Hi, need to submit a 250 words essay on the topic Money and Banking.

The capital asset pricing model functions on the assumption that all the involved stocks in the investment portfolio are risk-averse. The investors who apply the model in the determination of stock portfolio are price takers.

Stock price can never be predicted with certainty because of the volatility of the economic environment. Additionally, the prices of different companies are independent of each other. The economic dynamism does not favor all stock. This explains that the ‘hot’ stock tips are not valuable.

During a financial crisis, there is a liquidity problem. The problem requires the acquisition of sufficient funds to resolve the crisis. The repurchase of the shares of the commercial banks is not prudent.

An increase in the return on equity reflects the high performance of a bank. Good performance indicates that the senior executives are running the bank in an efficient and effective manner. The return on equity indicates the marginal return of the use of the shareholders holding in the bank.

The market conditions do not favor only specific performer. The market is usually dynamic given the fact that the market players face unsystematic risks in the course of their operations. This makes different firms emerge winners in different

The responsibility of the directors of a corporation is to provide a return to shareholders on their financial investment in the corporation; in other words, shareholders expect to make money on their investment. Corporations such as Facebook, Google, and Apple are financed through the sale of billions and billions of dollars in shares purchased by investors. Sometimes, however, the duty to maximize profits runs contrary to legal, but still questionable, business opportunities.

Assume that you’re the director ofoneof the corporations listed below and have been presented with the business opportunity described in the scenario. Would you advise the corporation to accept the opportunity? Make sure to fully explain your answer, considering both the financial return expected and any related ethical concerns.

• ToyCo has just been informed that its wooden trains produced in China contain lead paint and can no longer be sold in the United States.However, a distributor offers to negotiate a deal with a foreign company to sell the trains in a South American country that has no laws addressing the presence of lead paint in children’s toys.
• BabyHealth is seeing decreasing sales of its powdered infant formula in the United States due to more and more mothers choosing to breastfeed their babies. In an effort to offset these losses, BabyHealth chooses to sell their formula in third-world countries.However, it is widely known that the water sources in these countries is often contaminated and not boiled prior to use.
• After producing 10 million versions of its new smartphone, PhoneLand discovers that due to a manufacturing oversight, some of the phones may catch fire if left in a car on a hot day. While the worst case financial impact from the phones catching fire is $10 million in damages, recalling and repairing the phones will bankrupt the company.