-NYSE, American, Pacific, Chicago, Philadelphia
-Central trading location
-Only members can use the exchange
-Over the counter Markets
-No central trading location.
-Collection of markets with no
-Provide retirement programs for business as part of employee benefit programs.
-Obtain money from employee and employer contributions during employess working
years, then provide monthly retirement payments.
-Sell shares to
-Ordinary Annuity Payments or receipts occur at the end of each period.
-Annuity Due Payments or receipts occur at the beginning of each period.
Ordinary Annuities & Annuities Due:
-PVA: PV is calculated one (or more) periods before the first cash flow.
Multiple Cash Flows-Solving for the TVM problems with multiple cash flows.
-Many business situations call for computing present value of a series of expected
future cash flows.
-determining market value of security
-deciding whether to make capital invest
The ratio of the standard deviation of distribution to the mean of the distribution.
-Measure of relative risk
Expected return of portfolio made up of two assets is just a weighted average of the
expected returns of the individual
A firms financial statements can be analyzed from perspective of different stakeholders.
-Important perspectives: 1) Stockholder, 2) Manager, and 3) Creditor.
-Centers on value of stock held
-Interest in the financial statements
The Financial Environment and the Level of Interest Rates
Financial System at Work:
-Money is aggregated in small amounts and loaned in large amounts
-Financial markets benefit consumers
Moving Funds from Lenders to Borrowers:
-Asset turnover ratios
-Measure how efficiently firm management uses assets to generate sales.
-Efficiency Ratios focus on inventory, receivables and use of fixed and total assets.
-Used by management to identify areas of inefficiency.
Earning per share (EPS) ratio measures income after taxes generated by firm for each
share outstanding. = Net income/Shares outstanding
Price-earnings (P/E) ratio ties firms earning per share to price per share.
P/E ratio= Price per share/EPS
Three ways t
Substitute teacher mainly went over financial calculator problems.
Usefulness of Amortization:
Determine Interest Expense
Companies use to determine best method
Solving Mixed Flows using CF registry:
For CFo: This is always the cash flow occurring a