1 Contents

Đề luận giữa kỳ kỳ trước:

C

Futures contract is a standardized contract between two parties to exchange a specified asset of standardized quantity and quality for a price agreed today (the futures price or the strike price) with delivery occurring at a specified future day, the delivery date.

Forward contract is a non-standardized contract between two parties to buy or sell an asset at a specified future time at a price agreed today.

Same: is an agreement between two parties to buy or sell an asset (commodity, curency or financial asset) at predetermined future point in time at predefined price.

Forward contracts

Future contracts

is an agreement between two parties to buy or sell an asset at predetermined future point in time at predefined price.

Non-standardized contract: as per required of customer (quantity, quality, date of delivery)

Is traded on OTC

is a standardized contract between two parties to exchange a specified asset of standardized quantity and quality for a price agreed today (the futures price or the strike price) with delivery occurring at a specified future day, the delivery date.

Standardized

Is traded on an exchange

For importer:

Certainly that payment will be made only upon presentation of the documents confirming shipment of the goods.

The use of the L/C allows importer to avoid or reduce pre-payment. The seller must fulfill all terms contract as indicated in the L/C (shipment of goods, meeting delivery term on stock, amount and deadlines) to receive payment. Having opened a L/C, importer provides his ability to pay and can count on more favourable payment terms in the future.

Documentary credit helps importer significant reduce risk connected with seller not meeting his delivery obligation.

For exporter:

Guaranteed payment upon presentation of the documents specified in the terms of the L/C.

Reducing the production risk for the situations when buyer cancels or changes his order. The liability to structure the delivery schedule according to exporter's interests.

The change to obtain financing for production or purchase of goods (pre-exporter finance)

The change to the get financing of the period between shipment of goods and receipt of payment especially in case of delayed payment.

The buyer cannot refuse to pay due to a complaint about goods. He must raise any complaints/claims about delivered goods separately from L/C, which provides exporter with a significant advantage in resolving such issues.

Depreciation & Amortization are very similar, and are often used in the same way. However, depreciation can refer to the loss in value of a tangible asset (vehicle, machine...) and amortization to the loss in value of an intangible asset (trademark, copyright, goodwill...). This loss over time is treated as a cost and written off (= subtracted from profit) over several years.

· Implementing monetary policy

· Determining Interest rate

· Controlling the nation's entire money supply

· The Government's banker and the banker' bank

· Managing the country's foreign exchange and gold reserves and the Government's stock register

· Regulating and supervising the banking industry

Horizontal: Two companies making the same products combined

Vertical: A company either acquires or merges with another company in an immediately-related stage of production and distribution.

Diversification: A company acquires another company in an entirely different sphere.

Commercial bank

Investment bank

Is a type of financial intermediary which are business that trade in money

Raise fund by collecting deposit from business and customer via checkable deposits saving deposits and time deposits

Makes profit from supplying loan to business and consumers. It also buys corporate bonds and government bonds.

This bank plays an important roles in international payment.

Is financial institution that deals with raising capital trading in securities and managing corporate mergers and acquisitions.

Makes profit from fee and commission they change for their services

They offer many type of services such as issuing and selling securities in the capital market and issuing bonds as well as providing advice on transaction such as mergers and acquisitions.

l Balance sheet shows the financial situation of the company on a particular date (generally the last day of its financial/fiscal year)

l cash flow statement shows the flow of cash IN and OUT of the business between balance sheet dates.

l profit and loss account shows revenue and expenditure

Debentures

Shares

Are documents which are given to people or intitutions who land money to company.

Holders of the debenture do not owwn the company

They do not have a vote

They have no say in earning in business

Their interest must be paid every year

It's paid out before anything is paid to the holders of share

Are the unit of equity ownership in a corporation

Is normally entitled in 4 basic rights of ownership

Claim on a share of the company's undividend asset in proportion to numbers of shareholder.

Proportionate voting power in the election on directors and other business conducted

Receive dividend

Preemptive right to subcribe to additional stock offering before they are available to general public

1.10 Distinguishordinary share and preference share

Ordinary shares are often the only kind of share with voting rights.

Preference shares, as their name suggests, receive fixed dividend, which must be paid in full before any dividend is paid on other shares. But because interest payments are tax deductible, and dividend are not, many companies now issue bonds instead.

· Safer for exporter as it makes sure he will get his money for the goods sold provided that he presents the correct documents.

· Ensure the importer that he will get the good bought as long as he pays for them or agreed to pay to pay in a fixed date in the future.

· Greatly supportive involvement of banks in the transaction process.

Reasons:

· Unexpected late payments and non-payments (bad debts)

· Unforeseen costs: a larger than expected tax bill, a strike...

· An unexpected drop in demand

· Investing too much in fixed assets.

Solutions:

· Credit control: chasing overdue accounts

· Stock control: keeping low levels of stock, minimizing work-in-progress, delivering to customer more quickly

· Expenditure control: delaying spending on capital equipment

· A sale promotion to generate cash quickly

· Using an outside company to recover a debt (called: factoring)

How many types of financial statements are there?

What purposes are they used for?

