Busıness Fınance Iı

Yanıt Açıklaması: DePamphilis (2003) describes M&A process in 10 phases.

Yanıt Açıklaması: Market risk can be defined as the risk related to a financial institution’s financial condition resulting from unexpected market movements in the price level of certain risk factors.

Yanıt Açıklaması: In subjugation style, acquired and the acquirer companies are usually in the same industry. The acquirer company makes rapid changes in the organization of the acquired company. Executives are changed, and the identity is dissolved. That means, the acquired company’s configuration is dissolved, and the need for integrating in order to benefit from synergy is high. Synergy is generally expected in terms of economies of scale and economies of scope. The correct answer is D.

Yanıt Açıklaması: This sentence is not correct it should be like A

Yanıt Açıklaması: Payments for goods and services are among the type of business according to the balance of payment, not among the economic relations.

Yanıt Açıklaması: The Basel Committee defines the historical simulation methodology as a simulation approach that calculates the hypothetical change in the value of the current portfolio in the light of actual historical movements in risk factors (Basel Committee on Banking Supervision, 1996b). The correct answer is C.

Yanıt Açıklaması: According to text it should be nominal exchange rate

Yanıt Açıklaması: Market risk can be defined as the risk related to a financial institution’s financial condition resulting from unexpected market movements in the price level of certain risk factors. These risk factors can be categorized into four main classes: equity prices, commodity prices, foreign exchange rates, and interest rates. The correct answer is A.

Yanıt Açıklaması: Basel uses two main methods to assess market risk Value at Risk(VaR) Expected Shortfall(ES)

Yanıt Açıklaması: The Basel Committee defines the historical simulation methodology as a simulation approach that calculates the hypothetical change in the value of the current portfolio in the light of actual historical movements in risk factors (Basel Committee on Banking Supervision, 1996b). The correct answer is B.

Yanıt Açıklaması: Terminal value of a firm refers to the value of all future cash flows expected from a company

Yanıt Açıklaması: With the enhancement of the Basel-II, the Basel Committee added a new class of risk into the calculation of risk-based capital charges. The Committee defined the operational risk as the “risk of loss resulting from inadequate or failed internal processes, people and systems or from external events”.  This definition includes human error, fraud and malice, failures of information systems, problems related to personnel management, commercial disputes, accidents, fires, and floods. In other words, its scope seems so wide that, with no significant prior data available to extract a meaningful and accurate risk profile, the practical application is difficult to immediately perceive. The correct answer is C.

Yanıt Açıklaması: Acquisition is taking a controlling ownership in another firm, subsidiary of another firm, or business unit of another firm by an acquirer firm. The acquired firm may continue its existence after the acquisition as a subsidiary of the acquirer. In the opposite position, a divestiture is a sale of all of a company or all of a business/product line to another party in exchange for cash or securities. That means that for an acquired firm, the transaction is a divestiture, while for an acquirer it is an acquisition. The correct answer is B.

Yanıt Açıklaması: Statutory merger and subsidiary merger are kinds of merger where one firm is bigger or powerful than the other. Merger of equals does not include significant amount of premium payment for target firm shareholders. These statements are true for mergers.

Yanıt Açıklaması: Net asset value is the value of assets minus value of liabilities of a firm. Book value is the value of assets that are recorded at a date, at a value, by accounting records. Liquidation value is the value that could be realized if a company were sold individually and not as part of a going concern.

Yanıt Açıklaması: It should be big size

Yanıt Açıklaması: A company can repuchase that is why it not correct.

Yanıt Açıklaması: International Joint Venture (IJV): An IJV is an agreement by two or more companies, one or more is foreign, to produce a product or service together. It involves a much higher level of investment and therefore of risk than the previous entry strategies. Generally, an IJV consists of a multinational corporation and a local partner. Equity proportions vary but usually relative ownership approximates to 50–50 although there are many variations including IJVs with more than two partners including relatively passive partners with minority holdings. The correct answer is B.

Yanıt Açıklaması: For funding investments and/or other cash uses by medium and long-term sources, the companies have four different alternatives. These are generally in the forms of bank borrowing, borrowing from special institutions, debt issuance and equity finance, securitization. Furthermore, depending on the peculiarities of the funding needs leasing can be another source of medium and long-term financing. Additionally, the internal sources such as Retained Earning and Depreciation provide financing to the corporate. Therefore, the correct option is B.

Yanıt Açıklaması: Extreme value theory (EVT) studies the tail of distributions and deals with the asymptotic behavior of the extreme order statistics of a random sample, such as the maximum or minimum order. The correct answer B.