Monopoly is less efficient than perfect competition.' To what extent to you agree/disagree with this statement?

Anthony Philbin Managerial Economics - Coursework 1 Monopoly is less efficient than perfect competition.' To what extent to you agree/disagree with this statement? Efficiency is a technical relationship between input and output. To be the technically efficient is when you produce maximum output with the minimum input. Another way of being efficient is being allocatively efficient. This is when a firm produces at the minimum point on its Average cost curve. Perfect competition is when there are a large amount of firms in the industry all producing the same homogenous good. In a monopoly there is only firm in the industry, and it is the sole supplier. This essay will look at the structure of the perfect competition and assess it efficiency. Then we will look at the structure of the monopoly and how efficient it is also. This essay will argue that on balance, perfect competition is more efficient then a monopoly. A perfect competitive industry has certain characteristics. There are many buyers and sellers in the industry. There is perfect knowledge throughout the industry. All products are homogenous goods. There is free entry and costless entry into the industry. All firms in the industry are interested profit maximisation only normal profits will be able to be made in the long run. This is because, if there are supernormal profits being made in the short run, due to an

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  • Level: University Degree
  • Subject: Business and Administrative studies
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Currency exchange is a common phenomenon in the business world and many big corporations and banks do it in large volume and frequently. This analysis has taken into consideration the historical data on interest rates, inflation rates, and exchange rates

THE BANK FOR INTERNATIONAL DEVELOPMENT Currency exchange is a common phenomenon in the business world and many big corporations and banks do it in large volume and frequently. It has been noticed that the time when they convert the currency into their home currency is imperative and that is what makes a significant impact on their balance sheet and hence the revenues. The below work analysis of the case of The Bank for International Development and it is supported by various arguments numerically and graphically. This analysis has taken into consideration the historical data on interest rates, inflation rates, and exchange rates for the United States and Japan over the period January 1996 through October 2005. STUDY QUESTIONS . Compare borrowing costs in yen and dollars over the period. How do nominal rates in each currency compare? BID would pay for dollar issue 539,750,000.00 dollars Value in yen 05750000000.00 yen BID would pay 13945625000.00 yen BID would pay in dollars 538,469,944.71 for the yen issue 2. What is the relationship between interest rates and inflation rates in each currency? As per the fisher effect, we already know that the countries with higher inflation rates have higher interest rates. This is also verified from the graphical representation where we find that inflation governs the way economy experiences the

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  • Level: University Degree
  • Subject: Business and Administrative studies
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Real time gross settlement (RTGS) was introduced in Australia in 1998. Wire a report that analyses the impact of RTGS on the efficiency of Australias payment system and compares RTGS with the settlement process used for non-cash retail size transa

Topic: Real time gross settlement (RTGS) was introduced in Australia in 1998. Wire a report that analyses the impact of RTGS on the efficiency of Australia's payment system and compares RTGS with the settlement process used for non-cash retail size transaction It should be mentioned first of all that the RTGS was first introduced in 1998 and the main rationale behind its introduction was to reduce the settlement risks that were associated with the previous payment system. According to Viney, "RTGS requires each high-value payment transaction to be settled immediately by transfer of exchange settlement account funds (held with the Reserve Bank) from the sending institution to the recipient institution" (Viney 2009, p. 432). In the other words, RTGS transaction is settled individually by its gross value through the exchange settlement (ES) accounts, which are special account in Reserve Bank Australia and are used to settled transactions between banks and institutions. From the beginning up till now, it is also worth mentioning that no less than 75% of the value of non-cash transactions which take place in Australia are made up of a small number of high-value payments which are carried out via the real time gross settlement system (RTGS) (Reserve bank of Australia 2011). One of the main reasons why it can be said that the RTGS system has made Australia's payment system more

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  • Level: University Degree
  • Subject: Business and Administrative studies
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UST is a smokeless tobacco company .What are the primary business risks associated with UST Inc.? What are the attributes of UST Inc.? Evaluate from the viewpoint of a bondholder.

