Intermediate Financial Management

Question: Discuss about the Intermediate Financial Management? Answer: Article on the potential topics As the episode was related to real estate so this financial market is currently, showing a downtrend as there is fall of prices. Financial market is a lucrative market and it helps in mobilization of savings and channelizing it so that it can further be useful for productive purposes (Brigham Ehrhardt, 2013). Financial markets helps people to guide them to save more so that they can efficiently invest in smarter manner. Financial instruments like, mutual funds, SIP, equity, etc is made available to the people so that they can invest in order to get higher returns in future. The financial market changes in every seconds and investors have to predict according to that. The investors in the process of buying and selling of securities need information. Investors invest a lot of time as well as money in getting the information on securities. The investors should follow ethical practices in order to guide their client in correct direction so that the investment can be utilized in an effec tive manner (Brooks Mukherjee, 2013). Financial market helps the investors to guide them with proper pricing strategy. It is the only market where we can find the buyers as well as sellers available all the time. It helps in providing liquidity to the securities in an extent manner (Kramer, 2012). The investors can easily invest their money at any time that is convenient for them in securities by way of financial markets. Investment can easily be converted into money as per their requirements. A safer banking system helps the people to feel free to invest their money because the advisor sometimes misguides them as well. Training session should be conducted where information related to financial markets are given that will help the common people to understand the importance of saving their money for future purpose Federal Reserve is still relevant in the country as it is the central bank situated in United States. This system was initiated by Congress to provide the country with flexible, safer and most importantly stable monetary as well as financial system (Brigham Houston, 2011). It helps to conduct the monetary policy of nation to influence money as well as credit conditions in the entire economy. Addition to that, it establishes full employment and encourages stability of prices. This system maintains the financial system in order to conduct systematic risk that will arise in financial markets. The system helps in providing a safety banking as well as financial system that will protect the credit rights of the consumers. It is known that the prices of goods as well as services depend completely on the forces of demand and supply (McKinney, 2015). The investors, on the other hand, predict the prices of the securities. . The financial advisor gets a large chunk of money from client in orde r to provide them with wise decisions to improve in the investment decisions. Systematic Investment Plan is a recent way of investing money and is one of the financial instruments whereby people can invest their money in regular interval of period and get higher returns in the future. There is mostly conflict present between the shareholders and managers at the time of attempting for benefits. Managers often look at their own benefits and deal the matters solely in various transactions (Chandra, 2011). Even, managers take decisions on purchasing other companies or investing in projects and these clashes with the shareholders because they do not take prior consent. They even engage in fraud practices by manipulating with figures that will optimize bonus as will get stock price benefits. On the contrary, shareholders hold legal stock of a company so these people also possess rights to sell these shares according to their requirements. The managers have the right to take decisions that will help them to act in the interest of shareholders (Michalski, 2012). The market hypothesis of the real investment market is true as we can see large number of investors is investing in this sector. Speculative activities take place in this market because it is people start predicting about the future by viewing at the trend lines. Speculators predict the future and according to that buy or sell of shares in the market (Moyer et al. 2011). The shareholders have their shares in the organization and they have full right to buy or sell it according to their need and the current market scenario. The investment advisor according to that makes stock market changes every second of time and decisions. Appointing an experienced financial advisor will help people to invest their money in a wiser manner. Client is not aware of the market and they trust the advisor to get better investment plan. However, the financial advisor takes advantage and misuses their money as well as misguides them (Herman, 2011). It may happen that the financial advisor will ask their cl ient to invest when the shares are falling so that they can buy in the near future. However, as result there is further fall in the shares that makes the client money was wasted. At the end of the study, I would recommend that people should be aware of financial market so that they can wisely invest in the market. As the case dealt with real estate investor, he misguided many people in terms of money and used their money for their personal purpose. This video gave us a true understanding of how the investors cheat in terms of money. Therefore, it is wise to have a domain knowledge of this market and then try to invest otherwise others can take advantage of the money spent by the innocent people. Personal reaction on the video I have watched a recent episode of American Greed that was telecasted on 26th of June 2015. The season showed profile of Edward Okun who was a real estate investor. He