What are the features of each type?

In the current climate, it is increasingly important for both the management and shareholders to understand their company's financial statements. It is simply because such accounts can provide a detailed overview of the company's success and competence. There are 3 primary financial statements, namely the profit and loss account, the balance sheet and the cash flow statement, which should be included in most companies' annual reports.

First and foremost, the profit and loss account is designed to show revenue and expenditure over a period of time. In other words, it allows owners to see how the business has performed and whether it has made an acceptable profit or not. In detail, the profit and loss account gives figures for total sales or turnover, and for costs and overheads. The first figure should be greater than the second which means a profit has been realized. The profit is paid to the government in taxation, and to shareholders as a dividend, and is retained by the company to finance further growth or to repay debts

Second, the balance sheet reveals the financial situation of the company on a particular date. It consists of the company's assets, its liabilities and shareholders' funds. A business's assets include its cash investments, property and debtors. Meanwhile, liabilities contain all the money that a company will have to pay someone else such as taxes, debts, interest and so on. Notably, assets and liabilities are listed according to their liquidity and term respectively. For instance, 'current assets' appears before 'fixed assets'. The basic equation is that Assets = Liabilities + Owners. Last, the shareholders' funds include share capital, share premium and the company's reserves comprising the year's retained profits.

Last but not least, the cash flow statement, which can be called the funds flow statement or the movements of funds statement, reports the flow of cash in and out of the business between balance sheet dates. Source of funds can be trading profits, depreciation provisions, borrowing and so on. Therefore, applications of funds for example include the purchase of assets, the payment of dividends or the repayment of loans and so on.

In conclusion, the management should consider all of such accounts as the profit and loss account, the balance sheet and the cash flow statement before making any further decisions. They are all useful in determining the current financial "health" of a business.

======

A company's financial statements provide various financial information that investors and creditors use to evaluate a company's financial performance. It is simply because such accounts can provide a detailed overview of the company's success and competence. There are 3 primary financial statements, named the profit and loss account, the balance sheet and the cash flow statement, which should be included in most companies' annual reports.

The first and most recognisable concern to investors and creditors is The BS which report company's financial conditions on special date. It lists company's asset, its liabilities, and shareholder' funds which disclose where investors' money went and where it is now. Furthermore, The balance sheet also lists a company's outstanding debt and equity components, and so debt and equity investors can better understand their relative positions in a company's capital mix. In other words, investors and creditors can rely on a company's financial conditions for both the safety and profitability of their investments.

The second financial statements is profit and loss account or The financial statement of income statement. The financial statement of income statement reports operating results such as sales, expenses and profits or losses. Using the income statemet, investors can both evaluate a company's past income performance and assess the uncertainty of future cash flows. In short, learning operating results during the period from profit and loss account help investors to estimate company's potential and future returns.

The last and most significant financial statements is cash flow statement. It provide information about a company's cash receipt and cash payment. The importance of the cash flow statement is that it shows the exchange of cash between a company and the outside world during a period, and so investors can know if the company has enough cash to pay for expenses and asset purchases.In brieft, investor will know sources and applications of cash and what pays back their investments.

In conclusion, profit and loss account, the balance sheet and the cash flow statement provide significant data for both managers and investors. It is important to carefully extract information from financial statements when building investment and mangement strategy.

In today's modern world, a Central Bank plays an increasingly important role in the economy especially in developing economy. In other words, whether an economy can develop or not partly depends on how well the Central bank performs its primary roles such as ensuring monetary stability, maintaining the stability of the financial system and being the lender of last resort.

Firstly, a Central bank is mainly responsible for ensuring monetary stability to build a 'healthy' economy in the long run. In other words, the Bank has to maintain stable price – low inflation and consequently gains confidence in the currency. To achieve it, the Bank implements monetary policy with themost widely used instruments, namely reserverequirements, discount rate and open market operations. For example, if the US Federal Reserve System wants to increase the money supply, it buys government securities in open market operations and vice versa. That is how a Central bank controls the money supply and then ensures monetary stability.

Secondly, a Central bank is directly in charge of maintaining the stability of the financial system.More specifically, a centralbank has to detect and reduce any threats to financial stability, and make sure the overall system is safe and secure. It monitors and analyses the behavior of the major participants in the financial system and tries to identify potential risks. In addition, a sound and stable financial system is crucially necessary for carrying out monetary policy efficiently.

Last but not least, a Central bank sometimes acts as the lender of last resort to financial institutions in difficulty. For example, when the US financial system is experiencing great shock due to the terrorist attacks in September 2001, the Fed is prepared to provide liquidity through temporary adjustments in the size of open market operations or lending through the "discount window" to eligible financial institutions. This is why the Fed and other central banks are known as "lenders of last resort."

In conclusion, an economy's development is directly determined by such main roles of its central bank as ensuring monetary stability, maintaining the stability of the financial system and being the lender of last resort. Therefore, the government should provide its central bank with the best chances to operate efficiently for the sake of the economy

Most countries have some form of Central Bank serving as the principle authority for the nation's financial matters. As time gone by, the roles of central bank have changed in accordance with the economy's target. However, it still remains the basic functional roles such as ensuring monetary stability, maintaining the stability of the financial system and being the lender of last resort.

