Fundamentals Of Finance Example

Fundamentals Of Finance Example Fundamentals Of Finance â€" Assignment Example > IntroductionFundamentals of finance is a broad subject of which has to be put in consideration by any organization, essentially finance plays a significant purpose in the current global market, this finance is directly used in product development, marketing and distribution of which the entrepreneur need to accomplish. All business need finance in order to achieve their goals and objectives of which the need might be in the short run or long run. Generally finance in a business ca either be long term finance or short term, long term is used investments of the fixed assets while short term provides the working capital of the business, the mount of capital and other aspects of investments such as age, character, level of education among others vary from one individual to another and therefore in regard to superannuation, potential investors can clearly be advised a bout their portfolio status. Question 1Year to DecAsset AAsset BAsset CAsset DAsset EABCACDEDC199520.20%26.50%12.70%22.8 0%8.00%19.96%14.47%11.90%199614.60%6.60%14.50%13.00%7.60%12.98%14.25%10.06%199712.20%41.70%20.30%12.20%5.60%19.72%14.63%9.86%199811.60%32.60%17.90%9.50%5.10%17.06%13.07%8.54%199916.10%17.50%-5.00%-1.20%5.00%12.16%6.31%1.76%20004.40%2.60%19.70%12.10%6.10%7.10%10.53%25.98%200110%-9.40%14.70%5.40%5.20%7.24%10.64%7.14%2002-8.10%-26.90%11.00%8.80%4.80%-8.04%1.01%6.84%200315.90%0.00%8.80%3.10%4.90%11.30%11.21%5.32%200427.60%10.80%32.00%7.00%5.60%25.12%24.80%11.16%200521.10%17.60%12.50%5.80%5.70%19.78%15.46%7.08%200624.70%12.30%34.00%3.20%6.00%24.08%23.19%11.04%200718.00%-1.70%-8.90%4.00%6.40%8.68%7.13%2.86%2008-40.40%-24.90%-55.30%16.50%6.70%-40.28%-33.49%-3.74%200939.60%0.30%9.60%-2.00%3.30%25.74%22.28%3.50%E ®12.52%7.48%9.23%8.01%6.07%10.83%10.37%7.95%Appendix question 1Calculation of the photofolio in Australian asset A, B, C, D,EThe working is as follows 1996 ABC = (0.6x14.60)+(0.2x6.60)+(0.2x14.50)ACD = (0.5x14.60)+(0.3 +14.50) + (0.2x13)EDC = (0.6x7.60) + (0.2x13.00) + (0.2x14.50)19 97 ABC = (0.6x12.20) +(0.2x 41.70) +(0.2x20.30)ACD = (0.5x7.60) + (0.3x20.30) +(0.2x12.20)EDC (0.6x 5.60) + (0.2x 12.20) + (0.2x20.30)1998 ABC (0.6 x11.60) + (0.2 x 32.60) + (0.2 x17.90)ACD (0.5 x 11.60) + (0.3 x 17.90) + (0.2x9.50)EDC (0.6x5.10) + (0.2x 9.50) + (0.2x17.90) ABC (0.6x16.10) +(0.2x17.50) + (0.2x5.00)ACD (0.5x16.10) + (0.3x-5.0) + (0.2x-1.20)EDC (0.6x5.00) + (0.2x-1.20) +(0.2x-5.00)ABC (0.6x4.40) + (0.2x2.60) +(0.2x19.70)ACD (0.5x4.40) + (0.3x19.70) +(0.2x12.10)EDC (0.6x 6.10) +(0.2x12.10) + (0.2x19.70)ABC (0.6x10.3) + (0.2x-9.40) + (0.2x14.70)ACD (0.5x10.3) +(0.3x14.70) + (0.2x5.40)EDC (0.6x5.2) + (0.2x5.4) + (0.2x14.70)ABC (0.6x-8.10) + (0.2x-26.90) + (0.2x11)ACD (0.5x-8.10) + (0.3x11) + (0.2x8.80)EDC (0.6x4.8) + (0.2x8.8) + (0.2x11)ABC (0.6x15.90) +(0.2x0.0)+ (0.2x8.80) ACD (0.5x15.90) +(0.3x8.8) +(0.2x3.1)EDC (0.6x4.9) +(0.2x3.1) + (0.2x 8.8)ABC (0.6x27.60)+ (0.2x10.8) + (0.2x32.0)ACD (0.5X27.60) +(0.3X32) + (0.2X7.0)EDC (0.6X5.6)+(0.2X7.00) +(0.2X32)ABC (0.6X24.70 ) + (0.2X10.8) + (0.2X12.50)ACD (0.5X21.10) + (0.3X12.50) + (0.2X7.00)EDC (0.6X5.70) + (0.2X5.8) + (0.2X12.50)ABC (0.6X24.70)+(0.2X12.30)+(0.2X34.0)ACD (0.5X24.70) +(0.3X34) +(0.2X3.2)EDC (0.6X6.0) + (0.23.2) +(0.2X34)ABC (0.6X18)+(0.2-1.7)+(0.2X-8.9)ACD (0.5X18) + (0.3X-8.9) + (0.2X4.0)EDC (0.6X6.4) + (0.2X4) + (0.2X-8.9)ABC (0.6X-40.4)+(0.2X-24.9) +(0.2X-55.3)ACD (0.5X-40.4)+(0.3X-55.3)+(0.2X16.5)EDC (0.6X6.7)+(0.2X16.5) +(0.2X-55.3)ABC (0.6X39.6) +(0.2X0.3) +(0.2X9.6)ACD (0.5X39.. 6) +(0.3X-9.6) +(0.2X-2)EDC (0.6X3.30) +(0.2X9.6) +(0.2X9.6)QUESTION 1BCalculation returnsAssets A: (20.2+14.6+12.2+11.6+16.1+4.4+10.3+-8.1+15.9+27.6+21.1+24.7+18+-40.4+39.6) /15 = 12.50% The risks = square root of 12.50 = 3.53%Returns in B (26.5+6.6+41.7+32.6+17.5+2.6+-9.4+-26.9+0.0+10.8+17.6+12.3+-1.7+-24.9+-0.3) /15 = 7.48%Risks in B square root 7.48% = 2.73%Return in C (12.7+14.5+20.3+17.9+-5.0+19.7+14.7+11.0+8.8+3.1+7.0+5.8+3.2+4.0+16.5+-2.0) /15 = 23% Risks 3.03%Returns from D (22.8+13.012.2+9.5+- 1.2+12.1+5.4+8.8+3.1+7.0+5.8+3.2+4.00+16.5+-2.0) /15 =8.01% risks =2.83%Returns from E (8.0+7.6+5.6+5.1+5.0+6.1+5.2+4.8+4.9+5.6+5.7+6.0+6.4+6.7+3.3) /15 = 6.07%b risks= 2.46%Question 2The superannuation funds in finance are funds which comply with the operational standards of SISA. The tax authorities in the country tax these funds continually and usually it is a policy by the state to carry out such taxation programs (Stevenson 23). In any country a cross the world, any company has to have a financial base in terms of funds; the companies whose funds comply with the SISA standards are taxed 15% while those funds that do no comply with those standards are taxed 30% more. The purpose of the superannuation funds in the economy is to ensure that the funds regulated by the authority or the states provide benefits to the fund owners or investors so that incase of their retirement and occurrence of death are given to the their beneficiaries or them themselves to support them at an old a ge (Stevenson 34). The superannuation funds are provided according to their current tariffs in the taxation authorities thus the taxes differ from one country to another since each country has its own taxation policy that reflects different interest rates to be used in calculation of the superannuation