Business Administration - Financial Planning RFC125 Final: CSC 2 Study for Exam
16 Oct 2017
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Expectations/determining price of securities: factors: fiscal policy, monetary, flow of funds and inflation, unpredictable effects, war, unexpected election results, regulatory changes, technology innovation, debt defaults, dramatic changes in prices in agriculture, metal, energy commodities. Taxes: increase = less disposable cash = less spending: reduction = increase net personal income = more spending, corporations: higher taxes on profits. Economic expansion period: credit grows, and prices move upwards too quickly, bank of canada try to lessen pressure by reducing growth of money and credit = higher short-term interest rates. Economy slowing down: easier monetary policy that increase money supply and availability of credit, leading to lower short-term interest rates. Bonds inverse relationship: one goes up one goes down, vice versa. Pricing strategies/company costs affect long-term growth, volatility of sales and earnings = affect company"s stock valuation. Estimating growth: does growth industry"s sales compare rate of growth in nominal gross domestic.