(còn lại như đề trên)

Most companies are hardly satisfied with their share price and always want to see it higher and higher. Despite of the fact that the company itself does not receive any cash benefits from appreciation in share price, its managers are always obsessive about the share price. There are 3 main reasons why the share prices are so important to a business.

First of all, the price of a company's shares is often used as an indication of the overall strength and health of a company. In general, if the share price of the company has continued to increase, the company and its management are considered to be doing a good job. In other words, the managers are at risk of being removed from the company if the share price falls too deeply.

The second reason is that a company with high share prices can easily offer new shares to the market to raise capital. Everyone wants to invest their money in successful companies because of safety. Therefore, trying to maintain the price of a company's shares at high level will bring the company opportunities of getting more money from the investors to expand its business.

Last but not least, takeovers are also important reason why the management of a public company would be concerned about its share price. If a company's share price is falling at a rapid rate, it would mean that the company would be more likely to be acquired as the share would be much cheaper and bidders would be better able to make offers to shareholders. As a result, it is the best interest of the management of a listed company to ensure that its share price remains relatively stable so as to ensure that there is litter or no likelihood of being taken over.

======

Most companies are hardly satisfied with their share price and always want to see it higher and higher. Despite of the fact that the company itself does not receive any cash benefits from appreciation in share price, its managers are always obsessive about the share price. There are 3 main reasons why the share prices are so important to a company, including providing bussiness indication, ability to attract investors and prevention of a ,

The first and foremost reaspn is using share price as an indication of the overall strength and health of a company. If the share price of the company has continued to increase, the company and its management are considered to be doing a good job. In brieft, the company is supposed to be doing well when its share is traded at high price in the stock market.

The second factor comes from preventing takeovers.. If a company's share price is falling at a rapid rate, the company would be more likely to be acquired as the share would be much cheaper and bidders would be better able to make offers to shareholders. As a result, it is the best interest of the management of a listed company to ensure that its share price remains relatively stable so as to ensure that there is litter or no likelihood of being taken over.

The third and most significant reason is the ability to attract more investors. Everyone wants to invest their money in successful companies because of safety. Therefore, trying to maintain the price of a company's shares at high level will bring the company opportunities of getting more money from the investors to expand its business.

In conclusion, because of providing indicator of company's business, increasing ability to attract investors and avoiding , share price is one of the major concern of a business. Both companies and investors should cautiously consider a company's share price to building the most efficient business strategy.

Recently, the media has reported about the very successful IPO (initial public offering) of Facebook and Twitter. However, these actions did not benefit them 100%. In this essay, I will discuss about the advantages and disadvantages of offering share to the public.

Listing your company in public exchange can benefit you in many aspects, not only finance. Firstly, of course, your company can gain capital, even huge capital, from selling your shares publicly. For example, Twitter and Facebook gained over one billion dollars through its IPO. Secondly, it can enhance your prestigious, your public image through the price of your shares. Last but not least, when your shares are public, you can attract and retain good managers and employees through liquid equity participation.

On the other hand, having your shares public can also cause several difficulties. The first one is that from your IPO, you have to disclose your finance and business information. It can be useful for your competitors, while you do not have any information about them. Another problem is the agency issue of new shareholders. They can intervene in and change your strategy to develop. And lastly, companies still have to face the risk of not raising enough fund from selling shares to public to cover all the costs.

In conclusion, when you intend to float your company, you need to consider carefully both opportunities and challenges of going public to find out whether your company is really ready for that.

Essay:

Nowadays, acquisitions have become a trend when a company wants to expand its business. However, research has shown that roughly 20 percent of all acquisitions are successful, approximately 60 percent produce disappointing results and the remaining 20 percent are clear failures. For various reasons, it is not easy for the acquiring firm to digest the swallowed company in an acquisition.

The first thing is about integration difficulties. Integration challenges include combining two different corporate cultures, linking different financial and control system and building effective working relationships. Integration is quite complex and requires a large number of activities. If the acquiring firm overlooks that, it can lead to significant problems.

Secondly, some acquiring firms can face large debt. To finance acquisitions, some companies significantly increase their levels of debt. However, high debt can have several negative effects on the firms. For example, because high debt increase the likelihood of bankruptcy, it can lead to a downgrade in the firms' credit rating, which raises the company's cost of debt. As a result, the firms may face financial problems which affect operating efficiency.

Finally, acquisitions make firms become larger and sometimes too large to be efficient. Because of the complexities generated by the larger size, the managers of the firms have to implement more bureaucratic controls to manage the combined firm's operations. As a result, the managers spend a lot of time on these activities and produce less innovation which is the very important factor contributing in the firms' success. In the long run, it is not good for the health of the firms and makes their outcomes worse

====.

Achieving acquisition success has proven to be very difficult. Various studies have shown that 50% acquisitions were failures. Merger can sound so simple: just combine computer systems and merge a few departments, it remains as a tough mission for acquring company to digest the swallowing company due to difficulties in combining cultural , unifying personnels, ,merging company stragy.

