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Finance & Accounting Essay

Evaluate the role played by securitization and structured finance products in the recent banking and financial crisis affecting developed economies
Housing prices started declining sharply after the boom period. A wave of repossessions was behind this trend. Banks started taking precautionary measures, cutting back on credit to cover risks to their investments. Being forced to dry up the whole sale bond market and their balance sheets from the adverse affects, banks started shrinking their portfolio. The Pension Funds suffered the severe losses being the prime purchasers of sub prime mortgage bonds. As the banks have hidden their holdings
Pages: 8 (2000 words), Essay
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Essay topic Option Pricing Theory (Finance)
Suggestion that binomial models are modified by replacing the binomial prices with the tree diagram analysis using the the Black-Scholes values, or by making it easy to payoff stocks at maturity, and the other option prices as usual. The major disadvantages of this model is that the option price converges; a result of changes that may take place in the prices. In order to obtain solutions that are exact, the Standard Richardson extrapolation may be applied .Burn (2003) states that,
Pages: 8 (2000 words), Essay
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Efficient Market Hypothersis
In these regards, it’s possible for an individual to be right or wrong about the market, but the market itself is necessarily an accurate reflection of available asset information.There are three major versions of the efficient market hypothesis, each of them resting on a different part of a spectrum of efficiency. The first version is the weak-form efficient market theory. Within this perspective all prices on past publically traded assets, including stocks, bonds, and property, already have
Pages: 8 (2000 words), Essay
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External auditing has changed to accommodate the changes in corporate governance in the UK and other countries such as South Africa, Australia, US, India and China
Any close proximity of the board with the management affects its independence. The objectivity of the shareholders and board is affected by the outside forces such as analysts, credit rating agencies by widening the gap between the shareholders and the management. In the third section the recent changes in newly established Dodd Frank Act and the effectiveness of Sarbanes-Oxley Act have been discussed.Audit of financial statements involves verification of a firm’s financial statements and an
Pages: 14 (3500 words), Essay
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Explore the causes of the current financial crisis that started in 2007. Which theoretical view(s) seem to be more relevant in explaining its causes
As a result of this crisis, governments have stepped in to provide bailouts for these banks and other financial institutions (Banking Law Committee, 2009). The gravity and the volume of negative financial outcomes at that time, coupled with the impotency of the remedies being carried out also forced the authorities to consider the origins of the crisis and the market tools by which the crisis could be contained and managed. The causes of the financial crisis which started in 2007 shall be
Pages: 9 (2250 words), Essay
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European Sovereign Debt Crisis
An explanation for the spreads in bond yields are: an aggregate risk factor, the country credit risk and the chain effect from the situation in Greece (Santis, 2012). If the last factor is straightforward, the first two factors need to be explained. The first factor i. aggregate risk is an indicator of changes in monetary policy, as well as global situation and investors risk aversion (Wall, Minocha & Rees, 2010). On the other hand, the country risk factor is an indicator of the country’s
Pages: 8 (2000 words), Essay
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Evaluate Sainsbury plcs financial strategy
To aid in understanding of Sainsbury dividend policy, this paper acknowledges the importance of reviewing theories on dividend policies. With empirical research continuously being conducted by scholars on dividend policy, no consensus has ever emerged has scholars continuously keep disagreeing about the same empirical evidence. They all agree that dividend policy refers to management practices in making decisions on the criteria and amount of dividends to be paid to shareholders
Pages: 8 (2000 words), Essay
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Explain new approaches in respect of how a firm could finance takeover and acquisition. Identify issues with such approaches, from the regulatory, market, and firm, and shareholder perspectives
These days, once a merger deal is closed, lawsuits are normally closed. However, some plaintiffs have come out strongly in mergers to refine the way they operate. They insist on keeping such litigation alive even after they have been closed. This is achieved through having extensive discovery more so against the acquirer executives in control of the purse strings.There are a number reasons cited by firms for mergers and takeovers. However, the most prevalent reasoning cited by majority of the
Pages: 11 (2750 words), Essay
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Exchange Rates
The third and final case of currency risk mentioned above is economic risk. This risk overall affects the value of the firm in question. It refers to how the change in exchange rates affects the competitiveness of a business on an international scale. To make it simpler to understand, it’s not only the appreciation -or depreciation of a foreign currency to the home currency that affects a company’s operations, but also how a competitor country’s currency performs in response to the home
Pages: 8 (2000 words), Essay
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Essay 2 Stakeholders
They have been behind the full implementation of the Hello Money mobile banking service. These stakeholders are high influence/low importance.SECONDARY STAKEHOLDERS: my secondary stakeholder is Mr. Harold, an accountant at one of the Barclays Bank local branches. Harold has a lot to gain or lose from the introduction of the Hello Money service because the service prompt adjustments in the accounting systems. Harold does not have an authority to make decision for Barclays Bank, yet he is
Pages: 4 (1000 words), Essay
