Federal Reserve and Economic Policies Roberto Rodriguez ECO/372 6/26/2013 Shah Danyal Federal Reserve and Economic Policies Multiple factors and policies influence the regulations and guidelines that the Federal Reserve exercises in shaping the economy. The Federal Reserve operates with monetary policies to avoid inflation as well as to control the money supplies. Banks set their specific interest rates based on the discount rates implemented by the Reserve. Stimulus plans directly affect the money supply and the circulation of funds through the money multiplier effect. Discount rate is an indicator signifying change to the monetary policy rather than controlling the money supply.
Peter Swap I. Issue: Will recognizing compensation expense as part of Mizri Corporation’s stock compensation plan faithfully represent the exchange? II. GAAP List: * 718-10-30-22: An equity instrument for which it is not possible to reasonably estimate fair value at the grant date shall be accounted for based on intrinsic value * 718-20-35-3: A modification of an equity award shall be treated as an exchange of the original award for a new award incurring additional compensation cost for any incremental value III. Alternatives: A.
Since, the FED set the interest rate in which the banks borrow from, Edgars’ ability to borrow enough money or establish a line of credit to start his business will be affected by inflation, interest rate and financial policies. However, in some situations, an unanticipated inflation can benefit Edgar, as this type of situation whenever inflation rates are underestimated for the life of a loan, the bank loses and Edgar will
Currency risk- if unexpected changes in currency values affect the value of the firm 4. Identify and describe the ways in which a US company can participate in international commerce. 5. The price of a currency forward contract is determined by the relationship between interest rates of the two countries in question and the time period covered by the contract. Is this statement exactly true, partly true or false?
Which of the following is true regarding the use of LIFO for inventory valuation? a. If LIFO is used for external financial reporting, then it must also be used for internal reports. b. For purposes of external financial reporting, LIFO may not be used with the lower of cost or market approach.
If there is a problem with the indorsements, or if the check has been altered, the payor bank can bring a claim against the depositary bank for breach of the warranty. This fits right in with the UCC's general scheme which seeks to place the risk of loss on the party in the best position to prevent the loss. Depositary banks should exercise caution when accepting a deposit
When is the trial balance prepared? What is the purpose of preparing a trial balance? What does the trial balance tell you? What does the trial balance not tell you? Why not use the Trial Balance to report financial information internally and externally?
Depository institutions are supposed to be managed to limit risk. Their managers, thus, may not be conditioned to operate prudently in more speculative securities businesses... The case against preserving the Glass-Steagall Act: 1. Depository institutions will now operate in "deregulated" financial markets in which distinctions between loans, securities, and deposits are not well drawn. They are losing market shares to securities firms that are not so strictly regulated and to foreign financial institutions operating without much restriction from the Act.
The policy holder can withdraw from his/her fund. This feature is subject to pre-determined charges and conditions. The policy holder can invest additional sums of money through single premium additions. This feature reflects the changing needs of a policy holder and is subject to conditions by the insurance provider. Liquidity A policy holder may experience a sudden arrival of urgent situation that could require an infusion of significant amount of funds.
Luisa Fernanda Treviño A01231457 Agosto/13/2015 Proyecciones Financieras Financial statement forecasts * Expected future income statements * Balance sheets * Cash flows Financial statement forecasts represent an integrated portrayal of a firm’s future operating, investing and financing activities. = Future profitability, growth, financial position, cash flows, risk. Optimistic forecasts can lead the analyst to overestimate future earnings and cash flows or underestimate risk and therefore make poor investment decisions. Conservative forecasts can lead the analyst to understate future earnings and cash flows overstate risk. Focal points of the firm’s strategy * Accounting quality * Profitability * Risk General forecasting principles