Funding Circle Listed on the London Stock Exchange Comment Funding Circle is a peer-to-peer lender which listed on the London Stock Exchange in September 2018.
Funding Circle Listed on the London Stock Exchange
The company provides an online marketplace that enables investors to lend directly to small companies. The company claims that ‘by lending directly to businesses through Funding Circle, investors can… earn attractive returns to better provide for their future. Businesses get fast, easy access to funding to grow, create jobs, support local communities and drive the economy forward’
[https://www.fundingcircle.com/uk/about-us/]
Required
Comment critically on the role of the financial manager in selecting suitable sources of finance for their organisation, in light of the increasingly wide range of financial products (such as peer-to-peer lending) now available to businesses. YOUR answer Must refer to Capital Structure Theories where appropriate.
Financial Manager Answering CEO Question Suppose that you are a financial manager at a large international company.
Financial Manager Answering CEO Question
Your CEO (Chief Executive Officer) wants to ask you a few questions related to corporate finance. Please see the CEO’s email to you. CEO questions:
Question 1: I have been thinking about what capital budgeting techniques to use for our investment selection criteria. Please explain why IRR (Internal Rate of Return) is not the best capital budgeting technique.
– Question 2: In relation to the estimation of cost of equity, please compare the dividend growth model and security market line approaches.
Post a brief description of the government organization you selected. Describe the ethical issue or violation you identified as it relates to finance or budgeting. Using the American Society for Public Administration (ASPA) Code of Ethics or the ethical guidelines within your organization and/or nation, explain why it is/was an ethical issue or violation. Then, explain how the organization is addressing or has addressed it. If a violation has not occurred, how would you recommend preventing one?
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Using Yahoo Finance or any credible source retrieve the annual data, namely, short income statements, and short balance sheet, for a major corporation during the past 20 years. Provide this data and construct the graph of the sales during these years. Forecast sales in the future 3 years, and provide brief proforma statements based on best case, worst case, and normal case scenarios. Explain your work in detail, and cite all references used for development of the content.
Use APA format when citing and writing references.
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US Taxation of Multinational Transactions Problem 1. Tax Time. Smithy International Inc. is a domestic corporation that earns $50 million of income from operations from U.S. sources and $50 million of income from operations from foreign sources, $40M of the foreign source income is earned through a qualified 10% owned foreign subsidiary in Luxemborg called Smithy-Lux and $10M its foreign source income is earned through a branch in Canada.
US Taxation of Multinational Transactions
Smithy also pays $1,000,000 in interest (not deducted to determine income from domestic or foreign operations above) on its company line of credit to Deutsch Bank, a foreign bank with 15% U.S. operations.
a. Assuming Smithy pays $1,500,000 in taxes on its Canadian income in Canada, what will be the U.S. tax liability associated with Smithy’s income from its Canadian branch?
US Taxation of Multinational Transactions Income
How might Smithy reduce its tax liability associated with this income?
b. If Smithy-Lux is taxed as a partnership in Luxemborg and as a corporation in the U.S., what are the tax consequences under the default rules? How might the OECD BEPS program close this gap to ensure that profits in foreign subsidiaries do not “disappear” from taxation?
c. Assume that included in Smithy-Lux’s income is a $5M royalty paid by Smithy (deducted by Smithy against its U.S. income) for intellectual property that was assigned to Smithy-Lux five years ago. If the tax rate in Luxemborg is only 2.5% then how much taxes savings does this royalty arrangement generate for Smithy (disregarding the FDII, GILTI, and BEAT)? If Smithy’s total deductions are $75M, calculate how the BEAT would likely impact the tax incentives for this royalty arrangement. Also, describe how FDII and GILTI might impact this and future similar royalty arrangements.
Real Estate Investment report in word of 3500-4000 words as well as calculations in excel.
Scenario
You are an investment surveyor at ‘UCEM Investments’, a boutique investment firm based in
Edinburgh, Scotland. Your day-to-day responsibilities include the management of several client investment portfolios for international investors.
