Solve for output-per-person in the basic Romer model. Critically assess the effect that technological

SUBMITTING YOUR ANSWER-FILE YOU AGREE TO THE TERMS OUTLINED IN THE DECLARATION IN
Answer ONE question
Solve for output-per-person in the basic Romer model. Critically assess the effect that technological
advancement could have on the balanced growth path and provide the intuition for your results.
Consider the household problem in a benchmark two-period OLG framework. Using the following
functional form for the utility function
𝑈(𝑐ଵ௧, 𝑐ଶ௧ାଵ) = ln(𝑐ଵ௧) + 𝛽𝑐ଶ௧ାଵ
derive the level of savings, consumption when young and consumption when old. Critically assess the effect that a change in labour productivity could have on household’s savings decision and provide the intuition for your results.
Answer ONE question
Consider a profit maximising firm that operates in a perfectly competitive market. The firm uses a constant return to scale Cobb-Douglas production function with three inputs into production: Physical capital: 𝐾, labour: 𝐿, and human capital: 𝐻
a) Show the effect that human capital has on marginal product of capital and marginal product of labour and provide the economic intuition.
b) Using this modified model of production, explain why capital may flow from poor to rich countries Consider the Solow model with a profit maximising firm that operates in a perfectly competitive market.
Assume the following Cobb-Douglas production function
𝑌௧ = 𝐴̅𝐾௧
ଵ/ଷ𝐿௧
ଶ/

Develop and critically evaluate your action plan for the future, in relation to achieving your personal finance goal/s identified.

Read scholarly articles published in scholarly refereed journals, and explore Bloomberg and other sources, related to your chosen personal financial issue.

Applying theoretical concepts and strategies as derived from scholarly journals and other sources to your practical personal finance issue, develop and critically evaluate your action plan for the future, in relation to achieving your personal finance goal/s identified.

Identify a well-defined focus for enquiry; plans and undertakes investigative strategies using a defined range of methods.

SUMMATIVE INDIVIDUAL BUSINESS REPORT

GENERAL INSTRUCTIONS TO CANDIDATES:
The paper is expected to be not more than 1000 words. Please do ensure that the submission is typed . Make sure that your name and ID Number are on the assignment. This assignment constitutes 50% of your overall mark for this module.
It is recommended that you use Times New Roman, Font size 12 and double space. This is just a recommendation
INTENDED LEARNING OUTCOMES
Knowledge and understanding
Collect and judge information from a variety of authoritative sources, using pre-defined theoretical frameworks, tools and concepts to inform a choice of solutions to problems.
Skills
Identify a well-defined focus for enquiry; plans and undertakes investigative strategies using a defined range of methods; collect data from a variety of sources and communicates results effectively in an appropriate format; use interpersonal and communication skills to clarify tasks, identify and rectify issues in a range of contexts.

What is an opportunity cost rate? How is this rate used in discounted cash flow analysis, and where is it shown on a time line? Is the opportunity rate a single number that is used to evaluate all potential investments?

Principle of Finance
What is an opportunity cost rate? How is this rate used in discounted cash flow analysis, and where is it shown on a time line? Is the opportunity rate a single number that is used to evaluate all potential investments?

An annuity is defined as a series of payments of a fixed amount for a specific number of periods. Thus, $100 a year for 10 years is an annuity, but $100 in Year 1, $200 in Year 2, and $400 in Years 3 through 10 does not constitute an annuity. However, the entire series does contain an annuity. Is this statement true or false?

If a firm’s earnings per share grew from $1 to $2 over a 10-year period, the total growth would be 100%, but the annual growth rate would be less than 10%. True or false? Explain.

Would you rather have a savings account that pays 5% interest compounded semiannually or one that pays 5% interest compounded daily? Explain.

“Short-term interest rates are more volatile than long-term interest rates, so short-term bond prices are more sensitive to interest rate changes than are long-term bond prices.” Is this statement true or false? Explain.

The rate of return on a bond held to its maturity date is called the bond’s yield to maturity. If interest rates in the economy rise after a bond has been issued, what will happen to the bond’s price and to its YTM? Does the length of time to maturity affect the extent to which a given change in interest rates will affect the bond’s price? Why or why not?

If you buy a callable bond and interest rates decline, will the value of your bond rise by as much as it would have risen if the bond had not been callable? Explain.

A sinking fund can be set up in one of two ways. Discuss the advantages and disadvantages of each procedure from the viewpoint of both the firm and its bondholders.

Did it matter to frontier stores that the American dollar was backed by gold? Was there a backstop holding the financial system together?

First, read the case Money and Credit on the American Frontier.

