Understanding Financial Concepts: Return, Risk, and Cost of Capital
Chapter 11: Return and Risk
Key Financial Concepts
Percentage Return: (Capital Gain + Dividend) / Initial Share Price
Dividend Yield: Dividend / Initial Share Price
Capital Gain Yield: Capital Gain / Initial Share Price
1 + Real Rate of Return: (1 + Nominal ROR) / (1 + Inflation Rate)
Risk Premium: The return differentials between risk-free treasury bills and risky securities; also known as the added return required by investors to invest in risky securities.
Average Rate of Return: R = (R1 + R2 + …
Read MoreThe Industrial Revolution and Globalization: A Historical Perspective
The Agricultural Revolution and Economic Growth
1. How did the agricultural revolution contribute to the economic growth of the First Industrial Revolution?
The transformation of the agricultural sector was a decisive factor in the economic growth during the Industrial Revolution. Technological advancements in agriculture improved productivity and land cultivation, effectively breaking the Malthusian Trap. This theory posited that population growth, being geometric, would eventually outstrip the arithmetic
Read MoreThe Law of Demand: Definition, Curve, and Exceptions
Law of Demand
Definition: The law of demand states that, assuming other factors remain constant (ceteris paribus), the price and quantity demanded of any good or service are inversely related. When the price of a product increases, the demand for that product will fall.
Description: The law of demand explains consumer choice behavior when the price changes. In the market, assuming other factors affecting demand remain constant, when the price of a good rises, it leads to a fall in the demand for that
Read MoreWelfare State Models: A Comparative Analysis
ITEM 2: MODELS TO THE WELFARE STATE – GLOBALIZATION
2. CONCEPTS: SOCIAL POLICY, SOCIAL WELFARE, AND WELFARE STATE
Social welfare is related to values, while the welfare state (EB) deals with political, economic, and administrative decisions affecting citizens, demonstrated through social policies.
2.1 Welfare
Welfare is a broad term describing services provided to citizens, protecting them from adverse circumstances. In advanced societies, three pillars support welfare:
- Family: Guided by the principle
International Trade and Economic Systems
Measuring International Trade
Balance of Payments
International trade is measured by the balance of payments, which records all economic transactions between a country and the rest of the world within a given period. The balance shows the changes in a country’s international currency reserves. It consists of two accounts:
- Current Account: Records payments for goods, services, and resource use.
- Capital Account: Records the movement of funds from Foreign Direct Investment (FDI), loans, and repayments.
E-Business: Models, Strategies, and Value Creation
Key Terminology
m-commerce, e-commerce, e-business
E-commerce describes the process of buying, selling, transferring, or exchanging products, services, and/or information via computer networks, including the internet.
M-commerce is a subset of electronic commerce and refers to online activities similar to those in e-commerce, but it is limited to mobile telecommunication networks accessed through wireless hand-held devices.
What is E-business?
IBM Definition: The transformation of key business processes
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