As part of your remit you are responsible for the management of ‘The Athena’ portfolio, a mixed
portfolio of UK investments.
Your client on this portfolio, ‘Dreamcatcher Investments’, is based in Hong Kong. They are long-term investors and are generally risk averse regarding their real estate investments. As a result,
they generally acquire Core or Core Plus type investments.
Further details about the ‘Athena’ portfolio are available in Appendix 1.
Cash funds of approximately £50m have become available within ‘The Athena’ portfolio and your
client has instructed you to invest these funds directly into real estate. To this end you have just
received details from a broker on ‘Unit 5 Primrose Way Distribution Park, London’, an industrial
investment opportunity, which is currently available ‘off market’.
You have been instructed by your client, ‘Dreamcatcher Investments’, to prepare a fully referenced client report giving recommendations and conclusions both on the performance of your client’s
existing investment portfolio (‘The Athena portfolio) and on the key considerations for the creation of a new specialist investment portfolio to be known as ‘The Poseidon’ portfolio.
For ‘The Athena’ portfolio you should report on:
the possible acquisition of Unit 5 Primrose Distribution Park. Prepare a discounted cash flow
(DCF) appraisal on this property to determine whether your client should acquire it for the
‘Athena’ portfolio. Your appraisal should include sensitivity and probability risk analysis on
this investment proposition.
the performance of the ‘Athena’ portfolio over the last seven years bench-marked against the
in-house ‘All-property’ index.
recommendations on how to re-balance the portfolio in accordance with the new five years strategy.
For ‘The Poseidon’ portfolio you should report on:
how to create, manage and measure the performance of the new ‘Poseidon’ portfolio of Core
German and French properties.
an investment strategy and a set of objectives for this fund. You are required to make all relevant assumptions explicit regarding the strategy and objectives.
a summary assessment that identifies the key trends currently affecting the funding market
for real estate investments in France and Germany. Your assessment should make recommendations on funding options for your client.
a property search undertaken by you in the German and French commercial property investment markets in which you identify one ‘green’ commercial property investment currently ‘For sale’ that you believe would be a potentially suitable acquisition for the new portfolio.
Prepare a profile (10–15 points) on this property summarising the key characteristics of this investment and provide recommendations to your client on why it might be suitable for this fund. (You are not required to prepare a DCF model as part of your profiling of this investment opportunity).
Additional guidance
Reference List and Bibliography
You should include a reference list with at least 15 separate relevant and appropriate sources that
you have written about and directly cited within your work.
A bibliography of uncited sources is not required.
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In the past, Insurance industry focused mainly on marketing of Cash Value life insurance policies. Whole Life insurance with a saving component was being promoted as effective “forced saving” tools. Nowadays, Term life insurance is being promoted as a more “effective” insurance product. More and more insurance companies encourage consumer to “buy term and invest the difference”.
In no more than 3 pages, identify all critical factors in determining whether Term life or Cash value life insurance would better suits the financial planning needs of a consumer.
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Purpose: Researching Yields and profitability of banks prior to 2008 to Yields and profitability of banks after 2008.
Hypothesis is that Profitability before 2008 was higher than after 2008. Please use data on the asset/liability and market interest rate changes (since this is what our RP 1 was on).
Obtain historical data from the Bloomberg Terminal (or another approved website such as www.ffiec.gov, www.worldbank.org, www.imf.org, www.fdic.gov, or fred.stlouisfed.org) related to Research paper 1 topic (see attached). The analysis excluding tables or graphs, must be limited to 5 pages with the same formats as the first paper.
The spreadsheet containing the data must also be submitted with the paper (please give me the paper, as well as excel file with the data used).
See attached files. In paper structure, this is Project 2, and I have attached Research Project 1. Number of sources is not too important, just please have enough data to back your arguments and create those statistical models/variables.