.Question One & Answer What are the primary business risks associated with UST Inc.? What are the attributes of UST Inc.? Evaluate from the viewpoint of a bondholder. Primary Business risks: . Litigation and Legislative problems Litigation and legislation are everyday occurrences in the tobacco industry, even smokeless tobacco manufacturer historically faced less exposure to health related lawsuits than cigarette manufacturers. Lot of litigation against tobacco companies, such as ban on advertising and promotions that appeal to youths, is expected o continue, especially suits filed by individuals. In addition to health related litigation, UST also faced a pending dispute about violating antitrust and advertising laws and participating in anti-competitive conduct. These uncertainties of the litigation and legislative environment increase the risk of UST's credit from the bondholder's point of view. 2. Increasing erosion of market share UST is a smokeless tobacco company with a long tradition and a recognizable brand name. Steadily increasing prices provided a solid boost to earnings and the company's stock price. But, this is one of the characteristics that can be like two edged sward. On one side, company with long tradition is expected to operate in a stable and prosperous way as it always did, but on the other side, company itself can get too self-confident and fail

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  • Level: University Degree
  • Subject: Business and Administrative studies
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Customer's and Lender's perspectives

The customer's and lender's perspectives 26 March 2010 BCFS Bank CONTENTS: Executive Summary 5 Introduction 6 Business report 7 Business entity suggested to customers 7 Recommendations to BCFS bank 9 Financial services proposed to business in Canterbury 11 Current trends of retail, leisure and tourism sectors 13 Conclusions 14 Recommendations 15 Appendixes 16 References 17 Executive Summary The aim of this report is to advice Mrs. Lindsey Warner and Mr. Bryan Child (customers) with the most suitable business entity for their enterprise as well as the BCFS bank (lender) about the main considerations when lending money to the customer. Mrs. Warner and Mr. Child plan to start up a business by opening cafe tea room, retail shop with online sales operations and B&B services in Canterbury, Kent. The total amount needed to start up business equals to £2,500,000. It is financed by BCFS bank, other creditors and privately by customers. Mrs. Warner plans to invest £500,000 and Mr. Child - £800,000. Mrs. Warner's equity hold in private property equals to £850,000 whereas Mr. Child's has and equity of £1,600,000 in his property. The business owners are married and possess private houses jointly with their partners. After the comparison of different aspects of various business entities i.e. partnership, private limited company and limited liability partnership as

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  • Level: University Degree
  • Subject: Business and Administrative studies
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The Search for Ralative Value in Bonds.

The Search for Relative Value in Bonds Asset swaps are a seductive, but incomplete, approach. May 2006 Abstract Asset swap spreads are a widely used metric for identifying relative value in bonds. We document that this approach breaks down because different benchmark credit curves have different slopes and spread volatilities. If credit default swaps augment the relative value analysis, portfolios return to their original spread duration exposures. Apparently disparate portfolios are returned to an approximately equal footing. The Search for Relative Value in Bonds . Introduction Fixed-income investors have long sought a one-dimensional measure of bond attractiveness. With such a measure, security valuation is reduced to a single test. The highest scoring portfolio in today's metric is likely to have the highest (risk adjusted) total rate of return over the coming periods. Yield to maturity is perhaps the most prominent example. Despite flaws that have been well known and well understood for more than 30 years, yield to maturity is still commonly employed in fixed income investors' investment selections and their predictions for holding period returns [see, e.g., Homer and Leibowitz (1972) and Schaefer (1977)]. Potential errors from this approach can be large, especially when a mixture of coupon paying bonds and zero-coupon bonds is under consideration because

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  • Level: University Degree
  • Subject: Business and Administrative studies
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Explain whether appropriate policies could have prevented the East Asian crisis.

2. Explain whether appropriate policies could have prevented the East Asian crisis. In 1995, a number of economists had begun to wonder whether the countries in East Asia might be vulnerable to a Latin-type crisis. The main objective indicator was the emergence of large current account deficits. Upon closer examination, economists discovered that several countries had developed worrying financial weaknesses: heavy investment in highly speculative real estate ventures, financed by borrowing either from poorly informed foreign sources or by credit from under-regulated domestic financial institutions. And then Thailand gave in to pressure and floated the baht in July 1997. Speculation against the other regional currencies became widespread and thus the Asian crisis was born. Given the warnings issued by the World Bank and the IMF to Thailand and Malaysia of the risks posed by their financial situations and urged corrective action, it remains unclear if appropriate policies could have prevented the crisis. Before this can be properly assessed, the root of the crisis must first be identified. First-generation models, exemplified by Krugman in effect explain crises as the product of budget deficits: it is the ultimately uncontrollable need of the government for seignorage to cover its deficit that ensures the eventual collapse of a fixed exchange rate, and the efforts of investors

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  • Level: University Degree
  • Subject: Business and Administrative studies
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Polaroid Finance Case Study.