was convicted on stealing the money of client and using it for its own personal expenses. Edward Okun related the entire episode to real investment and the fraud case. Edward Okun is a Miami businessperson who was convicted on stealing clients money from his tax deferral firm (Dimmock, 2013). For the activity performed by him, he was sentenced to prison for 100 years as because he performed fraud case of $126 million. Edward Okun was indulged in many cases that includes guilty of conspiracy, money laundering and smuggling case. As the case was related to cheating the people on money terms, so it avoided by making the people aware of the financial market. This study deals with the episode of American Greed that displayed a real estate investor named as Edward Okun. He was convicted of using client money for its own pers onal purposes. He was sentenced to jail by the high court for the malpractices performed by him. He even cheated his wife and was accused by her. This study also gives a brief description of real estate market and how it works in the financial market. If the investor can guide their client in right direction, then money laundering case will be solved (Oikonomou et al. 2011). It is important that the client should have information on financial markets so that they can take decisions on their own and their money can be easily utilized in a proper manner. As the convict was using the money lavishly for its own purposes, people should view the episodes and find ways to stop these cheating issues. A prosecutor accused him that he did not hold the money of client in bank; rather spend that money in buying jewellery for his new wife (Sheffet et al. 2014). He owned multi dollar homes, helicopter and jet but the entire money belonged to a tax group of customer. He further expand its company in the year 2006 in order to buy competitors to gain access to their customers sale deposits as far as real estate was concerned. The company further filed case for bankruptcy in the year 2007 (Brigham Daves, 2012). Okun did not listen to its several lawyers who argued that he is wasting the customer deposits in order to clear up its own personal expenses as well as investing in real estate. The fraud was done to the 1031 Tax group of customers. Okun efficiently used clients accounts in order to buy more of 1031 companies so as to keep the schemes runni ng and he can continue with his lavish spending. The client should follow the IRS requirements and should not invest their hard-earned money with Okun because they were putting themselves at risk doing that. Clients trusted Okun and give their money but in return he actually stolen their money for his personal benefits. Okun did not only steal the money from its clients, rather he stole from his father in law and the sum of rupees was $150000. As he was into improper dealing with business, his sister as well as paternal uncle sued him. The case on Edward Okun has made us understand that we should not trust this people blindly rather should involve in understanding the data of financial market. Investors can only help the customers in providing with the information by conducting several training on investment schemes to aware the common people. Mostly, due to lack of information, people do not even study the documents before putting their signature (Lins et al. 2011). They build a complete trust on the investor and they take advantage of that trust. It is easy to misguide people by indulging into unfair practices but that will not gain them to achieve success in long run. Ethics is something that will help the real investment sector to rise in the future. I would recommend that this episode helped us a lot to have a better understanding on the fraud practices that is prevailing in the market. Strict punishment and sentenced of jail is recommended for Edward Okun so that no other person should make it a regular pract ice. Playing with the sentiments of common people is a crime because they invest their hard-earned money into business. Clients should be given proper advice rather being indulged into fraudulent practices by the financial advisor. Mutual funds help the customer to invest small amount in regular interval of time but they will get high interest in the near future. Reference List Brigham, E., Daves, P. (2012).Intermediate Financial Management. Cengage Learning. Brigham, E., Ehrhardt, M. (2013).Financial management: theory practice. Cengage Learning. Brigham, E., Houston, J. (2011).Fundamentals of financial management. Cengage Learning. Brooks, R., Mukherjee, A. K. (2013).Financial management: core concepts. Pearson. Chandra, P. (2011).Financial management. Tata McGraw-Hill Education. Dimmock, C. (2013).School-based management and school effectiveness. Routledge. Herman, R. D. (2011).The Jossey-Bass handbook of nonprofit leadership and management. John Wiley Sons. Kramer, M. M. (2012). Financial advice and individual investor portfolio performance.Financial Management,41(2), 395-428. Lins, K. V., Servaes, H., Tamayo, A. (2011). Does fair value reporting affect risk management? International survey evidence.Financial management,40(3), 525-551. McKinney, J. B. (2015).Effective financial management in public and nonprofit agencies. ABC-CLIO. Michalski, G. (2012). Accounts receivable management in nonprofit organizations.Zeszyty Teoretyczne Rachunkowoņºci, (68), 83-96. Moyer, R. C., McGuigan, J., Rao, R., Kretlow, W. (2011).Contemporary financial management. Cengage Learning. Oikonomou, I., Brooks, C., Pavelin, S. (2012). The impact of corporate social performance on financial risk and utility: A longitudinal analysis.Financial Management,41(2), 483-515. Sheffet, A. J., Flaxman, L., Tom, M., Hughes, S. E., Longbottom, M. E., Howard, V. J., ... Brott, T. G. (2014). Financial management of a large multisite randomized clinical trial.International Journal of Stroke,9(6), 811-813.