I have attached two examples of other Research Paper 2 Topics. The paper should look similar to this, of course our topic is different than in the examples. Please include the data, graphs, and models in the end of the report.
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Trading in Finance Individual Evaluation Paper The total number of pages should be 15. Be careful, graphs or tables can be very important and useful, but it doesn’t count in term of space taken in the paper. You need to write 15 pages of words.
Trading in Finance Individual Evaluation Paper
The assignment is divided in three separate papers. The dates of submission are provided on Blackboard.
This is a paper written individually; it is not a group project.
The evaluation of the paper will be based on the content, the organization, and the quality of writing.
Trading in Finance Individual Evaluation Paper Content Writing Guideline
Each paper is a report about your trading activities in the Queens College Trading Competition, and each one of them should have 5 pages.
The topics may vary. It depends on your trading experience.
It could be about:
i/ your strategies: what securities you selected and why, what strategies you adopted, how successful your strategies were, what you would have done differently, what you learned from it, etc.
ii/ your observation on the relationship between different markets, global macro strategies
iii/ the relationship between business cycle and financial markets
iv/ relationship between events and evolution of prices in financial markets
v/ relationship between political or geopolitical situations and financial markets
vi/ quantitative approaches you developed
vii/ specific firms, industries, financial instruments related to your trading.
etc.
The list is not exhaustive. It must be related to your trading activities, so to current events even if you can incorporate historical perspectives.
Also, it has to be an original analysis.
A list of resources is provided on the website of the trading competition but you can use any other material.
Objective
You have to demonstrate that you have the ability to come up with a deep, interesting and original analysis.
It is a document you could present to an interviewer, a boss, or publish online.
Trading in Finance Individual Evaluation Paper Organization
Basically, you should organize your paper the following way.
Introduction: It should start with general statements to introduce the subject and then you should explain what you will write about and the general content of the different parts.
Part 1: You are free to organize your parts as you want. It has to have clear different parts with a logical evolution in the writing. You can have more parts if you want as long as it is well organized.
Part 2:
Part 3:
Conclusion: It is a summary of your paper and it should be short.
Trading in Finance Individual Evaluation Paper References
You must mention your sources and have a list of references at the end of the paper. It is important not to use only one source.
Quality of writing:
Here is a link about how to write a paper in economics:
Deirdre McCloskey: “Economical Writing” Economic Inquiry 24(2) (Apr 1985): 187-222 [reprinted in UCLA Writing Program {Ellen Strenski, ed.}, Cross-Disciplinary Conversations about Writing (NY: St. Martin’s Press, 1989)]; reprinted with revisions as The Writing of Economics (in second ed., Economical Writing, 1999).
http://www.deirdremccloskey.com/docs/pdf/Article_86.pdf
A book that could be useful is:
Roy Peter Clark, “Writing Tools: 50 essential Strategies for Every Writer”
You can get also the help from the “Writing at Queens” department:
http://writingatqueens.qwriting.org/the-writing-center/
It is very important that you avoid plagiarism:
http://qcpages.qc.cuny.edu/writing/history/plagiarism/index.html
Guide for the assignment: I will get rid of points if these requirements (titles, organization, number of pages, etc…) are not respected.
1/ The total number of pages should be 15. Be careful: graphs or tables can be very important and useful, but it doesn’t count in term of space taken in the paper. You need to write 15 pages of words.
It can be double spaced and the font shouldn’t be bigger than 12.
2/ This is a paper written individually; it is not a group project.
3/ The evaluation of the paper will be based on the content, the organization, and the quality of writing.
a/ Content: What should be in the paper is described in the writing assignment description above.
b/ Organization: basically, you should organize your paper the way it was described above.
Each of these parts should have a title so it can be read clearly.
The introduction should be something like half a page. It includes a general introduction of the topic, the more specific question that you want to answer, the brief description of the different parts that you are going to develop.