The first and most recognizable reason is company differences in the management cultur.. For example, employees at a target company might be accustomed to easy access to top management, flexible work schedules or even a relaxed dress code. if new management removes them, the result can be resentment and shrinking productivity. In brief, there are challenges for both managers and employees assessing the new corporate .

The second factor comes from bulding synergy personnel policy. After integration, staff of both companies may be reorganized. Deciding who stays and who goes, and how to train the survival employees will take time and need great effort of integration team. In short, unifying two workforce can put big obstacles in the way of companies' integration.

The last and most significant reason lies in unifying stratgies of both companies One company may be driven by a sales mentality while another may be focused on innovation. Or decisions in one company may be top down while the other may be used to more participative decision making. As a result, there must be merging of 2 targets of two companies which means changing the whole companies'system,

Inconclusion

Among many methods of payment in international trade, Documentary Credit is the most common one. Documentary Credit, which is often referred as Letter of Credit, is an undertaking issued by an oversea bank to exporter through a bank in exporter's country, to pay for the goods provided that the exporter complies fully with the terms and conditions established by the L/C. Based on this, the L/C can protect both exporter and importer.

Firstly, Documentary Credit can eliminate the risk of non-payment for the seller. Providing that the seller presents all necessary documents as stated in the L/C, the issue bank has to pay for the seller. Therefore, if the buyer breaches the contract, the seller still receives the money. Moreover, the L/C is separated from the contract, so that if the buyer has anything to complaint about the goods, the bank still has to pay the seller first, then the two parties will resolve the dispute on their own.

On the other hand, Documentary Credit can also protect the buyer from the risk of wrong goods, missing goods or inferior goods. The bank will comply strictly according to the terms and conditions written in the L/C. For example, if the goods are damaged, the exporter cannot get a clean bill of lading. Thus, he cannot take the payment from bank.

To conclude, Documentary Credit is the most common choice of all importers and exporters around the world. When the trust has been built in both parties, they may switch to other less cost-consuming method of payment.

10 years ago, terms "ATM", "cash card", "internet banking" are strange with most Vietnamese people. However, nowadays, these words become part of our normal lives. This happening proves great changes in personal banking recently in Viet Nam.

Firstly, instead of buy gold to save, now people deposit their money in the bank. It is common that most Vietnamese households have a saving account at local bank. Banks now also offer a variety of saving accounts which allow clients to choose among different maturity and purposes, such as: saving account 18 years for children, saving account for retirement, saving account for studying abroad, etc.

Secondly, transferring money through banks has become popular. For example, in the past, college students needed to go home to get subsidy from their parents. However, at the current time, they usually have a debit card alongside which their parents can directly transfer the money to through banks.

Last but not least, along with the development of e-commerce, payment services at banks also thrive. Customers who have taken part in online transactions are all familiar with the payment through internet with their checking account at banks. In addition, when shopping at huge mall, consumers often use their debit card or credit card in order to both protect themselves from pickpockets and pay in a faster way.

To conclude, personal banking will get more and more popular in our daily lives.

Along with economic growth, banking financial services in viet nam are significantly improved. Nowadays, everyone in viet nam can acess banking services through bank system placed all over the country in order to make payment, tranfermoney or other services. and that proves considerable changes in personal banking services in viet nam including

The first and most reconizable is diversifying in banking product. Banks offer a variety of services for customers including cash money, giro, standing order , direct debit and other services with different purposes for different types of customer from farmers, soldiers, to college students To sum up, personal banking product have be built in many new forms to atract new target customers

The second changes is that transfering funds through banks is now widely accepted in many sectors of line. For example, workers are paid through bank and they use atm card to withdraw money instead of using factory payroll. In addition, students can pay intitution fee or order books by using card or internet banking. In brief, almost transactions in vietnamese people lives are tend to be non cash payment.

The first and most significant change is spending habit of Vietnamese people. In the past, they often saved a large amount of money in long period of time, and t only spend saving money in emerency situations. Nowadays, more and more people using credit card to make payment which means using borrowed money from bank to pay for normal life transaction. In short, credit card is a revolution in vietnamese expenditure custom

IN conclusion, positively effect...

r

Documentary credit (also Letter of credit) has increasingly become the first and last resort for many credit executives attempting to eliminate transaction risks, and it is essential to trade, particularly important to international commerce. However, it is not always the best way to finance foreign trade because of its disadvantages to both importers and exporters.

Why is it choosen so widely??? (advantages)

- firstly, L/C reduces the risk of non performance by both sides. In international trade, as the seller and the buyer are in different countries, there is a common problem of payment due to the difference of time between dispatch and delivery. Obviously, seller would like to receive payment for the goods when delivering them to the carrier and the buyer would prefer to delay the payment until receipt of the goods. Thanks to L/C, exporter can eliminate credit risk whereas importer can have its shipment assured. Furthermore, with the participation of banks, all documents are examined strictlly in compliance with the terms of the L/C, so if any discrepacies arise, cash recovery will be much more easier.

