? inflation is not just concerned with monetary purchasing power and in fact there are several aspects to inflation as follows: (1) Monetary inflation; (2) Price inflation; and (3) Real inflation. ((Understanding Inflation: So, What's To Worry About Anyway?, 2004) According to this work 'Real Inflation' is: "...the rate at which inflationary causes would impact price levels if all inflationary causes were considered and the time gap eliminated." (Understanding Inflation: So, What's To Worry About Anyway?, 2004) Inflationary forces are stated to be what should be actually spoken of in relation to inflation. Inflationary forces are stated to include: "all forces that increase demand without relationship to supply, or that decrease supply without any relationship to demand." (Understanding Inflation: So, What's To Worry About Anyway, 2006) Some of these 'inflationary forces' are: (1) increase in imports unaccompanied by an increase in exports; (2) Economic dependency and adverse credit shifts; and (3) a general liquidation of savings and reserve assets. (Ibid)

II. EFFECTS OF INFLATION

The work of Boyd & Champ entitled: "Inflation, Banking and Economic Growth" states several effects of inflation. The first being that: "Several economists have found that countries with high inflation rates have inefficiently small banking sectors and equity markets. This effect suggests that inflation reduces bank lending to the private sector, which is consistent with the view that a sufficiently high rate of inflation induces banks to ration credit." (2006) Another effect of inflation as stated by Boyd and Champ is that:."..inflation is negatively associated with real money market rates, real treasury bill rates, and real-time deposit rates; that is an inflation increases the real rate of return on these instruments falls." (2006) Last, but not least Boyd and Champ state…… [read more]


Real Estate Funding Chapter Term Paper

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Real Estate Funding Chapter

HOW TO FUND REAL ESTATE INVESTMENTS

CHAPTER ____ HOW TO FIND A MORTGAGE FOR RESIDENTIAL PROPERTY

So you want to buy a residential property and you aren't sure how to go about it. Don't worry - you are not alone. People all over the world want to own their own home and this desire has manifested… [read more]