Suppose Alex would like to use $8,000 of his savings to make a financial investment.One way of making a financial investment is to purchase stock or bonds from a private company.finance. Buying a bondSuppose NanoSpeck, a biotechnology firm, is selling bonds to raise money for a new lab-a practice known asIssued by NanoSpeck would give Alexthe firm. In the event that NanoSpeck runs into financial difficulty,will be paid first.Suppose instead Alex decides to buy 100 shares of NanoSpeck stock.Which of the following statements are correct? Check all that apply.O An increase in the perceived profitability of NanoSpeck will likely cause the value of Alex's shares to rise.ONanoSpeck earns revenue when Alex purchases 100 shares, even if he purchases them ftrom an existing shareholder.The Dow Jones Industrial Average is an example of a stock exchange where he can purchase NanoSpeck stock.higherAlternatively, Alex could make a financial Investment by purchasing bonds issued by the government of Japan.lowerInterest rateAssuming that everything else is equal, a bond issued by a government that is engaged in a civir war most likely pays athan a bond issued by the government of Japan.

For the purpose of making investments, alternatives that can be used are: Purchase of shares of…

Answered: Suppose Alex would like to use $8,000…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Assume the role of a financial advisor. You have 3 new clients. Each of them came to you with $100,000 to invest. You suggest to each other them to put the money into mutual funds. What mutual funds do you suggest for each client and why. Support your recommendations. Jose - 29 Years of Age. Working. Makes $250,000 a year. Married. No kids. No immediate need for cash. Investing Risk Tolerance = High. Cynthia - 49. Single. 3 kids. Working. Makes a modest annual income. Ages 13, 15, 17. All kids plan to attend college. Plans to use some of this money to help pay for college tuition. Investing Risk Tolerance = Moderate. Jackie - 80. Retired. Receives a modest retirement income. Needs money to help pay monthly expenses. She is healthy. She also has three older siblings in their 90's. Investing Risk Tolerance Low.
Which of the following is a financial investment that represents a loan made to a private business? Becca's Bakery purchases mortgage backed securities. Becca's Bakery gets an investor from the show Shark Tank. Becca's Bakery issues new bonds that they sell to the public. O Becca's Bakery issues stock and sells shares to investors.
Suppose you are a Chief Financial Officer of Burger Joint In. Although burger joint Inc. we'll need a large amount of funds in a couple of years to finance an expansion of its burger restaurants into the European market for now it just needs to find a good place to” park” its money. Suppose that burger joint has 10 million in cash on hand today. Calculate the present discount value of the following options. You take the $10 million and put it under your mattress at home. Two years from now, you take the money out and return it to burger joints corporate offices. Assume that your mattress is quite safe and that the yearly discount rate is 5%.
Imagine that you have worked every summer for the last four years in order to save money to buy a car. You have $23,000 deposited in a savings account at your local bank. One day, you turn on the news and discover that the stock market is crashing and people are rushing to banks to withdraw all of their money. Your best course of action is to:
Your younger brother is very concerned about investment performance, but he is willing to tolerate some risk. He decides to invest $100,000 in a mutual fund that will earn 10% per year. The proceeds will be accumulated as a lump sum and paid out at the end of year 10. Based on the data given below under Note. what is today’s purchasing power equivalent of your younger brother’s investment? Note: Your older brother is concerned more about investment safety than about investment performance. For example, he has invested $100,000 in safe 10-year corporate AAA bonds yielding an average of 6% per year, payable each year. His effective income tax rate is 33%, and inflation will average 3% per year.
Our textbook claims that one of the key services banks provide is maturity intermediation: what exactly does this mean? (Choose an answer from the list below; only one is correct.) Reference: Chapter 11 and/or Chapter 1 Banks borrow money from their younger customers and lend it to their older customers. Banks gather small deposits and use them to make large investments, allowing small investors to collectively buy large assets. Banks are funded with deposits that they promise to return on demand but use them to make long-term loans, which creates a mismatch in the maturities of their assets & liabilities.
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Armbrust Corporation is the maker of fine fitness equipment. Armbrust's bank has been pressuring the firm to improve its liquidity. Which of the following actions proposed by the CFO do you believe will actually achieve this objective? a. Sell new equity and use the proceeds to purchase a new plant site. -Select- b. Use cash and marketable securities to pay off short-term bank borrowings and accounts payable. -Select- v c. Borrow long-term and use the proceeds to pay off short-term debt. -Select- v d. Sell surplus fixed assets and invest the proceeds in marketable securities. -Select- V

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