Each part should be composed of clear sub-parts, clearly separated in paragraphs. You have to be able to construct those parts in a way that you don’t have more than 5 or 6 big paragraphs, and themselves shouldn’t have more than 3 or 4 subparts.
The conclusion is a brief summary of your paper (half a page) emphasizing on the main point. You can also mention questions that arise from the analysis you did, or potential need for reflection on some parts.
In the reference part, you have to mention your sources.
c/ Quality: Be clear. It is critical that you create a logic we can follow and that makes sense. You have to tell a story; it is not a stock of words or concepts.
The best way to proceed is the following:
First read carefully papers or articles and put briefly their ideas on paper.
Second, do a brainstorming to gather ideas
Third, organize these ideas logically, creating outlines for your parts.
After your outline is finished, then write the body of your essay.
Then, probably you have then a better idea of how to write your introduction and your conclusion.
Reread and revise many times. It has to sound right.
Make sure you have very good links between paragraphs.
Provide a title for the conclusion, each part, the conclusion and the reference part, so it is clear.
4/ You absolutely have to mention your sources.
5/ It is very important that you avoid plagiarism. Not only it is a legal necessity, but it is also a question of fairness and honesty. Moreover, it has to be a habit to formulate or reformulate ideas your own way: an intellectual journey is the continual search for better explanations. It is good and important to always to recognize honestly the contribution from others, but mainly you have to be truthful to yourself. It is a quest.
6/ Don’t use quotes. In the current exercise, it is better if you avoid it: first we do here a training exercise so you have to develop your style, and second you don’t have much space for that kind of luxury.
7/ It is a rigorous intellectual exercise that takes times and precision. Usually, you need to rewrite many times some parts until you find the right way to write it, so don’t be discouraged in that regard. You have to find your own voice, but it has to be correct and clear.
8/ Use the spelling & grammar check in Word. The presentation in the business world makes also a difference.
Provide a paper version (pdf form with 2 pages per sheet, one side) and you have to send also an electronic version before the deadline.
Jack O’Boyle and David O’Brien are district managers for C&M Inc., a leading supplier of construction equipment. Over the years as they moved through the firm’s sales organization they became, and still remain, close friends. Jack, who is 33 years old, currently lives in Newark, New Jersey; David, who is 35 years, lives in Houston, Texas. Recently at the national sales meeting they were discussing various company matters, as well as bringing each other up to date on their families, when the subject of investment came up. Each of them had always been fascinated by the stock market and now they have achieved some financial success, they have begun actively investing. As they discussed their investments, Jack indicated that he felt that only way an individual who did not have hundreds of thousands of dollars to invest can safely is buy mutual funds shares, since they contain a large number of securities representing the stocks of the leading firms in a broad cross-section of industries. Jack emphasized that in order to be safe, a person need to hold a broadly diversified portfolio and that only those with a lot of money and time can achieve the needed diversification that can be readily obtained by purchasing mutual fund shares.
David totally disagreed. He said, “Diversification! Who needs it?” He felt that what one must do is to look carefully at each stock possessing desired risk-return characteristics and then invest all one’s money in that stock. Jack told him he was crazy. He said, “There is no way to conveniently measure risk- You are just gambling.” David disagreed. He explained how his stockbroker has acquainted him with beta, which is a measure of risk. David said that higher the beta, the more risky the stock, and therefore higher will be its return. By looking up the betas for potential stock investments in his broker’s beta book, he can pick socks having an acceptable risk level for him. David explained that with beta, one does not need to diversify; one merely need to be willing to accept the risk reflected by beta and then hope for the best. The conversation continued, with Jack indicating that although he knew nothing about beta, he did not believe one could safely invest in a single stock. David continued to argue that his broker had explained to him that beta can be calculated not just for a single stock, but also for a portfolio of stocks such as a mutual fund. He said, “What’s the difference between a stock with beta of say, 1.20 and mutual fund with beta of 1.20? They both have the same risk and should therefore provide a similar return.”
