Business Discussion 10 Essay

877 Words Nov 20th, 2014 4 Pages
1. Regulations (Chapter 10)
How have recent financial disruptions changed the ways that financial markets are regulated? The subprime mortgage crisis is a huge example of a financial disruption that changed the ways that financial markets are regulated. Since bankers were giving out subprime mortgages that the house buyers could not repay, the house buyers all obtained way too much debt that they could not pay back. Because people couldn’t pay back their debts then they got foreclosed. Since this screwed up our entire economic status there have been a lot of regulations on that market.

2. Bonds (Chapter 10)
Describe the basic features and characteristics of bonds. What is a convertible bond and why do investors find such bonds
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· Limit order: An order placed with a brokerage to buy or sell a set number of shares at a specified price or better. Because the limit order is not a market order, it may not be executed if the price set by the investor cannot be met during the period of time in which the order is left open. Limit orders also allow an investor to limit the length of time an order can be outstanding before being canceled. 5. Information about the Stock Market (Chapter 10)
In addition to reporting a stock's closing price, most financial websites provide additional information about the stock, including its market capitalization, price-earnings ratio, earnings per share and dividend and yield. Define each of these measures and provide a brief explanation of its significance. · Market capitalization: The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying a company's shares outstanding by the current market price of one share. The investment community uses this figure to determine a company's size, as opposed to sales or total asset figures.
· Price earnings ratio: A valuation ratio of a company's current share price compared to its per-share earnings.
· Earnings per share: The portion of a company's profit allocated to each outstanding share of common stock. Earnings per share serves as an indicator of a company's profitability.

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