Verified Document

Financial Practice Essay

¶ … working on financial practice problems can help students to apply key concepts and principles. Understanding various financial practice problems will help all students to ensure that they have a foundation for knowing how money and the world of finance works. This is important because, it will serve as foundation that will allow everyone to be prepared for: objectively evaluating their business, personal finances and investments. Once this takes place, it means that we can make more prudent financial decision by: avoiding common mistakes. As, these tools will help everyone in: identifying potential frauds and it will give us a sense of reality. This is the point that these ideas will prevent us from making critical errors that could have a dramatic impact upon: our net worth and the kinds of decisions that will have an effect on our future.

A good example of individuals who were never able to learn this lesson are those people who were the clients of Bernie Madoff. Prior to the discovery of this Ponzi scheme...

Evidence of this can be seen by looking no further than the fact that: he served as the chairman of the NASDAQ stock market. What made him so convincing for many affluent investors was that they were often referred to him by: various individuals that they met during a number of social events (i.e. cocktail parties). ("Madoff Used Multiple Compliance Techniques," 2010) ("The Madoff Affair," 2009)
During the 18 years that the fraud was occurring, these affluent investors would show how they were making better returns than the average money manager on Wall Street. This is despite the fact that Madoff only was taking on clients through referrals. At the same time, investors were forbidden from: questioning his activities and various mutual funds could not disclose the fact that he was one of the money managers they were using. ("Madoff Used Multiple Compliance Techniques," 2010) ("The Madoff Affair," 2009)

For most people, this seemed…

Sources used in this document:
Bibliography

Madoff Used Multiple Compliance Techniques. (2010). Dave Manuel. Retrieved from: http://www.davemanuel.com/2010/03/04/bernard-madoff-and-the-power-of-influence/

The Madoff Affair. (2009). PBS. Retrieved from: http://www.pbs.org/wgbh/pages/frontline/madoff/
Cite this Document:
Copy Bibliography Citation

Related Documents

Financial Structure of Financial Environment Financial Structure
Words: 1561 Length: 5 Document Type: Essay

Financial Structure of Financial Environment Financial structure is the mixture of financial instruments, financial markets and other financial institutions operating within the economy. ( Fase & Abma, 2003). Financial structure consists of a company's assets, capital and liabilities. Financial structure is also specific equity and long-term debts that firms employ to finance its business operations. Typically, financial structure of a company generally affects the business operations and value of a business.

Financial Analysis Over the Last
Words: 660 Length: 2 Document Type: Case Study

This is significant, because the increases in these levels are an indication that the management is engaging in responsible financial practices to pay off of their debt obligations. (Finkler, 2010, pp. 558 -- 561) Review the notes. Do any of them raise cause for concern? When reviewing the notes, there is nothing unusual that is causing concern about any kind of sudden shifts in the financial strength of the hospital. (Finkler,

Financial Fraud Fannie Mae Review of Fraud
Words: 1285 Length: 4 Document Type: Case Study

Financial Fraud Fannie Mae Review of Fraud Schemes within Fannie Mae 1998-2004 Scope The agency found the fraud understatements of earnings and illegal gratuities that led to accounting violations and inability to meet Wall Street goals. The investigation of Lee Frakas, executive of a major mortgage company which had dealings with Fannie Mae with hundreds of fake mortgages. The Securities Exchange Commission cited that Fannie Mae had to repay earnings and correct their books

Financial Analysis and Management at
Words: 3019 Length: 10 Document Type: Thesis

Had the organization employed the techniques of activity-based costing, they would have realized the need to change their approach and had started manufacturing small size and fuel efficient engines, as most of the customers were requiring these items. "If Ford [...] had used activity-based costing, they would have realized early on the utter futility of their competitive blitzes of the past few years, which offered new-car buyers spectacular discounts

Financial Regulations
Words: 908 Length: 3 Document Type: Essay

Dodd-Frank and Sarbanes-Oxley Acts are important legislations in the corporate world because of their link to public and privately held companies. Sarbanes-Oxley Act was enacted to enhance transparency and accountability in publicly traded companies. On the contrary, Dodd-Frank Act was enacted to disentangle the confused web of financial service company valuations. Actually, these valuations are usually hidden by complex and unclear financial instruments. The introduction of Sarbanes-Oxley Act was fueled

Financial Markets and Human Overconfidence
Words: 4014 Length: 13 Document Type: Essay

QUESTION 1.Overconfidence (excessive optimism) is very commonly observed in human beings. Overconfidence leads to which types of irrational behavior in financial markets? Please list 3 and explain in detail.i. Over-precisionThe third form of irrational behavior is over-precision, being too confident you know the verity and truths. For instance, Trump shows over-precision when he claims surety concerning opinions not in line with reality. He claimed that Arab Americans in their thousands

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now