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A. Discuss the primary goal of the financial manager.

Maximize shareholder wealth Maximize eps stock price

B. Explain how to maximize the price of the firms common stock. Future profitability, Interest and inflation rates ? The public earning ratio- earnings ?

C. Outline the factors that the stock price is dependent on. Internal Manners of financing money Streams of income Risk of future earns per share Earnings per share External

Levels of inflation Levels of interest rates Market phsycology.. what are people invisting in? what are they using to invest?

D. Explain the reliability problems with earnings. Can easily be manipulated by financial manger through messing around with Depreciation and payables Classification shifting mixing around the number from operating financies itesm to gain profit. Illegal harder to identifiy. Many grey areas/ - fudging with R & D to meet quartly projections.. if over to much cut on expenses to meet next years earnings. E. Outline the main functions of the financial manager.

F. Explain the difference in the money market and capital market. In a money market high debt liquaidy is being traded Capital market short term debts bonds are being traded

G. Explain what an intermediary is Is when banks borrowing so bs to get capital gains in the end H. Explain the difference in a capital gain and an ordinary income. Capital gains are when an asset is sold.

I. Explain the function of the Federal Reserve. Function of federal reserve is to control inflation rates, when in recession feds will control money flow and interest and inflation rates. Will often buy bonds from banks so banks can lend money and lower interest rates

J. Explain the monetary policy tools. Discount something

K. Discuss the business cycle.

L. Outline the four main investment categories and how they move with the business cycle.

BondsStocks- move up and down in times off good and bad conditions Goldcommodities

M. Discuss the relationship of the business cycle to the stock market cycle. They are sim. Business cycle usually prcodess after the stock market cycle

N. Discuss the five phases in each stock market cycle. Phase one .. stock market falling .. interest rates are at high, bonds are lower int rates Phase two, stock market bottom out , slowly raisign, fed lower int rates so stock go back up Phase 3- stock market raising at optimal levels. Phase 4- market peaks out and slowly starts turning Phase 5 market is peaked out, interest rate levels are back up and starting to fall

O. Discuss the reason for each phase and the stock groups which are expected to excel in each phase. Phase one industry casinos, everything majority Phase 2-

P. Explain the five alternatives to plant expansions at the top of the business cycle. Work overtime Cut back on sales Work with other companies business

Q. Explain the relationship between long-term and short-term interest rates.

R. Discuss the definition of ratio analysis and three types of analysis. ProfitabilityDebt Quick inventory

S. Explain the four basic categories of ratios.

T. Discuss the eleven ratios (handout).

U. Explain the sources of comparative ratios.

V. Explain the Dupont method.

W. Explain the limitations of ratio analysis