The financial crisis of 2007- 2009.

 

 

 

Part 1: Essay

Describe the financial crisis of 2007- 2009. What were the primary causes of this financial crisis?

Part 2:

1. Ira Schwab opens up a Schwab IRA and places $2,000 in his retirement account at the beginning of each year for 10 years. He believes the account will earn 5 percent interest per year, compounded quarterly. How much will he have in his retirement account in 10 years?

2. The city of Glendale borrows $48 million by issuing municipal bonds to help build the Arizona Cardinals football stadium. It plans to set up a sinking fund that will repay the loan at the end of 10 years. Assume a 4 percent interest rate per year. What should the city place into the fund at the end of each year to have $48 million in the account to pay back their bondholders?

Part 3:

Matthew is considering several possible compensation alternatives for services he has provided as a consultant:

Option A: Matthew could receive $8,000 today.
Option B: Matthew could receive $2,500 at the end of each of the next four years.
Option C: Matthew could receive $12,000 five years from now.

Required:

1. Calculate the present value for each option assuming that Matthew can earn 7 percent on any investment funds.
2. Which option results in the greatest financial benefit to Matthew?
3. If Matthew earns 10 percent, will that change your answer to # 2 above? Please explain.

Part 4:

Tom and Mary James just had a baby. They heard that the cost of providing a college education for this baby will be $100,000 in 18 years. Tom normally receives a Christmas bonus of $4,000 every year in the paycheck prior to Christmas. He read that a good stock mutual fund should pay him an average of 10 percent per year. Tom and Mary want to make sure their son has $100,000 for college. Consider each of the following questions.

a. How much does Tom have to invest in this mutual fund at the end of each year to have $100,000 in 18 years?

b. Tom’s father said he would provide for his grandson’s education. He puts $10,000 in a government bond that pays 3 percent interest. His dad said this should be enough. Do you agree?

c. If Mary has a savings account worth $50,000, how much must she withdraw from savings and set aside in this mutual fund to have the $100,000 for her son’s education in 18 years?

Part 5: Essay

Some suggest that a firm should seek to maximize the welfare of all its stakeholders, such as employees, customers and the community in which it operates. How would this objective conflict with the one of maximizing shareholder value? Do you believe such an objective is feasible?

 

Part 6:

Joe Downey is currently 65 years of age. He is currently drawing $20,000 a year out of his IRA. He expects to live to 100 and wants to know what he needs now to insure himself that he will be able to draw the $20,000 at the beginning of each year for the next 35 years. He believes the account will earn 6 percent compounded annually for the next 35 years. How much money does he need in his account today?

 

 

 

Sample Solution

The financial crisis of 2007-2009

The 2007-2009 financial crisis began years earlier with cheap credit and lax lending standards that fueled a housing bubble. When the bubble burst, financial institutions were left holding trillions of dollars worth of near-worthless investments in subprime mortgages. The major causes of the initial subprime mortgage crisis and following recession include the Federal Reserve lowering the Federal funds rate and creating a flood of liquidity in the economy, international trade imbalances, and lax lending standards contributing to high levels of developed country household debt and real-estate bubbles that have since burst; U.S. government housing policies; and limited regulation of non-depository financial institutions.

Tones of Poems The shade of verse is anything but difficult to pass judgment on somebody’s sentiments through the voice during discussion. On the off chance that individuals are cheerful, or simply fun, they for the most part make their faces giggle, however on the off chance that they are furious, their voice gets stricter and greater. Creators can utilize different procedures to communicate feelings in short stories and books, for example, outcry focuses and italics. These strategies make it simpler for perusers to comprehend what the character feels. In verse, it is hard to comprehend your condition. These sonnets have various contrasts. The circumstance of verse and adversaries is unique. In Sukhrin’s sonnet, the condition is exceptionally miserable. In affection verse, the tone isn’t just dismal yet in addition exceptionally bold. The two sections are dismal so the two tones are in acceptable concurrence with the refrain. The other party is a lady in John Suckling’s verse, and Richard Lovelace’s sonnet is a restriction war. As indicated by the clarification, Suckling’s “the reason it is so pale, glad, darling” is an impersonation of the custom of affection in the court, demonstrating the writer’s uncertainty about the convention in the embarrassment and his knight’s joy. Sacling’s verse incorporates incongruity of the subjects. It blames youngsters utilizing coat love code as he considers his lady’s aloofness. An artist ‘s beau can not make a move outside of customs with the goal that he doesn’t direct his concentration toward ludicrousness and false reverence of his conduct. Without genuine love and sex understanding, ironicly the artist calls the sweetheart “youthful delinquent”, as they will be limited by crushed convictions. There is no uncertainty that verse and its three refrains have gained comparative ground. Be that as it may, the tone of verse is very contrastive. Wonder’s verse has indisputable dissatisfaction and want for affection. This is in sharp difference to Dawn’s verse where wickedness tone is self-evident. Marvell’s poeties express a great deal of feelings; both “carpe diem” (“get on the day”) and “tempus edax” (“time devourer”) are clear in this stanza. This is in sharp difference to the next two sections that don’t have clear feelings. Think about John Donne’s “The Flea” with Andrew Marvell’s “To His Coy Mistress” and conclude which is the most appealing thing. Understanding the tone of verse is significant for the artist to comprehend what he needs to state. This is likewise significant in choosing the topic of this sonnet. How would you choose the tone? In the wake of perusing just because, you may feel the tone of this sonnet. Be that as it may, how would you realize what is directly for you? You need proof from verse that underpins your case. You took a gander at the jargon and found the proof. The word reference is the decision that the writer picked when composing verse. If it’s not too much trouble consider the decisions you made when composing. You can pick what you can say anything. How would you pick the correct words? In the event that you need to get genuine, you can pick a few words to pass on a genuine tone. Initial segment of the guidelines: Please read the accompanying sentences. As a matter of first importance I will compose the sentences. Accentuate the (word) that you think will add to making the tone for each sentence. Single sentence: frozen yogurt dissolving PPreaccttiiccaall PPooeettrryy AA GGuididdee ttoo TTomeachchinngg CChmmmmoon CCoorree TTextxtt EExextmemplaarrss ffoor PPoetetryry iinn

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