Assignment
1. Briefly differentiate between a commercial bank and a consumer finance company. What is the most significant difference between these two?
2. Identify one of the significant risks finance companies face. Why is this risk important to monitor?
3. Select one factor that affects cash flows for a finance company valuation. Why is this factor significant for its operations?
4. Select one factor that affects the required rate of return for investors in finance companies. Why is this factor significant for investors?
5. Speculate on why you think a finance company is in a better position to offer credit cards than a commercial bank.
6. What is Net Asset Value (NAV) per share and what is the basic means used to determine its value?
7. Identify one expense of a mutual fund and briefly explain why management charges this fee. Why might investors be concerned with this fee?
8. In what way does a change in the risk-free rate affect a bond mutual fund?
9. Based on your understanding of mutual funds, would you favor a mutual fund of mutual funds or not? Why?
10. Briefly differentiate an exchange-traded fund from a mutual fund. Which would you select and why?
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.