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Analysis of Current Events For Financial Decision Maker

See attached files.

This assignment will reflect concepts learned throughout the past ten weeks.

Select three current events discussed during the course. (Please check the attachment for the three current events articles).

Then, select three separate concepts / tools to analyze the current events in such a way that each concept or analysis will allow a financial decision maker to make an informed decision.

Concepts can range from risk and return, capital structure considerations, ratio analysis, financial statement, valuation, growth strategies, etc.

The response is that the three different current events each analyzed using a separate concept. (One current even, for one concept).

The response will be submitted using APA format and must include properly cited and valid academic references in the body of the paper.

Here are the three current events articles link, please choose one article for one concept, and respond for each of them. Here are the concepts to choose from; Concepts can range from risk and return, capital structure considerations, ratio analysis, financial statement, valuation, growth strategies, etc.

1). current events articles # 1

Why We Keep Falling for Financial Scams

2). current events articles # 2

Short and Long-Run Fiscal Challenges

3). current events articles # 3

How Hydrogen Can Save America


Solution Preview

Why We Keep Falling for Financial Scams

Concept: Valuation
Scams and frauds have been the real spoiler of the bullish market conditions. There are many financial scams that have ruined the net worth of investors. As these scams are very difficult to catch at there initial stage but once it is found leads to the market crash. Scams have a big impact on the market value of the investment. If we take the stock market we can find that the market capitalization (Market Value) of stock crashes once the scam gets exposed. Investors loose million of dollars in there investment and some loose all of his/her hard earn money (Greenspan, 2009).

If an investor has invested $100,000 in Microsoft and the market capitalization of the Microsoft is $207.81 billion. Suppose any scam like Enron have been identified in the market, the stock market crashes and the market capitalization of companies fall down. This fiasco will also affect Microsoft and the share price of the company will crash reducing its market value to the lowest level. Suppose the market capitalization of Microsoft has fallen down by 25% due to the crash. Now this will reduce the invested amount of the investor by 25% if he/she purchased the Microsoft stock in cash market, and hence the total worth of the investment will come down to $75,000. This happens if the investor is playing in the cash market but if he/she has invested in the future and option the loss will be more destructive depending on the investment position of the investor. Some times investor loose 100% of there invested amount and get bankrupt (Damodaran, 2003).

As discussed in the article there are many forms of scam and all of them lead to a huge loss to the investor. So its ...

Solution Summary

The solution examines the tools to analyze current events.