Lagrimas Activity 1

NAME: LAGRIMAS, SARAH NICOLE S.
ACTIVITY #1
1. Why do employers value having employees with professional certifications?

They are seeking justifications to employ applicants. Any information they discover that is pertinent to
their field, their business, or the particular position will undoubtedly help to increase the candidate's
credentials. Giving employees the chance to learn new skills immediately contributes to their increased
competence, improving the overall quality of your staff. Employees with certifications frequently
perform their jobs more effectively than uncertified peers. Their involvement can increase the output
of group work.
2. Is the goal of maximization of shareholder wealth necessarily ethical or unethical?

It is always thought that the basic objective of any company is to make money, with profit levels
gradually rising as the company expands. Making money is not wrong, but how those profits are
obtained does matter. While many businesses increase their earnings in an ethical manner, others
maximize income in a variety of immoral ways. through advertising, reducing labor costs and perks, or
lowering the caliber of a good or service. But over time, this typically causes much more harm than
good.
3. What are the two key activities of the financial manager as related to a firm's
balance sheet?
● Investment Decisions: The best structural level and level of efficiency are determined by the
finance manager. Investment choices relate to things that are listed in the balance sheet's asset
section.
● Financing Decision: The finance manager chooses and keeps the right mix of short- and
long-term financing. Additionally, he raises the required funds in the most practical way.
Generally speaking, financing decisions pertain to the components included in the liability and
equity area of the balance sheet.
4. What is corporate governance? Sarbanes-Oxley Act of 2002?

Corporate governance refers to the set of guidelines, customs, and procedures that regulate and
control a business. Corporate governance describes the methods used to govern businesses and their
goals. It indicates who is in charge, who is responsible, and who makes choices.
The Sarbanes-Oxley Act requires that the management of public companies assess the effectiveness of
the internal control of issuers for financial reporting. Section 404(b) requires a publicly-held
company's auditor to attest to, and report on, management's assessment of its internal controls.
5. Define financial institutions. What is the difference between Commercial and

Investment banks?
Financial institutions are organizations created to provide customers, whether they be people or
businesses, with financial services. As they control the money supply through the regular flow of
financial resources in the market, they play a crucial part in maintaining the economic environment of
a country.
Commercial banks accept deposits, make loans, safeguard assets, and work with many small and
medium-sized businesses and consumers. Investment banks provide services to large corporations
and institutional investors.
6. What is a Financial Market? Present the flow of funds for financial institutions and
markets through a diagram.
Financial markets encompass any location or system that gives buyers and sellers the ability to trade
financial instruments, such as bonds, shares, different international currencies, and derivatives.
Financial markets provide interaction between those with capital to invest and those who need capital.
7. What is the Money Market and Eurocurrency Market?

Local and foreign traders that require quick access to funds can get it through the money market. It
offers a provision for bills of exchange to be discounted, which enables quick financing for the
purchase of goods and services. The acceptance houses and discount marketplaces are advantageous to
international dealers. While. eurocurrency market is the money market for currency outside of the
country where it is legal tender.
8. Define Capital Market. Differentiate the following: Bonds, common stock and
preferred stock
Capital markets are financial markets that bring buyers and sellers together to trade stocks, bonds,
currencies, and other financial assets.
A bond is merely a loan that a business has obtained. The company receives the funding from
investors who purchase its bonds rather than a bank. An interest coupon, or the annual interest rate
paid on a bond stated as a percentage of face value, is what the corporation gives in return for the
capital. Common stock is a class of stock that represents equity ownership in a corporation. Owners
of common stock, called shareholders. On the other hand, preferred stock is a class of stock that is
granted certain rights that differ from common stock. Namely, preferred stock often possesses higher
dividend payments, and a higher claim to assets in the event of liquidation.
9. Describe Broker Markets and Dealer Markets

A broker market involves agents or intermediaries in purchase and sale transactions to facilitate price
discovery and transacting the execution. While, a dealer market is a financial market where dealers
post prices they would be willing to buy and sell specific securities on their own account.
In a broker market, there must be a defined buyer and seller for a trade to happen. In a dealer
market, buyers and sellers execute buy/sell orders separately and independently through dealers, who
act as market makers.
10. Elaborate the International Capital Markets and its role.

Governments, businesses, and individuals can borrow money or make investments (or both) in the
international capital markets. where new securities are issued, with stocks and bonds being the most
popular. The money from this sale or issuance goes to the corporation.

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NAME: LAGRIMAS, SARAH NICOLE S.

1. Why do employers value having employees with professional certifications?

2. Is the goal of maximization of shareholder wealth necessarily ethical or unethical?

4. What is corporate governance? Sarbanes-Oxley Act of 2002?

5. Define financial institutions. What is the difference between Commercial and

7. What is the Money Market and Eurocurrency Market?

9. Describe Broker Markets and Dealer Markets

10. Elaborate the International Capital Markets and its role.

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