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1. What are the differences between equity and fixed-income securities?

Difference between equity and Fixed-income securities:
Debt is an obligation through which the bondholder gets a fixed return according to
the rate of interest and principle amount after a specified period of time. Equity, on
the other hand, represents ownership, which means that a shareholder is an owner
who can take part in the management and decision making of the organization.

2. What is the difference between a primary asset and a derivative asset?

What are agency problems? What are some approaches to solving them? .3. What is the difference between asset allocation and security selection? 4.

5. How does investment banking differ from commercial banking? . What are the differences between real and financial assets? 6.

. Toyota pays off its loan. b. Are any financial assets created or destroyed in the transaction? a. For each transaction.7. c. identify the real and/or financial assets that trade hands. Toyota takes out a bank loan to finance the construction of a new factory. Toyota uses $10 million of cash on hand to purchase additional inventory of spare auto parts.

Can you reconcile your answers to ( a ) and ( b )? . a. Has the stock of real assets of the economy changed? b. Are individuals less wealthy? c. housing prices fall by 10% across the entire economy.8. Suppose that in a wave of pessimism.

. Are any financial assets created or destroyed in the transaction? a. For each of the following transactions. Lanni sells the software product to Microsoft. Lanni sells the shares of stock for $25 per share and uses part of the proceeds to pay off the bank loan.000 of its own funds to finance the development of new financial planning software.9.000 and has cash on hand of $20. c. Lanni uses the cash from the bank plus $20.000 contributed by Lanni’s owners. It currently owns computer equipment worth $30. Lanni accepts payment in the form of 5.000 shares of Microsoft stock. which will market it to the public under the Microsoft name. Lanni takes out a bank loan.000 in cash and signs a note promising to pay back the loan over three years. identify the real and/or financial assets that trade hands. It receives $50. d. Lanni Products is a start-up computer software development firm. b.

Prepare the balance sheet after Lanni accepts the payment of shares from Microsoft.000 to develop its software product. Prepare its balance sheet just after it gets the bank loan. What is the ratio of real assets to total assets? .10. Reconsider Lanni Products from the previous problem. What is the ratio of real assets to total assets? c. a. What is the ratio of real assets to total assets? b. Prepare the balance sheet after Lanni spends the $70.