Finance Homework Essay Example
Finance Homework Essay Example

Finance Homework Essay Example

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  • Pages: 2 (416 words)
  • Published: May 20, 2017
  • Type: Tests
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Chapter 1. The U.S. financial system comprises various components, which include:

  1. Policy makers: These individuals play a crucial role in setting fiscal and monetary policies.
  2. A monetary system: This system is responsible for creating and transferring money.
  3. Financial institutions: These entities accumulate savings and provide lending/investment services.
  4. Financial markets: These markets facilitate the transfer of financial assets and serve as platforms for marketing them.

The specific roles of each component are as follows: (A) Financial institutions gather savings from individuals and businesses, which they then lend or invest; (B) The monetary system creates new money and facilitates its circulation within the economy; (C) Policy makers pass laws and establish both fiscal and monetary policies that govern the financial system; (D) Financial markets market financial assets and enable their transfer from one party to another.

In total, there are four types of financial markets: debt securities markets, e

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quity securities markets, derivative securities markets, and foreign exchange markets.

Markets for securities:

Specify the markets where the following securities are traded:

  1. A. Residential mortgages (1)
  2. C. Corporate stocks (2)
  3. B. Corporate bonds (3)
  4. D. Currencies (4)

Ethical dilemnas frequently arise in business. Laws and regulations establish what constitutes unethical behavior, but practicing ethical behavior of high quality goes beyond mere compliance.

Response to the following situations:

a.

Your boss reveals that the Federal Drug Administration will grant approval for your company's new groundbreaking drug tomorrow. This prompts you to contemplate purchasing stock in your company today. However, I advise against it as acquiring insider information is morally incorrect. It is unethical to exploit non-public information for personal benefit or take advantage of one's position within the company. Hence, the stock should only be bought once it becomes publicly known.

This is insider trading, which coul

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potentially breach federal securities laws. Despite your firm's history of complying with product safety regulations, there have been cases where product failures resulted in customer injuries. Due to your personal moral concerns, you may be considering resigning from your position. However, I advise against abruptly quitting your job in this specific situation.

To verify the rumors and confirm their accuracy, I would collect detailed data on the situation and the possible causes for the company's failure to meet regulatory standards. If these claims are indeed true, I would notify headquarters to bring attention to the negative impact that their defective products have on customers. It is crucial for the company, which aims to maintain customer loyalty, to acknowledge and resolve this harmful reputation.

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