Problem 1

What is a bill of exchange? Explain carefully the requisites for a bill of exchange to be valid. 

Problem 2

You have a close friend, Peter, who is a renowned marine biologist, and he wants to know how to interprete financial statements which are quite unfamiliar to him. Explain to him how to interprete the basic parts of a financial statement namely such as:-

(a) the balance sheet;
(b) the income statement;
(c) the cash flow statement;
(d) the statement of shareholders' equity.

Problem 3

What do you understand by the Risk-Return relationship in the field of finance and what is the importance of this relationship?

Problem 4

What do you understand by the term ‘Dividend Policy'? When are Dividends said to be irrelevant?