Are there any risks or disadvantages for the exporter and the importer when they decide to use documentary credit? (disadvantages)

Exporter:

- Obviously, L/C takes more time than other methods of payment. As mentioned above, strict compliance is required for payment. Unless all the documents are 100% compliant with the terms and conditions of the L/C, the bank will not issue payment.

Importer:

- Because LC is operated on the basis of documentation, not verification of quantities and qualities, so the importer have to mention all necessary terms (for example quality certification) in detailed if he want the goods to be delivered meet the requirements.

Besides, the cost of this kind of payment is also more expensive than others because it may include issuing, receiving, negotiating, and other fees associated with L/C.

Merger and acquisition has become the most prominent process in the corporate world. The key factor contributing to the explosion of this innovative form of restructuring is the massive number of advantages it offers to the business world. However, there are also some disadvantages of resulting business that put the merged firms into troubles.

The very first advantage of M&A I want to mention here is synergy. When two or more companies get together and are supported by each other, the resulting business is sure to gain profit in terms of financial gains and work performance.Cost efficiency is another beneficial aspect of merger and acquisition. This is because any kind of merger actually improves the purchasing power and reduces the costs. Moreover, with a merger it is easy to diversify the products, services and long-term prospects. The target business may be able to offer you products and services which you can sell through your channels. Apart from the factors above, reasons for acquiring companies include getting stronger position in a market and larger market share, reducing competition, and benefiting from economies of scale.

Besides, there are also a number of good arguments against mergers and acquisitions. The first thing is that diversification can damage the company's image, good will and shared values such as quality, good service, innovation, etc. Staff redundancy is also a big problem if what made the company special was human capital rather than its products and customer base. When the top executives are replaced, it may have an effect on motivation. Furthermore, there may be a conflict of objectives between different businesses, meaning decisions are more difficult to make and causing disruption in running of the business.

In conclusion, before making any decisions, it is necessary to consider carefully gains and losses because everything has its two sides. This will help you reduce the risks and get benefits as much as possible.

Merger and acquisition has become the most prominent process in the corporate world. However, achieving acquisition success has proven to be very difficult, while various studies have shown that 50% of acquisitions were unsuccessful. The reasons are very diverse but I want to mention here three main ones.

I think the first reason is that they gauged the strategic fit wrongly. If the acquisition is too far outside the parent company's core competency, things are not likely to work. For instance, a company that sells to its business customers through catalog and Internet sales will not suitable with a company that relies on direct sales even if the products arein the same industry. Therefore, you should ask whether the target company fits your strategy, your operations, and your distribution channels.

The second reason is that they did not understand clearly the new company's culture. Just because your two companies are in the same industry does not mean you have got the same culture. The difference between the working styles can cause the conflicts between the staff or even the conflicts at the management level, meaning decisions are more difficult to make and causing disruption in running of the business.

One more reason making the failure of acquisition is that they did not communicate clearly or enough. In the absence of information and communication, rumors will fly and people at the acquiring company will assume the worst. They should communicate to the entire team clearly and honestly and consistently, not just the top executives.This will make the staff less confused and more concentrated on their work.

(M&A) have become a trend in the world. M&A transactions bring separate companies together to form larger ones which help companies survive in the competive finance industry. However, there are also some disadvantages of resulting business that put the merged firms into troubles.

The very first advantage of M&A I want to mention here is synergy. When two or more companies get together and are supported by each other, the resulting business is sure to gain profit in terms of financial gains and work performance.Cost efficiency is another beneficial aspect of merger and acquisition. This is because any kind of merger actually improves the purchasing power and reduces the costs. Moreover, with a merger it is easy to diversify the products, services and long-term prospects. The target business may be able to offer you products and services which you can sell through your channels. Apart from the factors above, reasons for acquiring companies include getting stronger position in a market and larger market share, reducing competition, and benefiting from economies of scale.

However, there are drawbacks mergers and acquisitions. The first thing is that diversification can damage the company's image, good will and shared values such as quality, good service, innovation, etc. Staff redundancy is also a big problem if what made the company special was human capital rather than its products and customer base. When the top executives are replaced, it may have an effect on motivation. Furthermore, there may be a conflict of objectives between different businesses, meaning decisions are more difficult to make and causing disruption in running of the business.

Inconclusion, both advantages and disadvantages do exist in a mand a transaction. companies should cautiously evaluate gains and losses to building the most efficient business strategy.

There is no doubt that exchange market has changed dramatically since the introduction of derivatives. A derivative is a financial security, such as an option or futures contract, whose value depends on the performance of an underlying security or asset.In the present age, they are playing an increasingly important role in investors' portfolio.

The first and most important role of derivatives could be risk management. Risk manager is the process of identifying the desired level of risk, determining the actual level of risk and altering the later equal to the former. The process can fall into the hedging and speculation. If you hedge, you make transactions that are designed to reduce risk regarding a particular price, interest rate or exchange rate. A speculator anticipates future change in a market and makes risky transaction, hoping to make a gain

Secondly, derivatives are also used to provide leverage or gearing, such that a small movement in the underlying asset can cause a large difference in the value of the derivative. If the value of the underlying asset move correctly the way the investors expect, they can obtain huge spread. For example,if you think a share worth 100 $ will rise, you can buy a call option give the right to buy at 80 $. Consequently, you can earn 20 $ value of options.

