FINM7006 Applied Foundations of Finance Tutorial 1 Questions
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Applied Foundations of Finance (FINM7006)
Tutorial 1 Questions
Question One
What is the primary role of financial markets?
Question Two
What are the three principal sets of players that interact in the financial markets?
Question Three
What is a financial intermediary? List and describe the principal types of financial intermediaries in the Australian financial markets.
Question Four
Describe the flow of funds within the financial system.
Question Five
Describe the difference between the primary and the secondary market.
Question Six
Discuss the main differences between money markets and capital markets. Describe these markets and name some instruments that are traded on these markets.
Question Seven
What is the intercompany market? Is it regarded as a money market or a capital market?
Question Eight
To what amount will the following investments accumulate?
a) $5000 invested for 10 years at 10% compounded annually;
b) $8000 invested for 7 years at 8% compounded annually;
c) $775 invested for 12 years at 12% compounded annually; and,
d) $21000 invested for 5 years at 5% compounded annually.
Question Nine
If you deposit $10000 today into an account earning an 11% annual rate of return, in the third year how much interest would be earned? How much of the total is simple interest and how much results from compounding of interest?
Question Ten
What is the present value of the following future amounts?
a) $800 to be received 10 years from now discounted to the present at 10%
b) $300 to be received five years from now discounted to the present at 5%
c) $1000 to be received eight years from now discounted to the present at 3%
d) $1000 to be received eight years from now discounted to the present at 20%.
2022-09-21