Financial Fitness Bank reported a debt-to-equity ratio of 1.75× at the end of 2021. If the firm’s total assets at yearend were $25 million, how much of its assets are financed with debt? How much with equity?
> Is a business plan really necessary even for a very small startup business? How much market analysis and competitive analysis should the new entrepreneur conduct prior to startup?
> Give some examples of things the new entrepreneur should immediately investigate in order to ensure to the maximum extent possible that the business will “get off the ground.”
> What criteria do you see as most critical when differentiating an idea from an opportunity?
> What are some examples of consumer preferences and values? What are some examples of things the new business owner can do to ensure capturing some of the market for the good or service being produced?
> Entrepreneurs get their ideas for business startups from various sources. Elaborate on these sources, and analyze which ones are the most reliable indicators for the new business owner with regard to future success.
> Is creative destruction just another economic theory for the foundation of capitalism? Build a case supporting your answer.
> Explain the concept “window of opportunity” as it relates to new startups from idea conception through the final decision about whether or not to turn the idea into a reality.
> Many entrepreneurs test the waters of a market by starting a sideline business. What are the advantages and disadvantages of selling items on Internet auctions like eBay? Is a person who regularly has 20 or 25 items for sale at any given time an entrepre
> Define “hypergrowth” companies, and evaluate the reasons for their phenomenal rate of growth. What are the most valid explanations for the rate of success found in these companies?
> Compare and contrast the advantages and disadvantages of starting a business from the ground up. Be sure to include the different types of businesses in your analysis.
> Think of an activity that you love to do; it could be a personal interest or a hobby. How could you turn your passion for this activity into a business? What questions would you have to answer for yourself before you took this step? What triggering event
> If personal characteristics or personality traits do not predict who will be a successful entrepreneur, why are they significant to the study of entrepreneurship or small business management? Which characteristics do you think are most important?
> Explain why people who own a small business may not enjoy pure independence.
> If a friend told you that entrepreneurs are high risk takers, how would you set the story straight?
> Why might personality characteristics may be good predictors of who will be a successful entrepreneur?
> Define “at-will” employment status.
> What financial risks would Mighty Leaf take by pursuing a supermarket strategy? 2. How could they moderate cash flow problems? 3. What would you recommend Mighty Leaf do? Be sure to justify your recommendation?
> Explain the four components of an effective disciplinary system.
> What factors influence the type and amount of employee benefits that a small business can offer?
> List the advantages of a flexible benefit package to employees and to the employer.
> Review the section on training new employees. Give examples of types of jobs that would best lend themselves to each training method.
> What are the advantages and disadvantages of giving content away? 2. What if the new strategy didn’t work and the content was now free? 3. What would you advise Skurman to do and still have a viable company?
> Could a new CEO do better? 2. Would you recommend the Mirzas hire their own boss? What would that new job description include? 3. If hiring a CEO is not the answer, what should they do to get their business to the next level?
> Hoffman's gut told him to litigate aggressively. But do you think that was a smart move? 2. Should he settle? Or should he press his case before a judge? 3. Put yourself in Hoffman's place. What would you do?
> Why is the executive summary the most important section of the business plan?
> Why wouldn’t a 100-page business plan be four times better than a 25-page business plan?
> Why do some prospective business owners refuse to plan?
> Is workforce diversity as important to small businesses as it is to big businesses? Why or why not?
> What are your personal screen inspirations? What lessons do these or other movies provide in running a small business? 2. In addition to the movies cited in this case, think of other titles for business lessons such as Risky Business, Pirates of Silicon
> Describe applications of artificial intelligence and machine learning in the financial services industry.
> What is a difference between Bitcoin and Ethereum?
> What are the risks associated with DLT?
> What is the duration of a 20-year 8 percent coupon (paid semiannually) Treasury bond (deliverable against the Treasury bond futures contract) selling at par? b. What is the predicted impact on the Treasury bond price based on its duration if interest
> Calculate the leverage-adjusted duration gap of an FI that has assets of $1 million invested in 30-year, 10 percent semiannual coupon Treasury bonds selling at par and whose duration has been estimated at 9.94 years. It has liabilities of $900,000 fi
> What is the duration of a two-year bond that pays an annual coupon of 10 percent and whose current yield to maturity is 14 percent? Use $1,000 as the face value. b. What is the expected change in the price of the bond if interest rates are expected to
> FirstBank has the following balance sheet (in millions of dollars): Calculate the NSFR for FirstBank.
> WallsFarther Bank has the following balance sheet (in millions of dollars). Cash inflows over the next 30 days from the FI’s performing assets are $5.5 million. Calculate the LCR for WallsFarther Bank.
> Calculate the following ratios for Lake of Egypt Marina Inc. as of year-end 2022. Using these ratios for Lake of Egypt Marina Inc. and the industry, what can you conclude about Lake of Egypt Marina’s financial performance for 2022? (Ra
> How might we determine whether these ratios reflect a well-managed, creditworthy company?
> How does distributed ledger technology (DLT) work? What is blockchain?