Moreover, the widely recognized benefit attributed to derivative instrument is price discovery. Futures market price depends on a continuous flow of information from around the word and requires a high degree of transparency. A range of factors impacts supply and demand of asset as well as the value of underlying asset in derivatives contract. The way people absorb it constantly changes the price of commodity.

Ultimately, derivatives such as futures, options and swap developed to allow companies to reduce uncertainty by guaranteeing future prices at a reasonable cost. So, they allow companies to plan more effectively.

There is no doubt that exchange market has changed dramatically since the introduction of derivatives. A derivative is a financial security, such as an option or futures contract, whose value depends on the performance of an underlying security or asset. Derivatives provide three important economic functions: (1) risk management, (2) price discovery, and (3) transactional efficiency

The first and most important role of derivatives could be risk management. Risk manager is the process of identifying the desired level of risk, determining the actual level of risk and altering the later equal to the former. The process can fall into the hedging to reduce risk, or speculation to engage in highly risky financial transaction. In short, derivative is an useful way for managing risk depending on the manager's purposes.

The second function of derivatives is used as a tool for transactional efficiency. Derivatives significantly increase market liquidity. As a result, transactional costs are lowered, the efficiency in doing business is increased, the cost of raising capital is lowered, and the amount of capital available for productive investment is expanded. In short, derivatives help to provide adequate liquidity in finance transaction

The last and widely recognized benefit attributed to derivative instrument is price discovery. Futures market price depends on a continuous flow of information from around the word and requires a high degree of transparency. A range of factors impacts supply and demand of asset as well as the value of underlying asset in derivatives contract. As a result, the way people absorb it constantly changes the price of commodity.

Ultimately, derivatives such as futures, options and swap developed to allow companies to reduce uncertainty by guaranteeing future prices at a reasonable cost. So, they allow companies to plan more effectively.

In the present age, foreign business is playing an increasingly important role in our lives. Therefore, international investment is getting stronger and stronger.However, although the benefits of investing internationally are widely accepted theories, many investors are still hesitant to invest abroad because of huge riskes.

Likely the biggest barriers to investing in international markets are the transaction costs. Although we live in a relatively globalized and connected world, transactions costs can still vary greatly depending on which foreign market you are investing in.In addition, if you are investing through a fund manager or professional manager, you will also see a higher fee structure such as: accounting fee, market research fee, determination value of portfolio fee,...

The next part of concern for retail investors is in the area of currency volatility. When investing directly in a foreign market , you have to exchange your domestic currency (USD for U.S. investors) into a foreign currency at the current exchange rate in order to purchase the foreign stock. The solution to mitigating this currency riskis to simply hedge currency exposure. For instance, you can use derivatives such as swaps, futures to eliminate your risk.

Another risk in foreign markets, especially in emerging markets, is liquidity risk. Liquidity risk is the risk of not being able to sell your stock quickly enough once a sell order is entered.Further, it's so necessary to evaluate the liquidity of an asset before purchase.One method is to simply observe the bid-ask spread of the asset over time.

Investing in foreign market is often a great way to diversify your portfolio and get potentially higher returns. However, for the average investor, measure the international markets can be a difficult task that can be fraught with challenges. By understanding some of the main risks and barriers faced in international markets, an investor can position themselves to minimize these risks.

Inflation is such a commonly used term in the twentieth century. It simply means that is a rise in the general prices of goods and services, resulting in a fall in the value of money.As you can see, it's not so easy to label inflation as either good or bad - it depends on the overall economy as well as government's controlling.

To begin with, there are so many negative effects which have derived from inflation.Uncertainty about what will happen next makes consumers less likely to spend. This hurts economic output in the long run.Beside, People living off a fixed-income, such as retirees, see a decline in their purchasing power and, consequently, their standard of living

Secondly, inflation increase the cost of borrowing so that it make difficult for investors approach the potential loans. Altogether, production cost is also relatively go up and business activities go to wall.

However, one cannot deny that inflation has contributed to the world's economies in many beneficial ways. Inflation is a sign that an economy is growing. In some situations, little inflation (or even deflation) can be just as bad as high inflation. The lack of inflation may be an indication that the economy is weakening.People like to complain about prices going up, but they often ignore the fact that wages should be rising as well.

Finally, you need to know that inflation isn't intrinsically good or bad. Like so many things in life, the impact of inflation depends on specific situation as well as actual purpose.
====

Inflation is such a commonly used term in the twentieth century. It simply means that is a rise in the general prices of goods and services, resulting in a fall in the value of money.As you can see, it's not so easy to label inflation as either good or bad - it depends on the overall economy as well as government's controlling.

