stock Question Number One Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $30,000 and has cash on hand of $20,000 contributed by Lanni's owners. For each of the following transactions, identify the real and/or financial assets that trade hands. Are any financial assets created or destroyed in the transaction? Provide proper justification to your answers. (2+2+2+2 marks). a. Lanni takes out a bank loan. It receives $50,000 in cash and signs a note promising to pay back the loan over three years. b. Lanni uses the cash from the bank plus $20,000 of its own funds to finance the development of new financial planning software c. Lanni sells the software product to Microsoft, which will market it to the public under the Microsoft name. Lanni accepts payment in the form of 1,500 shares of Microsoft d. Lanni sells the shares of stock for $80 per share, and uses part of the proceeds to pay off the bank loan. Question Number Two: (2+2+2 marks) a. Financial engineering has been disparaged as nothing more than paper shuffling. Critics argue that resources that go to rearranging wealth (i.e., bundling and unbundling financial assets) might better be spent on creating wealth (i.c.. creating real assets). Evaluate this criticism. Are there any benefits realized by creating an array of derivative securities from various primary securities? b. Although we stated that real assets comprise the true productive capacity of an economy, it is hard to conceive of a modem economy without well-developed financial markets and security types. How would the productive capacity of the U.S. economy be affected if there were no markets in which one could trade financial assets? c. A T-bill has a discount yield of 6.81% based on the asked price, and 6.90% based on the bid price. The maturity of the bill is 60 days. Find the bid and asked prices of the T- bill. Question Number Three a. Explain the following diagram from dividend payment perspective. b. What is a banker's Acceptance and explain its steps diagrammatically? (2) c. Systemic risk was one of the main reasons for 2007-08 financial crises. Discuss the role of systemic risk and support your argument logically. (2) stock Question Number One Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $30,000 and has cash on hand of $20,000 contributed by Lanni's owners. For each of the following transactions, identify the real and/or financial assets that trade hands. Are any financial assets created or destroyed in the transaction? Provide proper justification to your answers. (2+2+2+2 marks). a. Lanni takes out a bank loan. It receives $50,000 in cash and signs a note promising to pay back the loan over three years. b. Lanni uses the cash from the bank plus $20,000 of its own funds to finance the development of new financial planning software c. Lanni sells the software product to Microsoft, which will market it to the public under the Microsoft name. Lanni accepts payment in the form of 1,500 shares of Microsoft d. Lanni sells the shares of stock for $80 per share, and uses part of the proceeds to pay off the bank loan. Question Number Two: (2+2+2 marks) a. Financial engineering has been disparaged as nothing more than paper shuffling. Critics argue that resources that go to rearranging wealth (i.e., bundling and unbundling financial assets) might better be spent on creating wealth (i.c.. creating real assets). Evaluate this criticism. Are there any benefits realized by creating an array of derivative securities from various primary securities? b. Although we stated that real assets comprise the true productive capacity of an economy, it is hard to conceive of a modem economy without well-developed financial markets and security types. How would the productive capacity of the U.S. economy be affected if there were no markets in which one could trade financial assets? c. A T-bill has a discount yield of 6.81% based on the asked price, and 6.90% based on the bid price. The maturity of the bill is 60 days. Find the bid and asked prices of the T- bill. Question Number Three a. Explain the following diagram from dividend payment perspective. b. What is a banker's Acceptance and explain its steps diagrammatically? (2) c. Systemic risk was one of the main reasons for 2007-08 financial crises. Discuss the role of systemic risk and support your argument logically. (2) stock Question Number One Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $30,000 and has cash on hand of $20,000 contributed by Lanni's owners. For each of the following transactions, identify the real and/or financial assets that trade hands. Are any financial assets created or destroyed in the transaction? Provide proper justification to your answers. (2+2+2+2 marks). a. Lanni takes out a bank loan. It receives $50,000 in cash and signs a note promising to pay back the loan over three years. b. Lanni uses the cash from the bank plus $20,000 of its own funds to finance the development of new financial planning software c. Lanni sells the software product to Microsoft, which will market it to the public under the Microsoft name. Lanni accepts payment in the form of 1,500 shares of Microsoft d. Lanni sells the shares of stock for $80 per share, and uses part of the proceeds to pay off the bank loan. Question Number Two: (2+2+2 marks) a. Financial engineering has been disparaged as nothing more than paper shuffling. Critics argue that resources that go to rearranging wealth (i.e., bundling and unbundling financial assets) might better be spent on creating wealth (i.c.. creating real assets). Evaluate this criticism. Are there any benefits realized by creating an array of derivative securities from various primary securities? b. Although we stated that real assets comprise the true productive capacity of an economy, it is hard to conceive of a modem economy without well-developed financial markets and security types. How would the productive capacity of the U.S. economy be affected if there were no markets in which one could trade financial assets? c. A T-bill has a discount yield of 6.81% based on the asked price, and 6.90% based on the bid price. The maturity of the bill is 60 days. Find the bid and asked prices of the T- bill. Question Number Three a. Explain the following diagram from dividend payment perspective. b. What is a banker's Acceptance and explain its steps diagrammatically? (2) c. Systemic risk was one of the main reasons for 2007-08 financial crises. Discuss the role of systemic risk and support your argument logically. (2)