Financial market Essay examples

Submitted By nab92
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Financial Market Homework 2
For 10/07/2014
Azizi Nabil , Ferrary Alexandra , Seneclauze Pierre , Gigou Renaud

Review Question 1 and 4 ;

1. Define intermediation.

.

4. What are a bank's primary reserves? When the Fed sets reserve requirements, what is its primary goal?

Problem 3.4 ;

Chapitre 4 ;

Review Question 11;

11. Indicate in which section the following balance items belong (current assets, fixed assets, current liabilities, long-term liabilities, or equity).

a. Cash ; belong to Current Asset
b. Notes Payable ; belong to Current Liabilities
c. Common Stock ; belong to Equity
d. Accounts Receivable; belong to Current Asset
e. Accrued Expenses ; belong to Current Liabilities
f. Preferred Stock ; belong to Equity
g. Plant and Equipment ; belong to Fixed Asset
h.Capital in Excess ; belong to Equity
i.Marketable Securities ; belong to Current Asset
j.Accounts Payable ; belong to Current Liabilities
k.Prepaid expenses ; belong to Current Asset
l.Inventory ; belong to Current Asset
m.Retained Earnings ; belong to Equity

Problem 4.9- 4.10 ;

4-9

a To calculate the current asset we have to add all the items on the current asset

So Current Asset = Cash + Marketable Securities + Inventory + Accounts Receivable + Prepaid expenses.

(11,000,000 + 9,000,000 + 11,000,000 + 3,000,000 + 1,000,000) = 35,000,000

Current Assets = $35,000,000

b To calculate the net fixed asset we have to add all the items which are in the fixed asset and we have to substract the depreciation . So here we have already the fixed asset so ;

Net Fixed assets= Fixed assets – depreciation

30,000,000 – 8,000,000 = 22,000,000
Net Fixed Assets = $22,000,000

c To find the Current liabilities we have to add Notes payable + Accrued Expenses

CL=Notes Payable + Accrued Expenses

4,000,000 + 2,000,000 = 6,000,000

Current Liabilities = $6,000,000

d To

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