To begin with, there are so many negative effects which have derived from inflation.Uncertainty about what will happen next makes consumers less likely to spend. This hurts economic output in the long run.Beside, People living off a fixed-income, such as retirees, see a decline in their purchasing power and, consequently, their standard of living

However, one cannot deny that inflation has contributed to the world's economies in many beneficial ways. Inflation is a sign that an economy is growing. In some situations, little inflation (or even deflation) can be just as bad as high inflation. The lack of inflation may be an indication that the economy is weakening.People like to complain about prices going up, but they often ignore the fact that wages should be rising as well.

In conclusion, negative

Essay

Risk is the potential of losing something of value, weighed against the potential to gain something of value. Risk appears in many activities such as doing business, investing in securities and lending. Reducing risk is not quite easy, however there are some solutions that can help us reduce risk of respective activity to minimum.

In doing business, successful companies generally want to diversify; to introduce products or services and enter new market. However, entering new market may bring the companies risk of failure because of various reasons such as government policy, difference of culture, etc. A good solution for these companies to reduce risk is that they can buy another company with existing products and customers, which is often called mergers and acquisitions. For example, Nestle bought a lot of companies including Kraft foods and Spillers Petfoods to diversify company. As a result, that brought the company huge profits.

For investing activities, especially investing in stocks and bonds, investors can face interest rate risk, volatility risk or default risk. To reduce these risks, the investors can divesify their portfolios. For example, they can invest in both short-term bonds and long-term bonds to reduce interest rate risk. In addition, instead of investing their money in only one company, they can buy stocks of different kinds of companies, which can help them reduce both default risk and volatility risk.

Lending is also a risky field. When you lend money to another person, you can be at risk of not getting money back from that one. Therefore, to reduce that kind of risk, banks generally require borrowers to have enough collateral to guarantee the amount of the loans. Possible collateral includes houses, cars, securites or your saving accounts. If the borrowers can not pay the loans, the banks will be entitled to auction these possessions to get their money back.

Nowadays, when business environment has become more and more competitive, companies have to grow to survive, merging with another company is considered to be one of the best solutions to this problem because it offers many great benefits to firms.

Firstly, merger helps companies achieve synergy and economies of scale. As we know, the more products we make, the lower the cost per unit is. When merger happens, fixed costs are distributed over a large volume of production and that causes the unit cost of production to decline. As a result, company's profit will rise. Therefore, the two companies will work more efficiently together than either will separately.

Secondly, diversification is also another goal of merging. When a company wants to enter a whole new field to reduce the impact of a particular industry's performance on its profitability, it is advisable to merge with another firm rather than set up a new company with new brand, new process, new chains,etc. Merging help us move into a sector which promises greater growth or profits with lower costs.

Last but not least, mergers can give the acquiring company an opportunity to grow without having to really earn it by doing the work themselves - instead, they buy a competitor's business for a price. For example, a beer company may choose to buy out a smaller competing firm, enabling the smaller company to make more beer and sell more to its loyal customers.

3 Đềnhặt trong bộ 30 đề3.1 Internationalfinance

In the present age, foreign business is playing an increasingly important role in our lives. Therefore, international investment is getting stronger and stronger.However, although the benefits of investing internationally are widely accepted theories, many investors are still hesitant to invest abroad because of huge riskes.

Likely the biggest barriers to investing in international markets are the transaction costs. transactions costs can still vary greatly depending on which foreign market you are investing in. In addition, if you are investing through a fund manager or professional manager, you will also see a higher fee structure such as: accounting fee, market research fee, determination value of portfolio fee. To reduce transaction cost and fee, both exporters and importers can use services from an experienced bank which know well about inter law and customs.

The next part of concern for retail investors is in the area of currency volatility. When investing directly in a foreign market , you have to exchange your domestic currency (USD for U.S. investors) into a foreign currency at the current exchange rate in order to purchase the foreign stock. The solution to mitigating this currency riskis to simply hedge currency exposure. For instance, you can use derivatives such as swaps, futures to eliminate your risk.

Another risk in foreign markets, especially in emerging markets, is liquidity risk. Liquidity risk is the risk of not being able to sell your stock quickly enough once a sell order is entered.Further, it's so necessary to evaluate the liquidity of an asset before purchase.One method is to simply observe the bid-ask spread of the asset over time.

Investing in foreign market is often a great way to diversify your portfolio and get potentially higher returns. However, for the average investor, measure the international markets can be a difficult task that can be fraught with challenges. By understanding some of the main risks and barriers faced in international markets, an investor can position themselves to minimize these risks.

3.2 Financing

It is said that it takes money to make money. Ultimately companies need money to run and grow the business and must find a source for the money required to do so. There are 2 main ways in financing business, including issuing bonds and issuing stocks.

When companies need to raise money, issuing bonds is one way to do it. A bond functions like a loan between an investor and a corporation. The investor agrees to give the corporation a specific amount of money for a specific period of time in exchange for periodic interest payments. All bondholders get the exact same deal with the same erest rate and maturity date, there fore, companies will predict precisely how much debt must be paid every year. Furthermore, interests companies may use bond's interests whichare treated as costs as the tax shield. In brief, Bonds bring annual cash flow, generating cost for tax deduction.

