Assignment #01

Submitted to:

Sir, Khurram Ejaz Chandia

Submitted by:

Abdullah Qamar

FA18-BAF-013

Subject:

Corporate Finance

Date:

17-10-2020
Question No. 1:

Browse through internet and write an essay of about 800 – 1000 words that how the concept of
finance evolved over time and turned into an academic discipline?

An Evolution of Business Finance:

To have a clear understanding of the concept of financial management, it would be worthwhile to

study changing contents of business finance as an academic discipline. Before the turn of the
present century finance was studied as a part of economics.

Study of finance as a separate discipline began only in the early part of the 20th century when
massive consolidation movement took place. Formation of large sized undertakings by
consolidating the smaller ones brought before the management the problem of financing these
giant enterprises.

Accordingly, overwhelming emphasis was placed to the study of sources and forms of financing
the new industrial giants. Authorities on finance, like Meade, Dewing and Lyon dealt with, in a
scholarly fashion, the problems of capitalization, choice of capital structure, promotions, sale of
securities, nature and term of financial contracts and similar other matters related to source of
raising of funds. Thus, the study of business finance remained descriptive one.

Emphasis on study of potentiality of different securities as a source of procuring funds from

outside world and the role and functions of institutional agencies including investment bankers
continued to exist during 1929’s since this decade witnessed a burst of new industries, like radio,
chemical, steel and automobile upon the economic scene of the USA, the emergence of national
advertising and improved distribution practices and the euphoria of high profit margins.

1930’s were a period of grave economic recession which created formidable problem of
liquidity. Businessmen found it difficult to acquire funds from banks and other institutions to
meet their day-to-day requirements.

They had to liquidate their inventory holdings to meet their financial needs. But owing to
precipitate fall in price level, the inventory liquidation did not provide sufficient funds to meet
the requirements.

The period between the mid 1960’s and the early 1970’s was marked as a very fruitful and
exciting area for a number of divestitures, reorganizations and bankruptcies and renewed concern
for liquidity and profit margins. The analytical and empirical frontiers of the discipline were also
at the same time redefined and redesigned.

Personal finance is developing as an academic discipline, but has some way to go before it is

Generally accepted as such. The thesis reviews five contributions, from other authors, to the
Development of personal finance as an academic discipline (dating between 2002 and 2008).

Those contributions emphasis the need for a generally agreed body of theory for an academic

Discipline of personal finance. My publications, in particular Personal Finance and

Investments: A Behavioral Finance Perspective, have sought to establish a body of theory

and knowledge for an academic discipline of personal finance. That body of theory and

Knowledge is multidisciplinary, and much broader than the bodies of theory suggested by the

Five previous contributions. It is also much broader, and based more on academic research,

Than the curricula of professional bodies such as the Chartered Insurance Institute (which

Reflects the curriculum set out by the Financial Services Authority) for the training of financial

Advisers. The greater breadth is illustrated by means of comparisons of threshold concepts

Covered by my publications with those covered by the previous five contributions, and by

professional training programmers. Consideration of the objectives and processes of personal

financial advice suggests that an academic curriculum should be more multidisciplinary than

the existing curricula of professional bodies. In particular the curriculum should include

behavioral and relationship dimensions. It is suggested that attention to the psychology of

clients should be included in the education and training of financial advisers. This could take

the form of using behavioral finance to gain insights into how clients might perceive

Financial products and services. Some of my publications being considered here (those

Published in the Journal of Financial Planning and the Journal of Financial Service

Professionals) provide behavioral finance perspectives on client perceptions of financial

Products and financial advice (and their providers).

Question No. 2:

Browse through internet and search for the websites of at-least three different banks (operating in
Pakistan). Use those websites and annual reports (available on banks’ websites) to write a brief
note on what services each bank is currently providing to individuals, businesses, and large
corporations.

Ans:

1st Bank HBL:

Products and Services:

Trade financing

Cash Management

Remittances

Treasury

Bilateral loans

2nd MCB Islamic Bank

Murahbah

Istisna

Salam