The Great Plebeian College

Don P. Reinoso Street Población

Alaminos City, Pangasinan
2nd Semester A.Y 2021-2022

AE 18 FINANCIAL MARKETS
Subject

ANGELICA MAE G. SUAREZ

Name

BSA - II
Course
1. What distinguishes investment management from financial management?

Investment management involves a portfolio of assets, financial management involves the

operations of a business. Investment management is about management of financial assets and
other investments of an individual or an institution. It is more than just managing the assets in a
client's portfolio; it also ensures that the portfolio remains aligned with the client's objectives.
While financial management is an important part of any organization's financial management
strategy. It has to do with a business's operations. Some of the tasks that a financial manager
performs are financial planning, organizing, directing, and regulating organizational funds. As a
financial manager your primary focus is to ensure that the business will be profitable to run for
the operation of business.

2. What is the role of a discount rate in decision-making?

In a discounted cash flow analysis, the discount rate is the rate of interest used to calculate the
present value of future cash flows. This can be used to see if the future cash flows from a project
or investment are worth more than the capital required to fund the project.

3. What is the responsibility of the investment manager with respect to the investment
portfolio?

An investment manager is a person or company that manages a client's securities portfolios

according to the client's investment objectives and parameters. From day-to-day buying and
selling of securities to portfolio monitoring, transaction settlement, performance measurement,
and regulatory and client reporting, an investment manager may handle all activities related to
the management of client portfolios.

4. Distinguish between capital budgeting and capital structure.

Capital budgeting is concerned with the long-term fixed asset and working capital management
decisions that must be made. It is simply the process of deciding which capital projects to pursue
and which to reject. While the capital structure is linked to financing decisions involving debt
and equity combinations, in which the debt-to-equity ratio must be maintained. It refers to the
type of money used to fund it as well as the source of that money. The return a company earns
for its shareholders can be influenced by its capital structure.
5. What are current assets?

Current asset defined as the ability of a company to convert all of its assets into cash within a
year. If a company has cash, short-term investments, and cash equivalents, it can generate higher
returns simply by utilizing these assets. Because they can be converted into cash in a short period
of time, these resources are commonly referred to as liquid assets.