Polaroid Corporation, 1996 2/10/2011 Financial management . The main objectives of the debt policy proposed by ralph are Bond rating - Polaroid faces a chance of possible damage to its brand name if its bond rating drops from BBB status to BB. They will also lose access to financing from some large investors like pension funds and charitable trusts because they are barred from investing in noninvestment-grade debt. Flexibility - the more the debt you have the lower your cost of capital and the more the debt you have the higher your chances are to lose investment trade rating. Flexibility is the ability of a company to raise new funds when the need arises. As much as any organisation would like to enjoy the benefits of the two contradicting scenarios above, it has to be careful because they can both reduce the organisations flexibility. Value creation - a company is in business to create value and this can be achieved with an optimal cost structure. Ralph Norwood should thrive to create value by ensuring that the company has access to financing when it needs it and at the lowest possible WACC. 2 a. Financing requirements Debt repayments Capital expenditures Working capital b. risks associated with polaroid's business and strategy Business risks - Business risk refers to the degree to which the company lacks the capability to manufacture and sell a product to

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  • Level: University Degree
  • Subject: Business and Administrative studies
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Report on acquisition. This report is prepared to examine different offers proposed by the Alpha Plc to Delta Plc in acquisition of the target company. It is to analyze that which offer is most beneficial for acquiring company and vice versa and to recom

Report on offers proposed by Alpha Plc acquiring Delta Plc M.Ali Merchant 24 February 2012 Contents . Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . .3 2. Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 3. Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 4. Findings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 5. Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 6. Recommendations. . . . . . . . . . . . . . . . . . . . . . . . . . . 13 7. List of References. . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Executive Summary: This report is prepared to examine different offers proposed by the Alpha Plc to Delta Plc in acquisition of the target company. It is to analyze that which offer is most beneficial for acquiring company and vice versa and to recommend offers to be negotiated by each company. The report draws attention to the fact that each offer consist of different combination of offers including cash and stock. Each offer is valued to £360,000,000 but with different cost of acquisition of Delta Plc which is calculated later in this report. Calculations in this report to analyze offers includes Target shareholders' gain - (the premium), Acquirer's gain and The post-merger values of the combined companies. This

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  • Level: University Degree
  • Subject: Business and Administrative studies
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MIcrofinance & Role of Women

MICROFINANCE AND ROLE OF WOMEN CHANGING MANAGEMENT PARADIGMS INDIRA INSTITUE OF BUSINESS MANAGEMENT, NAVI MUMBAI Welingkar Institute of Management, Development & Research TABLE OF CONTENTS EXECUTIVE SUMMARY 3 INTRODUCTION 4 MICROFINANCE 4 MICROFINANCE AND THE ROLE OF WOMEN 5 MICROFINANCE - A RAY OF HOPE 7 CHANGING PARADIGMS AND INVOLVEMENT OF WOMEN 10 FEMINIST EMPOWERMENT PARADIGM 13 ANAND MILK UNION LIMITED (AMUL) 14 SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD (SMGULP) 15 RURAL / URBAN CENTRIC 16 MICROFINANCE VENTURES IN EMERGING ECONOMIES 17 REVENUES vs. SOCIAL RESPONSIBILITY 20 THE DOUBLE BOTTOM-LINE 21 CONCLUSION 22 REFERENCES 24 EXECUTIVE SUMMARY In today's world, mostly the developing nations, the concept of micro-financing has become a popular jargon thanks to the Grameen Bank, a novel initiative from Bangladesh to finance the poor for starting their individual businesses and becoming economically stable. This management tool promises a bright future for the poverty stricken population of a country, to provide them with a hope of livelihood through small-home businesses in order to improve socio-economic levels and above all provide empowerment to the women. At the same time, the concept shows the road to self-sustenance, encourages self-help groups with a dedicated focus on the Bottom of Pyramid of an economy to empower them. If catered and empowered

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  • Level: University Degree
  • Subject: Business and Administrative studies
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