As Jack and David continued to discuss their differing opinions relative to investment strategy, they began to get angry with each other. Neither was able to convince the other that he was right. The level of their voice now raised, they attracted the attention of the company vice-president of finance, Jordan Katz, who was standing nearby. He came over to Jack and David and indicated he had overheard their argument about investments and thought that, given his expertise in financial matters, he might be able to resolve their disagreement. He asked them to explain the crux of their disagreement, and each reviewed his viewpoint. After hearing their views, Jordan responded, “I have some good news and some bad news for each of you. There is some validity to what each of you said, but there also are some errors in each of your explanations. Jack tends to support the traditional approach to portfolio management; David’s view is more supportive of modern portfolio theory.” Just then, the company president interrupted them, indicating that he must talk to Jordan immediately. Jordan apologized for having to leave and made an arrangement to continue their discussion over a drink later that evening.
a) Analyze Jack’s argument and explain to him why a mutual fund investment may be over- diversified and that one does not necessarily have to have hundreds of thousands of dollars in order to diversify adequately.
b) Analyze David’s argument and explain the major error in his logic relative to the use of beta as substitute for diversification. Explain the key assumption underlying the use of beta as a risk measure.
c) Briefly describe the traditional approach to portfolio management and relate it to the approaches supported by Jack and David.
d) Briefly describe modern portfolio theory and relate it to the approaches supported by Jack and David. Be sure to mention diversifiable, non-diversifiable, and total risk along with the role of beta
e) Explain how the traditional approach and modern portfolio theory can be blended into an approach to portfolio management that might prove useful to the individual investor. Relate this to reconciling Jack’s and David’s differing points of view.
2)
a) Define and discuss different forms of efficient market hypothesis. Explain why in an efficient market it is difficult or impossible to consistently outperform the market.
b) You have been following the stock price of Lee Inc., for the past 16 consecutive days in an attempt to determine whether you can outperform the buy and hold strategy by employing a filter rule. The simple filter rule states that your buy or sell decision is dictated by the level of the filter. If the price of the stock increases by at least the level of the filter, you will buy and hold the stock until it reaches a peak and then drops at least by the level of the filter. In this exercise, you will refrain from short selling. As a result, when the stock price drops from the peak by the level of the filter, you will liquidate the position and hold on to cash until the next buying opportunity arises.
i) Compute the return on $100.00 invested in the security by a 0.3% filter rule (without short sales) and compare this strategy to a buy and hold policy. Note that investors wait until the price increases by more than 0.3% for the first time. In addition, note that a fraction of a share can be purchased or sold. (Carry out calculations to 4 decimal points).
ii) Perform the autocorrelation of price movement over the 16 day period. Explain your finding.
iii) What do the results obtained in (i) and (ii) imply for weak form market efficiency? Based on the limited data that you have analyzed, what is your conclusion about the weak form market efficiency? Justify your conclusion.
3) Please refer to the attached Excel spreadsheet, QUESTION 3 tab. The data set contains monthly closing prices for the period of December 2013 to October 2018 for four stock indices. They stock indices are the DJIA, S&P500, Russell 2000 and Nikkei 225.
Based on the data provided, you are asked to do the following:
a) Compute the monthly holding period returns for each index;
b) Compute the mean, variance and standard deviation of returns for each index. Provide a comparative analysis of their performance.
c) Compute the variance-covariance matrix of returns for the above indices. What information is contained in the variance-covariance matrix? Why is variance-covariance matrix important for portfolio analysis? Explain.
d) Compute the correlation matrix for the above indices. What additional information provided by the correlation matrix that is not provided by the variance-covariance matrix? Explain in detail.
e) Calculate equally weighted two asset portfolios of the following combinations:
i. DJIA –S&P500
ii. S&P500 – Russell 2000
iii. S&P500 – Nikkei 225
iv. Russell 2000 – Nikkei 225
f. Rank the portfolios based on their risk-return performance. Explain and justify your response.
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