> Use the balance sheet and income statement below to construct a statement of cash flows for 2022 for Clancy’s Dog Biscuit Corp.
> In 2021, Webb Sports Shop had cash flows from investing activities of $2,567,000 and cash flows from financing activities of $3,459,000. The balance in the firm’s cash account was $950,000 at the beginning of 2021 and $1,025,000 at the end of the year. C
> Consider the following income statement for Watchover U Savings Inc. (in millions): a. What is WatchoverU’s expected net interest income at year-end? b. What will be the net interest income at year-end if interest rates rise by 2 perc
> XYZ Inc. has issued 10 million new shares of stock. An investment bank agrees to underwrite these shares on a best efforts basis. The investment bank is able to sell 8.4 million shares for $27 per share, and it charges XYZ $0.675 per share sold. How m
> What is the amount of the annuity purchase required if you wish to receive a fixed payment of $200,000 for 20 years? Assume that the annuity will earn 10 percent per year. b. Calculate the annual cash flows (annuity payments) from a fixed-payment ann
> The average daily net transaction accounts of a local bank during the most recent reserve computation period is $325 million. The amount of average daily reserves at the Fed during the reserve maintenance period is $24.60 million, and the average dai
> City Bank has estimated that its average daily net transaction accounts balance over the recent 14-day computation period was $225 million. The average daily balance with the Fed over the 14-day maintenance period was $8 million, and the average daily
> Two depository institutions have composite CAMELS ratings of 1 or 2 and are “well capitalized.” Thus, each institution falls into the FDIC Risk Category I deposit insurance assessment scheme. Further, the institutions
> Two depository institutions have composite CAMELS ratings of 1 or 2 and are “well capitalized.” Thus, each institution falls into the FDIC Risk Category I deposit insurance assessment scheme. Further, the institutions
> What is fiat currency? Is Bitcoin a fiat currency?
> Financial analysts forecast Safeco Corp. (SAF) growth for the future to be 10 percent. Safeco’s recent dividend was $1.20. What is the fair present value of Safeco stock if the required rate of return is 12 percent?
> You have been asked to analyze First Union Bank. You have only the following information on the bank at year-end 2021: Net income is $250,000, total debt is $2.5 million, and the bank’s debt ratio is 55 percent. What is First Union Bank’s ROE for 202
> A preferred stock from Duquesne Light Company (DQUPRA) pays $2.10 in annual dividends. If the required rate of return on the preferred stock is 5.4 percent, what is the fair present value of the stock?
> How many ExxonMobil May 2020 $40.00 put options were outstanding at the open of trading on March 13, 2020? b. What was the settlement price of a 10-year Treasury note May 138.00 futures call option on March 13, 2020? c. What was the closing price of a
> Refer to Table 10–4. a. What was the settlement price on the September 2020 2-year U.S. Treasury notes futures contract on March 13, 2020? b. How many five-year Treasury note futures contracts traded on March 13, 2020? c. What is the
> What was the closing price on the CVS 5.050 percent coupon bonds on January 10, 2020? b. What was the S&P bond rating on Las Vegas Sands Corp 3.200 percent coupon bonds maturing in 2024 on January 10, 2020? c. What was the closing price on Petrole
> Refer to Table 6–7. Verify the yield of 3.984 percent on the Viacom Inc. bonds with a coupon of 4.375 percent and a maturity date of March 15, 2043.
> The overnight fed funds rate on December 19, 2019, was 1.55 percent. Compute the bond equivalent rate and the effective annual return on the fed funds as of December 19, 2019.
> Jones Bank has been borrowing in the U.S. markets and lending abroad, thereby incurring foreign exchange risk. In a recent transaction, it issued a one-year $5 million CD at 4 percent and is planning to fund a loan in yen at 6 percent for a 2 percent
> Suppose that, instead of funding the $200 million investment in 10 percent German loans with U.S. CDs, the FI manager in Problem 10 funds the German loans with $200 million equivalent one-year euro CDs at a rate of 7 percent. Now the balance sheet of
> What are the three purposes of money? Does cryptocurrency fulfill these purposes?
> On March 13, 2020, you convert 500,000 U.S. dollars to Japanese yen in the spot foreign exchange market and purchase a six-month forward contract to convert yen into dollars. How much will you receive in U.S. dollars at the end of six months? Use the
> Refer to the stock market quote in Table 8–1. a. What was the closing stock price for Genprex Inc. on February 21, 2020? b. What was the dollar change in Oncolytics Biotech's stock price from February 20, 2020, and February 21, 2020?
> Calculate the ask price of the T-bill maturing on February 20, 2020, as of December 27, 2019. b. Calculate the bid price of the T-bill maturing on April 30, 2020, as of December 27, 2019.
> Refer to the stock market quote in Table 8–1. a. What was the closing stock price for Celldex Therapeutics on February 21, 2020? b. What was the percentage change in Dropbox's stock price from February 20, 2020, and February 21, 2020?
