1. Discuss the 2007-2008 financial crisis and what impact it had on the financial markets. Who was impacted? What caused the crisis, and how can a future crisis be prevented? Explain 2. Your boss has asked you to put together an informal outline/presentation on the risk-return tradeoff. In your own words, discuss the tradeoff. Does a risky investment always equal a big payoff and vice versa? What does it mean to be a risk-averse versus a risk-taker? What types of information must be considered when it comes to risk and return? Explain. 3. What is finance? Briefly discuss how the study of finance is essential to business today. There are other areas of business, such as marketing, human resources, and management. How does finance impact them? In other words, can a business efficiently run without everyone having some knowledge of the field? Explain. 4.Assume you are starting a new business such as a restaurant, barber shop, or spa, for example, and discuss the types of information you would access and research to get the business started. For instance, would you look at the local Small Business Administration’s website for guidance on how to fund and setup a new firm? What financial tools would be useful, and how would they assist you in the startup process? Explain. Each question must have a 200 word response

1. Discuss the 2007-2008 financial crisis and what impact it had on the financial markets. Who was impacted? What caused the crisis, and how can a future crisis be prevented? Explain

2. Your boss has asked you to put together an informal outline/presentation on the risk-return tradeoff. In your own words, discuss the tradeoff. Does a risky investment always equal a big payoff and vice versa? What does it mean to be a risk-averse versus a risk-taker? What types of information must be considered when it comes to risk and return? Explain.

3. What is finance? Briefly discuss how the study of finance is essential to business today. There are other areas of business, such as marketing, human resources, and management. How does finance impact them? In other words, can a business efficiently run without everyone having some knowledge of the field? Explain.

4.Assume you are starting a new business such as a restaurant, barber shop, or spa, for example, and discuss the types of information you would access and research to get the business started. For instance, would you look at the local Small Business Administration’s website for guidance on how to fund and setup a new firm? What financial tools would be useful, and how would they assist you in the startup process? Explain.

Each question must have a 200 word response

Solution:

1. The 2007-2008 financial crisis was a severe global economic downturn that began with the collapse of the US housing market. Subprime mortgages, which were given to borrowers with poor credit, were packaged into securities and sold to investors. When the housing market began to decline, many of these borrowers defaulted on their loans, causing the value of the securities to drop. This, in turn, led to a wave of bank failures and a severe credit crunch. The crisis had a significant impact on the financial markets, leading to a sharp decline in stock prices, and many investors lost large sums of money. The crisis also had a significant impact on the real economy, causing a sharp increase in unemployment and a deep recession. To prevent a future crisis, stricter regulations on banks and other financial institutions have been put in place, and more oversight has been introduced to help identify and mitigate risks.

2. The risk-return tradeoff is a fundamental concept in finance that states that the potential return on an investment increases as the level of risk increases. This means that the higher the potential return on an investment, the higher the risk of losing money. A risky investment does not always equal a big payoff, and a low-risk investment does not always equal a small payoff. The risk-return tradeoff also applies to different types of investors. Risk-averse investors are those who are willing to accept lower returns in exchange for lower risk, while risk-takers are willing to accept higher risk in exchange for higher returns. When it comes to risk and return, investors must consider a variety of factors, such as the type of investment, the expected return, the level of risk, and the investor’s own risk tolerance.

3. Finance is the study of how individuals and organizations manage their money. It is essential to business today because it deals with the acquisition, management, and use of funds. The study of finance covers a wide range of topics, including financial markets, investments, and corporate finance. Finance is closely related to other areas of business, such as marketing, human resources, and management. Marketing deals with how to generate revenue, while human resources deals with how to attract and retain employees. Management deals with how to organize and run a business. All these areas of business are closely related to finance, and all require some level of knowledge of finance to be run efficiently.

4. When starting a new business such as a restaurant, barber shop, or spa, you would need to access and research a variety of types of information. The first step would be to conduct a thorough market analysis. This would include researching the local economy, the competition, and the target market. Next, you would need to create a detailed business plan. This would include a financial plan, which would detail the startup costs, projected revenues, and projected profits. You would also need to research funding options, such as loans or grants from the Small Business Administration. Financial tools such as cash flow projections, break-even analysis, and budgeting would be useful in the startup process. These tools would help you to understand the financial aspects of your business and make informed decisions.