Activity 2

1. The other factors that can influence the investor’s perception of the company’s performance
which would ultimately affect share price are the market trends, economic growth, past
financial performance and the reputation of a company. If an investor invests in an uptrend,
they will stay and look for the weaknesses and shortcomings of a company which is a way for
them to know when to jump off and take the profit by themselves. Investors invest to meet their
demands. Economy holds an important part in business because if an economy drops, the flow
of money will also drop. If the economic growth is improving then the investors will invest as
they expect their demands to improve and increase too. If an economy is going through a
recession, it is harder to make profit and investors will not invest or pull out their investment
resulting to have a lower share price. If a company had a poor past financial performance, the
investor will be reluctant to invest in that company, but if they have an outstanding past
financial performance, it will influence investors to invest. Reputation of a company will also
affect the share price as it will inform investors about the cash flows of the market to influence
the perception of investors about the company’s performance.

2. Finance is everywhere, whether you are inside or outside of your house, paying bills, paying
tuition fees, buying groceries etc. The study of finance is important to me because it will open
the doors for great opportunities and give knowledge on how to manage your own finances. It
allows people to have understanding in budgeting, investing, saving, managing money and
making financial decisions that will allow us to have a balanced life. Financial knowledge will
improve the lifestyle of many people and will help us to have a stable life. It will also help me to
grow in my career by acquiring different skills like analytical ability, organizational skills,
management skills, and problem-solving skills. In the business and corporate world, the study of
finance will assist entrepreneurs to have a profitable and thriving business. It will also help a
business to determine what money to spend, where to spend it and when it should be spent. It
will yield the business and give the business and the different people involved a higher profit.
Knowing finance will allow individuals to have a successful profession which will help us to thrive
for us to become a successful person.