> Consider an investor who, on January 1, 2022, purchases a TIPS bond with an original principal of $100,000, an 8 percent annual (or 4 percent semiannual) coupon rate, and 10 years to maturity. a. If the semiannual inflation rate during the first six
> On July 10, 2022, you purchase a $10,000 T-note that matures on December 31, 2028 (settlement occurs one day after purchase, so you receive actual ownership of the bond on July 11, 2022). The coupon rate on the T-note is 2.125 percent and the current
> On October 5, 2022, you purchase a $10,000 T-note that matures on August 15, 2031 (settlement occurs one day after purchase, so you receive actual ownership of the bond on October 6, 2022). The coupon rate on the T-note is 4.375 percent and the curre
> Verify the May 23, 2016, asked yield of 1.09 percent on the Treasury bond, stripped principal STRIPS maturing August 2019. Use a one-day settlement period from the date of purchase (i.e., ownership occurs on Wednesday, May 24, 2016). The STRIPS matur
> Refer to Table 9–1. a. On February 13, 2020, you purchased a British pound– denominated CD by converting $1 million to pounds at a rate of 0.8226 pound for U.S. dollars. It is now March 13, 2020. Has the U.S. dollar
> Refer to Table 9–1. a. What was the spot exchange rate of Canadian dollars for U.S. dollars (USD/CAD) on March 13, 2020? b. What was the six-month forward exchange rate of Canadian dollars for U.S. dollars (USD/CAD) on March 13, 2020?
> What is cryptocurrency? Explain how cryptocurrency differs from a crypto-asset.
> Which of the capital market instruments is the largest in terms of dollar amount outstanding in 2019?
> Describe the advantages and disadvantages of incumbent banks compared to fintechs.
> Which of the money market instruments is the largest in terms of dollar amount outstanding in 2019?
> What were the demand factors that contributed to the recent emergence of fintechs?
> Classify the following financial instruments as money market securities or capital market securities: a. Banker’s acceptances b. Commercial paper c. Common stock d. Corporate bonds e. Mortgages f. Negotiable certificates of deposit g. Repurchase agreemen
> Classify the following transactions as taking place in the primary or secondary markets: a. IBM issues $200 million of new common stock. b. The New Company issues $50 million of common stock in an IPO. c. IBM sells $5 million of GM preferred stock out
> What is fintech risk?
> What are four categories of fintech innovations according to the Basel Committee of Banking Supervision (BCBS)? Give specific examples for each category of innovations.
> What is banking-as-a-service? How are banks embracing a platform-based business model?
> Describe the advantages and disadvantages of fintechs compared to incumbent banks.
> What are peer-to-peer (P2P) payments? What P2P apps have you used recently?
> Explain the European Union’s General Data Protection Regulation (GDPR) and how it might benefit the fintechs.
> What were the supply factors that contributed to the recent emergence of fintechs?
> Which country has the highest fintech adoption rate?
> Explain the European Union’s Open Banking standards and how they might benefit the fintechs.
> Explain the European Union’s Payment Services Directive 2 (PSD2) and how it might benefit the fintechs.
> What changes did the FDIC make to the deposit insurance assessment scheme for DIs in 2007?
> What is a fintech sandbox?
> Explain one of the reasons high-frequency trading (HFT) has hit a speed bump. Do you think fintechs will experience the same difficulties HFT firms have experienced?
> What is crowdfunding? Have you used any crowdfunding apps recently?
> Describe applications of Internet-of-things (IoT) in the financial services industry.
> Refer to Table 10–4. a. If you think five-year Treasury note prices will fall between March 13, 2020 and June 2020, what type of futures position would you take? b. If you think inflation in Japan will increase by more than that in t
> Neve Commercial Bank is the only bank in the town of York, Pennsylvania. On a typical Friday, an average of 10 customers per hour arrive at the bank to transact business. There is currently one teller at the bank, and the average time required to transac
> Virginia’s Ron McPherson Electronics Corporation retains a service crew to repair machine breakdowns that occur on average (=3 per 8-hour workday (approximately Poisson in nature). The crew can service an average of (= 8 machines per workday, with a repa
> Automobiles arrive at the drive-through window at the downtown Baton Rouge, Louisiana, post office at the rate of 4 every 10 minutes. The average service time is 2 minutes. The Poisson distribution is appropriate for the arrival rate and service times ar
> Calls arrive at Lynn Ann Fish’s hotel switchboard at a rate of 2 per minute. The average time to handle each is 20 seconds. There is only one switchboard operator at the current time. The Poisson and negative exponential distributions appear to be releva
> The pharmacist at Arnold Palmer Hospital, Wende Huehn-Brown, receives 12 requests for prescriptions each hour, Poisson distributed. It takes her a mean time of 4 minutes to fill each, following a negative exponential distribution. Use the waiting-line ta
> Dr. Tarun Gupta, a Michigan vet, is running a rabies vaccination clinic for dogs at the local grade school. Tarun can “shoot” a dog every 3 minutes. It is estimated that the dogs will arrive independently and randomly throughout the day at a rate of one
