What is the significance of finance management in day to
day life?
Answers were Sorted based on User's Feedback
Answer / j.s.vinuram
Finance is the life blood in all the business activities
and it is needed to run the business perpertually.
The term finance means funding money, investment, getting
credit.
Is This Answer Correct ? | 11 Yes | 1 No |
Answer / sonali
Finance management in day to day life means managing the
cash, money and the wealth. since we need money to buy
neccessity things like food items as welll as we need money
to by car, house, gold to lead a luxurious life.
For all these things we are required to manage the finance.
So that we can increase our wealth (by doing business,
working for salary, investment)and by curtailing the
unneccessary expense.
Is This Answer Correct ? | 8 Yes | 1 No |
Answer / shiva
The term finance means Rising and spending money for
business.
Is This Answer Correct ? | 3 Yes | 0 No |
Answer / ramakrishna
Finace plays a vital role in day to day of individuals.One
need to allocate one's resourses to see that the
optimaisation is achieved.In case of lack of funds you got
to raisse funds through various means.In such a way finance
management is important in day to day life.
Is This Answer Correct ? | 3 Yes | 0 No |
Answer / atul tiwari
Finance Management is the playing with our asset &
liabilities in such a way so as to gain maximum profit.
Is This Answer Correct ? | 6 Yes | 5 No |
Answer / bhavana
finance is the basic amenity of life.finance directly refers to money,money governs every activity v practise,earning,investing,using,managing,money is managementis itz day to day application it starts frm buyinga pencil to using money for capital investment
Is This Answer Correct ? | 1 Yes | 0 No |
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Sean Alicandri, a sophisticated investor who is both willing and able to take risk, has just noticed that Mid- West Airlines has become the target of a hostile takeover. Prior to the announcement of the offer to purchase the stock for $72 a share, the stock had been selling for $59. Immediately after the offer, the offer the stock rose to $75, a premium over the offer price. Such premiums are often indicative that investors expect a higher price could occur if a bidding was erupts for the company or if management buyout of the firm. Of course, if neither of these scenarios occurs, the price of the stock could fall back to the $72 offer price. In addition, if the offer were to be withdrawn or defeated by management, the price of the stock could fall below the original stock price. Alicandri has no reason to anticipate that any of these possibilities will be the final outcome, but the realizes that the price of the stock will not remain at $75. If a bidding war erupts, the price could easily exceed$100. Conversely, if the takeover fails, he expects the price to decline below $55 a share, since he previously believed that the price of the stock was overvalued at $59. With such uncertainty, Alicandri does not want to own the stock but is intrigued with the possibility of earning a profit from a price movement that he is certain must occur. Currently there are several three months put and all options traded on the stock. Their strike and market prices are as follows: Strike Price Market Price of Call Market Price of Put $50 $26.00 $0.125 55 21.50 0.50 60 17.00 1.00 65 13.25 1.75 70 8.00 3.50 75 4.25 6.00 80 1.00 9.75 Alicandri decides the best strategy is to purchase both a put and a call option (to establish a straddle). Deciding on a strategy is one thing; determining the best way to execute it is quite another. For example, he could buy the options with the extreme strike price (i.e. the call at $80 and the put at $50). Or he could buy the options with the strike price closest to the original $72 offer price (i.e. buy the put and the call at $70). To help determine the potential profits and losses from various positions, Alicandri developed profit profiles at various stock prices by filling in the following chart for each position: Price of the stock Intrinsic Value of the Call Profit on the Call Intrinsic Value of the Put Profit on the Put Net Profit $50 55 60 65 70 75 80 85 To limit the number of calculations, he decided to make three comparisons: (1) the purchase of two inexpensive options-buy the call with the $80 strike price and the put with the $60 strike price, (2) the purchase of the options with the $70 strike price, and (3) the purchase of the options with the price closest to the original stock price (i.e., the options with the $60 strike price). Construct Alicandri’s profit profiles and answer the following questions. 1) Which strategy works best if a bidding war erupts? 2) Which strategy works best if the hostile takeover is defeated? 3) Which strategy works best if the original offer price becomes the final price? 4) Which of the three positions produces the worst result and under what condition does it occur? 5) If you were Alipcandri’s financial advisor, which strategy would you advise he establish? Or would you argue that he not speculate on this takeover?
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