Business management> Notes > Financial Economics (Second Edition) by Bodie, Zvi, Robert C. Merton, and David L. Cleeton 2009
In implementing their decisions people make use of the financial system, defined as the set of markets and other institutions used for financial contracting and the exchange of assets and risks. The financial system includes the markets for stocks, bonds, and other financial instruments; financial intermediaries (such as banks and insurance companies); financial service firms (such as financial advisory firms); and the regulatory bodies that govern all of these institutions. The study of how the financial system evolves over time is an important part of the subject matter of finance. Finance theory consists of a set of concepts that help you to organize your thinking about how to allocate resources over time and a set of quantitative models to help you evaluate alternatives, make decisions, and implement them. The same basic concepts and quantitative models apply at all levels of decision making, from your decision to lease a car or to start a business, to the decision of the CFO of a major corporation to enter the telecommunications business, to the decision of the World Bank about which development projects to finance. A basic tenet of finance is that the ultimate function of the system is to satisfy people's consumption preferences, including all the basic necessities of life, such as food, clothing, and shelter. Economic organizations such as firms and governments exist in order to facilitate the achievement of that ultimate function[Show More]
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Fixed income securities: Securities that generate predetermined and fixed periodic payments. Examples include bonds, loans and mortgages, preferred stock etc. We focus on bonds. Maturity: the length of time for which a bond exists. Face value: the principal amount that is promised to be repaid at maturity. Coupon payments: the periodic interests generated by a bond. Coupon rate: the ratio of coupon payments over the face value. Usually expressed in annual terms.
Study consumption patterns over one’s life time. A topic of microeconomics, macroeconomics, and financial economics. The latter two fields build their theories on the micro foundations. Key results: Consumers smooth their consumption over lifetime; they save when they are rich, and dissave when they are poor. Permanent income hypothesis Consumption is largely determined by permanent income, rather than transitory income.
I. ABCS ABOUT STOCK A. COMMON STOCK: IMPORTANT FEATURES Represents ownership. Also known as equity or shares. A natural consequence of corporations. Shares are residual claims. Creditors and preferred shareholders (which will be introduced soon) must be paid as scheduled before common stockholders can receive any payments. Has limited liability. Common shareholders may lose their initial investment but not more. Common stock typically has voting rights. One share one vote. Internet technology has made voting easier for individual stockholders. The majority rule usually applies. But some decisions require the approval from more than one half of the stockholders.
Supply Chain Supply chain is a system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer. Supply chain activities involve the transformation of natural resources, raw materials, and components into a finished product that is delivered to the end customer
In this lecture, we will cover: Decisions with multiple objectives and attributes Criteria for fundamental objectives and their attributes Trading off conflicting objectives The additive utility function Assessing (quantifying) utility functions, i.e., scores, and weights
Research was conducted to develop a capability for quantification and assessr-nt of in-flight pilot performance for utilization in Under¬ graduate Pilot Training (UPT). This feasibility effort was directed to overcoming the disadvantages of the traditional subjective rating of a pilot trainee's performance by the instructor pilot. This was accomplished through the development of an automated, objective performance measurement system that possesses the characteristics of reliability, validity, and sensitivity.
This research has evaluated the rules, guidelines and regulations related to docking a ship in floating-graving yards. Historical failure data analysis is carried out to identify associated components, equipment and the area of defects related to ship docking evolution problems. The current status of ship docking evolution is reviewed and possible sources which cause accidents are recognised. The major problems identified in this research are associated with risk modelling under circumstances where high levels of uncertainty exist. Following the identification of research needs, this work has developed several analytical models for the application of Formal Safety Assessment (FSA). Such models are subsequently demonstrated by their corresponding case studies with regards to application of FSA for ship docking evolution.
Operations challenges by industry group Advanced industries Most affected by material shortages, primarily due to interconnected supply chains spanning multiple geographies. An auto company in commented, “ We are facing raw-material shortages including aluminum and imported chemicals.”
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