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ETHICS AND FINANCIAL SERVICES
Some of the manipulations included erasing the accounting records that recorded the liabilities and expenses of the company at the end of each year.The Livent’s accounting staff engaged into an accounting scam of transferring the preproduction costs of existing show to shows that was in production. This transfer manipulated the company to comprehend the cost of the major items used in production. To reduce the costs of preproduction, Livent’s accounting team transferred the costs to fixed
Pages: 5 (1250 words), Essay
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Explain and critically evaluation the relationship between exchange rates and interest rates
With this understanding the next section deals with the relationship of exchange rates and interest rates in countries.There is a strong link between the interest rates and the exchange rates and this has strongly dominated the theoretical and the empirical literature in open economies of both developing and developed countries. It has been observed in present times the variability of interest rates have increased both in relation to itself and in relation with the interest rates (Sánchez,
Pages: 5 (1250 words), Essay
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Evaluate the foreign exchange exposure aspects of the American Creations investment project on behalf of Bellingham plc. Advise the firm on how their foreign exchange exposure might arise, its possible magnitude, and, how it could be managed should the
Withdraw from the race of being competitive, chances are that they will see the changing business climate as a threat because they will find it difficult to cope (Carmeli, 2003). For Bellingham plc, the need to take charge of the new globalised business has been realised as an important stake in surviving in business. This has partly informed the company’s current business purpose, which is to undertake massive international diversification and expansion. This business purpose has been
Pages: 7 (1750 words), Essay
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ERP in action Challenges and benefits for management control in SME context
These changes are challenged by individuals, groups, and even organizational structure as they are used to current procedures and conditions and therefore resist accepting new change.ERP systems currently constitute the fundamental technological infrastructure for accounting and management control systems in organizations. Although they are not a pure accounting system, they are centrally bound and constructed by process of planning and cybernetic control. Therefore, according to Granlund,
Pages: 6 (1500 words), Essay
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Equity Valuation Project
Clorox ranked number 461 in the recent Fortune’s 2013 500 list with net sales of $5. The company has had various achievements in the past; in 2008, it happened to be the first to develop and launch a natural cleaning line into the mainstream cleaning aisle. In 2011, it became the first in the adoption of the corporate trend in the integration of corporate social responsibility (Carroll, Archie, and Buchholtz 125).Various methods are to estimate the approximate value of a company stock. The
Pages: 6 (1500 words), Essay
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Explain how the development and growth of the stock market effects the real economy
A representative of business activity carries out buying, selling, exchange or valuation on behalf of his employer to execute exchange activity. Thus companies are not physically available or do not come with their active products and investment plans but they perform these transactions virtually through their representatives.A rational response to the concept of stock exchange and its activities can be transpired as effectiveness and vibrancy of economic activities in a market. However it is
Pages: 12 (3000 words), Essay
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Essay questions
These figures had reversed by 2000. Moreover, it was further observed that women started working within six months of child birth. According to Elizabeth Warren, while real income of men grew over years by about 1 percent, total household income got a boost of 75 percent because of working females (Zhu 1-37).It is ironical that even though total income of families has risen dramatically, propensity towards saving has reduced greatly. By 2000, individuals were saving a very meager amount of
Pages: 7 (1750 words), Essay
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European Sovereign Debt Crisis and its impact on financial markets and institutions
On the other hand the fiscal policy deals with the collection of taxes and expenditure. In this entire mix what is important to note is that a country or rather a government is supposed to spend as much as it is collecting in revenue and anything spent above the collected amount is borrowed and referred to as deficit spending.The solidification of the uniformity with the currency being the Euro the coming together of the European countries looked solid (Favero et. All the countries were growing
Pages: 9 (2250 words), Essay
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Evaluate Morrisons financial strategy
Financial standing accelerated its investments in opening new stores, software’s and intangible assets in 2011, a factor that led to increase in gearing ratio to 27.0% in 2012 and 42% in 2013, owing to the prevailing hard economic times. Therefore, it is observed that its debt-equity ratio stands at its high levels during the closure of 2013 financial year.External borrowing in terms of issues of shares is it major source of debt finance. It is able to borrow through this because it assures
Pages: 7 (1750 words), Essay
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Explaining the role of Analytical Review Procedures in the audit of financial statements
In order for analytical review procedures to be effective in any audit process, they need to follow certain guidelines and best practices. These include being able to give a determination of the trends that are useful to the business and developing sensible relationships derived from historical operations of the business that will serve as guidelines in identifying future changes. Examples of these analytical procedures include the comparison of business revenue for a period of ten years and
Pages: 4 (1000 words), Essay
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