Finance Questions

1. One of the items in finance that requires ‘artistry’ is the assessment of risk. What is meant by financial risk? What kinds of risks are there for the financial manager to confront?
2. The performance of financial assets like your savings account and bond holdings are keyed to the yield curve. Take a look at the “Dynamic Yield Curve” at http://stockcharts.com/freecharts/yieldcurve.html. Animate it and see how it changes over time. The explanations of why it changes are very complex and theoretical. What observations do you have about this element of finance theory? Also, please note that www.stockcharts.com is a good source of information for your financial research.
3. We see the stock market rise and fall for reasons unknown. We think we might know about some of the reasons (e.g., the Fed changes interest rate a greater amount than expected), but other things cause wild swings. Does a presidential tweet make the market fluctuate? Does an attack on a tanker in the Persian Gulf? Etc., etc. The attached article gives a concise history of some of the swings and possible causes. What’s wagging what?
4. There are numerous ways how TVM (Time Value of Money) is at work in our daily lives. Give an example or two.
5. Rapid corporate growth in sales and profits can cause financing problems. Why do these occur? What are some of the ways a firm can avoid growing too fast? Can you identify a firm in addition to Starbucks that may have suffered due to too rapid growth or that may have managed that growth in a better (or worse) way? This attached American Express blog might give you some ideas.