(1): The primary function of an insurance company is to provide its policy holders protection from adverse events like a medical emergency, a fire etc. For this purpose insurance companies accept premium payments from its policy holders and then provide compensation in case the policy holder is hit by an adverse event. A depositary institution has the primary function of providing financial intermediation for individual and corporate savers. Thus both insurance companies as well as depositary institutions pool funds of savers and while insurance companies intermediate by making contingent payments to a subset of the participants in the pool of savers the depositary institutions intermediate by lending to users of funds.
(2): Venture capital is like Angel venture capital except for one difference that venture capital’s role comes at a later stage and usually after the stage of seed-funding. Venture Capital invests in new ideas, new products and people. Angel venture capital is similar to venture capital except form one small difference – angel venture capital provides investment at the seeding stage. On the other hand PE or private equity firms raise funds sourced from high net-worth individuals and institutional investors such as pension funds etc. The fund is then invested in different businesses and industries. Example of what a venture capital and angel venture capital will invest is in a new start up or a new technology backed products. Examples of what PE funds will invest are in rapidly growing businesses in a large cross section of industries.
1. How does the primary function of an insurance company compare with that of a depository...
How does the primary function of an insurance company compare with that of a depository Institution?
These questions are from textbook - Venture Capital, Private Equity, and the Financing of Entrepreneurship Chapter 7 1. Exits are ultimately how private equity firms realize returns on their investments. Describe the various ways for a private equity firm to exit an investment. 2. What are some of the key considerations in determining whether to take a company public? 3. What are some of the possible explanations for why acquisitions account for a greater percentage of exits than IPOs? 4....
1. How does the product in a monopolistic competition compare with the product in a competitive market? 2. How does the seller’s demand curve in a monopolistic competition compare with the seller’s demand curve in competition? 3. Why will an monopolistic competitive firm only lose some of its customers, but not all when it raises its price? 4. What feature is the “hallmark” in monopolistic competition? 5. What short-run profit maximizing rule do monopolistic competitive firms follow? 6. If economic...
How does health insurance differ from other kinds of insurance? What are the similarities and differences between them? Why has the cost of employer-sponsored health plans increased significantly over the last 5 years?
- Explain how primary, secondary, formal, and informal groups influence consumers. What are the differences between each type of group? Give examples for each type of group that you belong to. - Explain how family members can influence value perceptions. - What are the various power bases of reference groups? Give examples of how these power bases have influenced you in your personal life. - Compare and contrast the concepts of peer pressure, conformity, and persuasion. - How has Facebook...
True/False (T/F) _____1) The primary advantage of equity capital is that it does not have to be repaid with interest. _____2) The most common source of equity funds used to start a small business is an SBA loan. _____3) If an entrepreneur is not willing to risk funds in a business venture, other potential investors and lenders are not likely to provide capital either. _____4) Venture capital companies reject 90% of the proposals they receive because they don't meet the...
Company 1 and Company 2 are identical firms in all respects except for their capital structure. Company 1 is all equity financed with $800,000 in stock. Company 2 uses both stock and perpetual debt; its stock is worth $400,000 and the interest rate on its debt is 10%. Both firms expect EBIT to be $95,000 and all income will be distributed as dividends. Ignore taxes. a. Fred owns $30,000 worth of Company 2 stock. What rate of return is he...
1. What types of costs are allocated? What is a support department? What is a producing department? What types of costs are allocated? Why is cost allocation important for companies to consider? 2. What are the differences between single charging rate and multiple charging rates? What factors might a company consider when determining how to allocate support department costs to a producing department? Give some examples of a type of support department costs and why it might be reasonably allocated...
INTERNATIONAL BUSINESS course short essay questions from Chapter 1-4: 1. Compare and contrast World Bank and IMF. 2. How much world trade is there and what benefits might a company have from the globalization of markets. 3. Explain globalization of production and its benefits. What type of management should a company study if it commits to globalization of production. 4. What are the two types of family group? Why does the family play an important role in affecting business activities? 5....
Why is it important to estimate the cost of retained earnings? What are the three reasons why firms avoid issuing new equity? What makes a firm a good or bad candidate to take on debt? What does the beta in the CAPM measure? how to identify whether a risk is a market risk or a firm-specific risk. Why do firms spinoff their business divisions? What is Capital Budgeting? What is the difference between independent and mutually exclusive projects? What is...