1) Research Exercise (Answer in 2-4 pages, including any tables or charts.)

We learned about the US financial regulatory structure, including institutions such as the Fed, SEC, and FINRA, as well as policies such as Dodd-Frank. Here your task is to explore the financial regulatory system of another nation and compare it to the US.

You are welcome to copy/paste any material you find as long as you provide a citation — However, anything written must be your own work. Good materials to copy/paste might include tables, charts, and organizational flow charts.

• Choose your country from one of the following: Canada, China, Germany, or Japan.
• Show basic up-to-date economic and demographic data of your country. You can choose whatever data you believe is most important to your nation. [Examples might include GDP, GDP growth rate, GDP per capita, population, population growth rate, size of critical economic sectors (like agriculture, energy, or services), etc.]
• What are the different financial regulatory entities of your country and the roles of those entities? Are they public or private? Who has authority over what? [If you choose to copy/paste a flow chart, be sure to write descriptions of the different entities.]
• What are the important non-regulatory entities, like banks and stock exchanges?
• What are some of your country’s important financial regulations? [Consider legislation such as trade agreements and your country’s equivalent of Dodd-Frank.]
• How is your country’s system different from the US system? Overall, what is your own evaluation of your country’s system?

Then, research your country’s financial governance and financial structure, and answer the following questions:

2) Short Answer (Answer in 1/2 page each.)

A.Describe TWO different methods that large, public US corporations have used to avoid paying taxes. Give a recent real-life example of each. Use citations as needed.

B. What was the role of hedge funds in causing the 2008 financial crisis? (Use citations as needed.)

3) Multiple Choice – Circle all correct answer choices.

• Which of these would signal a direct move by the Fed to contract (tighten) the money supply?
  • Raising the federal funds rate
  • Raising the bank reserve requirement ratio
  • Buying T-bonds from banks
  • Raising the rate of currency drain
  • Printing $50B in currency
• You are an equity analyst – you pick stocks — and trading on the NYSE has just opened for the day. You notice that shares of one of your holdings, AAPL, just rose sharply by 10% while the rest of the market stayed flat. You also notice that, moments before, AAPL submitted an SEC filing just before share prices soared. Which of these could that filing be?
  • Annual report
  • 20-F
  • 8-K
  • Form 3
  • Rumors of a merger with Samsung
• Many analysis blame regulators and exchanges themselves for contributing to the phenomenon of High Frequency Trading. Which of these might analysts point to as evidence of this?
  • Co-location
  • FINRA Rule 3310
  • Efforts to tighten the money supply
  • Regulation NMS
  • The Federal Funds Rate
• Which of the following indicate scenarios of good corporate governance?
  • A poison pill
  • Most board members also share management duties
  • Executive compensation is tied to the number of projects completed
  • Life-terms for CEOs
  • Shareholders require the approval of corporate managers to issue a vote
• The money market could include:
  • 100 shares of GOOG stock
  • Commercial paper
  • T-bills
  • 5-year sugar commodities
  • Over-the-counter trades