1. The most common financial metrics for financial planning firms are based on assets, client accounts, revenues, service, expenses and profitability. Which one of the following is an example of an asset based metric?
Net new assets
Revenue growth
Percentage of revenues earned from retainer fees
Number of clients per advisor
Revenues per advisor
Number of accounts per client asset range
2. On Friday, September 13, 1992, the lira was worth DM 0.0013065. Over the weekend, the lira devalued against the DM to DM 0.0012613.
a. By how much has the lira devalued against the DM?
b. By how much has the DM appreciated against the lira?
c. Suppose Italy borrowed DM 4 billion, which it sold to prop up the lira. What were the Bank of Italy’s lira losses on this currency intervention?
d. Suppose Germany spent DM 24 billion in an attempt to defend the lira. What were the Bundesbank’s DM losses on this currency intervention?
show ALL calculations.