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final review notes of bu111 si .docx

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Sofy Carayannopoulos

Economics - Pillars - Bonds(yield to maturity) - Stocks (buying on margin or short selling) - TVM(Basics) Social Factors(short answer) - Ethics - Corporate Social - Stakeholder - Responsibilities - Demographics Political Factors - Government - Intangible Property - Forms of Ownership Eco: affect costs sales financial uncertainty 1. eco growth: a. trade balance(surplus and deficit): Canada have surplus b. Exchange rates: parterner USA biggest, huge trade. More buying power from US if Canadian dollar stronger. Oppositely, buying more Canadian dollar. Our more expensive than other, bed!--> strong dollar c. national debt: Canadian have debt. Borrow from other country. Run our country. Billions. Not that bad compare others. 2. stability: a. inflation: (increase of price. Less purchasing power). and deflation(few countries): steady. b. Interests: ability build strong eco. Get rid of recession. Interest were low. Lower: pushing them to expend. Borrow more. Saving less. Power eco 3. employment: unemployment is decreasing. Stabilizing. Eco doing well. Increasing.  Pillars of Canadian banking: merging together become one pillar 1. pillar #1: charter banks: BMO CIBC TD SCOTIABANK RBC 5 big charter banks in Canada. 90% central bank: bank of Canada regulates interest rate. a. doing with them: save money. Mortgage. Credit cards. Investment. Business . loan… b. charactersitc: public traded. Private own. c. Limits foreign-controlled banks: lower competition for local. Porters 5.<8% relationship!! Language and currency. Exchange. d. Serve individuals, business, and others. 2. #2 Alternate Banks: trust。 Low interesting rate. Small loan. For new venture. Low credict requirement. 3. #3 Soecilaized lending/saving: insurance. Less risky. Hier interesting rate. Higher than charter bank. More establish. No credit ppl. 4. #4 investment dealers: 2 session. a. Bonds: interest. Principle. b. Stocks: primary: investment banker, firms sell IPO(intial pblic offer : change from personal company to public. 原始股). Secondary (AFTER initial. Though throu these firms. EX. FB 2004, private in 2004. 2006: shares online. Own part of FB): Toronto. 5. international banking; multiple choice a. not everywhere. Laws b. structure: not established structure in Canada. Offer help to international bus and get relationship with ca bus Q: describe each pillar and its role with respect to the financial resources of an organization Q: what it the structure of the Canadian financial system?How is the P of Pest connected to it? A: regulate not just interest rate but also money supply.  Bonds - Charactersitc: sign contrast; fixed rate of return semi-annually; fixed term maturity date; priority over stockholders- pay back a loan. - Types: 1. Secured (collateral attached) vs. unsecured(debentures 公司债券) 2. Registered (name signed on the bond) vs. bearer(risky, electronic) 3. Callable 随时可偿还的: call back bond before maturity. But bondholder: pre.. money little bit more money. 4. Serial: lot maturity. Pay off little by little until final maturity date. 5. Convertible: convert to stock. – usually convert to common stock. - what determines bond prices and what impacts bond prices when traded: prevailing interesting rate, credit rating, economic and market risk; inflation (money worth less)  Yield= [coupon rate x face value (**interest) +(face value-price paid)/ time to maturity(years for unit)]/ price paid Face value = 1000 Q: identity key info; calculate components; plug componets into formula  Bond pricing - at premium: pay more than face value- has highe
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