The other option is equity financing issueing shares. A share is a evidence of enternal ownership of a portion of the company. Therefore, it doesn't come attached with an obligation to pay. The company can issue and sell shares and use that money without worrying about monthly payments or loan due dates. Financing with equity conserves cash flow. On the downside issuing shares means that the company have to share its profit for stockholder in form of dividend, which means giving up future upside potential in the businesss. To sum up, Stocks raise long term funds for running companies' business.

. Debt is usually used for working capital and shares are issued to cover the large capital outlays. Most companies use both methods to creat the most efficient debt to equity ratio that fit their business strategy.

Homework:Họ và tên: Nguyễn Hồng Nhung
Lớp: Anh03 – TCNH K51
Mã sinh viên: 1213330063

One of the most important questions investors can ask themselves is whether to invest in debentures or stocks. Both of debentures and stocks are financial instruments which are used for transfer funds from lenders to borrowers. However, there are major distinct qualities between them including the difference in ownership rights, voting rights and the way securities holders being paid.

The first difference between these two securities is how the holders own the company.If an investor buy a stock, what are bought is a small piece of ownership in a business. Conversely, the buyer of a debenture is not getting any ownership in the company, but rather buying a piece of the company's debt. In brief, a debenture holder make a loan to the corporation, while a shareholder own a part of corporation.

The second discrepancy is the voting rights of the holders. As an owner of the company, stockholder have special privileges, including the rights to vote on matters that could affect the future of the company. Whereas debenture holders play the role of fund suppliers for running business, and have no say in making company's decisions. In short shareholder control the affairs of the company; but a debenture holder is only a creditor of the company.

The third and most significant divergence lies in the way the holders make money from their securities. Stockholders have the rights to share in the profits of the business, when and if those profits are paid out in the form of . In contrast, Interest on debentures is payable whether there are profits or not as long as the company earns enough money to pay its debt obligations. Therefore, debenture's cashflows are periodically and predictable and more stable than share's.

On the basis of ownership, the rights to vote and profit sharing, debentures are distinct from shares. Investors should seriously consider their differences to choose the best securities that fit the investment strategy.

3.3 Credit card

From meager beginnings in the 1920s, the credit card market has exploded over the years, thanks in large part to the computerization of society. Credit cards revolutionized consumer spending habits and changed the face of business. In today's economy, credit cards represent an important part of household, business and global activity.

For individuals, credit cards are an important part of everyday life. Whether purchasing gas and groceries or reserving a hotel and rental car for an upcoming vacation, credit cards represent a convenient and secure form of payment for consumers. Benefits ranging from damage protection on purchases to the ease of disputing suspicious charges or fraudulent activity make credit cards an attractive form of payment. Beyond the ease of use and added security, credit cards can also help you build a solid credit history. With regular use and prompt payment, responsible consumers will find that lenders are more willing to offer them additional credit in the form of increased credit lines, mortgages and consumer loans.

Credit cards are not only important for individuals and businesses; they're an important aspect of continued economic growth. A February 2013 report by Moody's demonstrates the importance of electronic payments, including credit cards, in a global economy, saying that electronic payments increase gross domestic product and consumption, both of which lead to job creation. Credit cards play an important role in the cycle of increased consumption and production by offering merchants a guaranteed method of payment and providing consumers with a way to bridge the gap between paychecks in times of emergency.

Capital for business formation can be hard to come by for entrepreneurs looking to get a new business off the ground or expand an existing one. For small businesses, credit cards represent an important financial lifeline when traditional funding sources, such as small-business loans, aren't available. Credit cards help businesses financially, and they also have a positive impact on small-business employment growth.

3.4 Interest rate

- You individually. Banks use the prime rate to set rates for credit cards and consumer loans. If you have an adjustable-rate mortgage or a credit card that has a rate tied to the prime rate, payments may rise or fall according to the prime rate.

·
-The whole economy. A change in the prime rate may affect the overall economy in several ways. For example, an increase may result in fewer consumers taking auto loans, which in turn may cause a slowdown in the automobile industry. On the other hand, when interest rates fall, businesses find it easier to finance expansion and other activities. Typically, increases in interest rates slow economic growth because consumers have less money to spend and less motivation to borrow. Conversely, if interest rates drop, the economy may benefit from increased spending.

It's also important to note that generally, as interest rates rise, the value of your investments (particularly bond investments) may decrease. This is known as interest rate risk. While all types of bonds are subject to interest rate risk, you may reduce the risk somewhat by choosing a fund that holds bonds of a shorter duration or average maturity.

he higher the rate, the higher their loans will cost them, and the less they will be able to buy on credit. This is how it affects inflation, If consumer spending goes down, there will be less demand for products and services, thus prices won't rise as rapidly. Interest rates are used by central banks as a means to control inflation.
It also affects the housing market since it will cause people who have purchased properties on too highly leveraged loans to be unable to pay as interest rates rise. Thus they will look to selling their properties. This will cause more property supply on the market, and lower the property prices. This in turn will lead to others to want to cash out on their property investments which they have hoped to hold short- term and bought on interest-only loans. If this happens too quickly, it could cause a steep decline of the housing market. Since most people's wealth are tied to their properties, it will decrease people's net worth.

s,p��]