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Untitled2_8 - 24 Principles of banking and finance...

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understand why financial intermediaries exist, and discuss the role of transaction costs and information asymmetry theories in providing an economic justification explain why banks need regulation, and illustrate the key reasons for and against the regulation of banking systems discuss the main types of risks faced by banks, and use the main techniques employed by banks to manage their risks explain how to value real assets and financial assets, and use the key capital budgeting techniques (Net Present Value and Internal Rate or Return) explain how to value financial assets (bonds and stocks) understand how risk affects the return of a risky asset, and hence how risk affects the value of the asset in equilibrium under the fundamental asset pricing paradigms (Capital Asset Pricing Model and Asset Pricing Theory) discuss whether stock prices reflect all available information, and evaluate the empirical evidence on informational efficiency in financial markets.
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