Risk Management Part 1 & 2

Risk Management Part 1 & 2

Please explain the following topics precisely and lucidly. Please type your answers and submit the file in WORD format.

I. Apply advance financial theories / concepts to decision making (10 Points):

· Define finance and explain the role of financial managers.

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· Enumerate the three basic forms of business and the advantages and disadvantages.

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· Describe the financial planning process. How does asset intensity affect a financial plan?

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· Discuss the concept of leverage. Use a numerical example to illustrate the effect of leverage.

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II. Analyze financial issues and decisions (20 Points):

· What is the difference between systematic and nonsystematic risk? Which is more important for equity investor? Which can lead to the bankruptcy of a corporation?

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· What are the principal considerations when determining an overall credit policy? How do the actions of competitors affect a firm’s credit policy?

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· Explain the risk-return trade-off, and give two examples.

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· Describe mergers, acquisitions, buyouts, and divestitures.

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III. Compare and contrast domestic and international financial issues (20 Points):

· Why do exchange rates pose a challenge for financial managers of companies with international operations?

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· Please explain political, financial & economic risks in international business.

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· What effect can cultural differences have on the ownership structure of a foreign operation of a multinational business?

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· Why are currency exchange rates constantly changing over time?

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IV. Demonstrate professional business communication (10 Points):

· What are the differences between formal and informal communication?

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· What is the central focus of a company’s external communication?

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V. Demonstrate foundational knowledge in the core area of business (20 Points):

· Discuss how monetary policy and fiscal policy are used to manage an economy’s performance.

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· Identify the major barriers that confront global businesses.

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· Identify sources of short-term financing for business operations.

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· Why do firms generally rely more on long-term funds rather than short-term funds?

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VI. Discuss ethical and social responsibility issues in the context of law and financial decision (20 Points):

· List two ways in which the securities markets are self-regulated.

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· Identify ethical issues that you might face in business, such as insider trading, conflicts of interest, and bribery, and explain rationalizations for unethical behavior.

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· Identify steps you can take to maintain your honesty and integrity in a business environment.

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· Is it time for a unified approach to business ethics?

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