Additional readings

Michener, R. Money in the American colonies. Retrieved from http://eh.net/encyclopedia/money-in-the-american-colonies/
Schweikart, L. The non-existent frontier bank robbery. Retrieved from https://fee.org/articles/the-non-existent-frontier-bank-robbery/
Second, answer the questions below. In your initial response to the topic you have to answer all questions:

People often say that the gold standard is unworkable because there is not enough gold in circulation to back up the value of all the cash assets now stored in banks. Did it matter to frontier stores that the American dollar was backed by gold? Was there a backstop holding the financial system together?

Considering that local stores and home-grown banks can organically develop and create their own forms of credit, what good is a national currency, or attempts to connect financial markets beyond the immediate area?
Like credit at a frontier store, Bitcoin has no physical presence, but is merely a string of written characters that represent an account balance. What similar problems of the availability of cash and credit might new digital currencies such at Bitcoin solve? If money and financial instruments evolve, what kind of money is best for our society going forward?
Reflection – the students also should include a paragraph in the initial response in their own words, using finance terminology, reflecting on specifically what they learned from the assignment and how they think they could apply what they learned in the workplace or in everyday life.
Please also note that your answers should be written in your own words. Don’t use quotes from the case.

How were the markets differ prior to the integration of fintech? Support your arguments by quantitative analysis and evidence. Again, you are not required to download specific datasets.

4FNCE004W Introduction to Financial Markets 2021-22

Individual Essay

The assignment is an individual essay. It is of an ‘exploratory’ nature, thus you are not required to download specific datasets. The length of the essay is 2,000 words excluding cover page, references, and appendices.

Required:
Conduct a case study on how financial technology has disrupted  traditional finance and/or financial services and markets. Your case study needs to include the following elements:

Do you think fintech has or has not disrupted traditional finance and/or financial services? Support your arguments with evidence.

Choose a subset of fintech areas (e.g. Blockchain, cryptocurrencies, predictive analytics, big data, high-frequency trading, P2P, smart contracts, AI and Machine Learning, financial regulation and discuss within this subset area how it enhances financial services or markets that exist today. How were the markets differ prior to the integration of fintech? Support your arguments by quantitative analysis and evidence. Again, you are not required to download specific datasets.

Assume that you are a financial analyst who investigate potential investment opportunities in stock markets today. Given the backdrop of COVID-19 and Brexit , what would be your investment recommendation to your clients who are willing to make investments in 2022? Provide maximum two companies that you think are good potential targets.

Identify potential factors that may affect your recommendation.

This essay should be submitted via Turnitin via the module blackboard site. You are expected to understand the university regulation on academic offence. The rules on late submission and plagiarism are applied and fully enforced by the school.

 

Imagine you are doing security analysis on some of the stocks, what happens when you change the expected return? Select a security of your choice and analyse the results.

On page 7.2 of the Excel sheet you should be able to observe the mean returns from the historical data, the standard deviations, correlations and the covariances. Undertake the following:

• Using the historical mean as the expected return, use the portfolio optimisation procedure in the Excel sheet to determine the portfolio weights of the optimal risky portfolio and the optimal complete portfolio. Select your own estimate of risk aversion for the individual stating what would happen if risk aversion changes from your own initial estimate.

• Imagine you are doing security analysis on some of the stocks, what happens when you change the expected return? Select a security of your choice and analyse the results.

• Compare the portfolio weights for both the optimal risky portfolio and the optimal complete portfolio using the portfolio optimisation procedure in the Excel sheet for the three methods to forecast expected returns, a), historical, b) static CAPM, and c) Fama-French 3 factor. Offer an interpretation of your findings.

When your analysis is complete write up your results as if you were presenting them to your client. Use graphs and tables.  Make clear the weaknesses and strengths of your analysis and recommend a course of action for your client.

To what extent is organization XYZ utilizing funding towards programming versus administrative costs and how can the ratio be improved?

For ‘credible data sources’ do not just list the program website and Annual Report. You will need to highlight external sources that can be used to validate the organization’s data. No organization is going to outright say, “we are failing at our mission and are poor at managing money.” This means that you will need to utilize local new outlets  paired with federal financial reports to confirm that the organization is caring for the population claimed and operating effectively.

The Evaluation Methods Grid is also a common area of confusion, to assist a sample is below in addition to the examples provided in the CDC reading.
Evaluation Methods Grid

Evaluation Question

Indicator or Performance Measure

Methods

Data Source

Frequency

Responsibility

List your Evaluation questions in this column . Also, if your questions required revision from Week 3, make certain those changes have been made prior to this submission

To what extent is organization XYZ utilizing funding towards programming versus administrative costs and how can the ratio be improved?

What does a successful answer to this evaluation question result in for the organization or the surrounding served population?