Category Archives: B-School

HBCU Money™ B-School: 14 Little Known Facts About The Federal Reserve


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Just 14 things that you may or may not know about the Federal Reserve Bank that were shared by FederalReserveEducation.org’s outreach to teach citizens more and more about how and what the Federal Reserve role actually is in their day to day lives. Our Editor-In-Chief William A. Foster, IV got 10 out of 15 correct on their quiz. Looks like he may need to go back to business school and take a few refresher courses.

  1. The profit (revenues in excess of costs) of the Federal Reserve is given to the U.S. Treasury.
  2. Managing the federal deficit is NOT a function of the Federal Reserve.
  3. The Board of Governors, the governing body of the Federal Reserve System, is set up to consist of 7 members.
  4. Congress is the organization that established the Federal Reserve System.
  5. 38 percent of commercial banks in the U.S. are members of the Federal Reserve System.
  6. 12 districts make up the Federal Reserve System.
  7. The San Francisco Federal Reserve district serves the largest number of states.
  8. Member banks are NOT required to hold stock in Reserve Banks.
  9. Federal Reserve head offices each have a 9 member board of directors. 
  10. Federal Reserve Bank employees are NOT considered to be government employees.
  11. State Advisory Council is NOT an advisory council to the Federal Reserve Board of Governors.
  12. Each Federal Reserve District president reports to the board of directors. 
  13. The Federal Reserve is the 3rd attempt at our nation’s central bank.
  14. The Federal Reserve’s primary source of income is interest on government securities. 

HBCU Money™ B-School: Types of Brokerage Accounts


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By Investor.gov & Securities Exchange Commission

A cash account is a type of brokerage account in which the investor must pay the full amount for securities purchased. In a cash account, you are not allowed to borrow funds from your broker to pay for transactions in the account.

A margin account is a type of brokerage account in which your brokerage firm can lend you money to buy securities, with the securities in your portfolio serving as collateral for the loan. As with any other loan, you will incur interest costs when you buy securities on margin.

There are risks involved in purchasing securities on margin. For example, if you buy on margin and the value of your securities declines, your brokerage firm can require you to deposit cash or securities to your account immediately. It can also sell any of the securities in your account to cover any shortfall, without informing you in advance. The brokerage firm decides which of your securities to sell. Even if the brokerage firm notifies you that you have a certain number of days to cover the shortfall, it still may sell your securities before then. A brokerage firm may at any time change the threshold at which customers are subject to a margin call.

HBCU Money™ B-School: Investing Across Borders Interesting Facts


By World Bank Group

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Investing Across Sectors

  • More than a quarter of the 87 countries surveyed by Investing Across Borders (IAB) have few or no sector-specific restrictions on foreign ownership of companies.
  • Smaller countries have fewer restrictions on foreign ownership of companies, while larger countries — such as China, Mexico, the Philippines, and Thailand — are among those with the most.
  • Countries in Eastern Europe and Central Asia and Latin America and the Caribbean tend to be the most open to foreign ownership of companies.
  • Though services account for a growing share of global foreign direct investment (FDI), foreign ownership of companies is more restricted in the service sector than in the primary and manufacturing sectors.
  • Worldwide, restrictions on foreign ownership are strictest in media, transportation, electricity, and telecommunications industries.
  • Most countries allow foreign ownership of equity in alternative energy companies — with some countries in Middle East and North Africa being notable exceptions.

Starting a Foreign Business

  • In most countries measured by Investing Across Borders (IAB), starting a foreign company takes longer and requires more steps than starting a domestic company.
  • The most common additional procedure required of foreign companies is the foreign investment approval or declaration, required in 48% of the 87 surveyed countries.
  • In Eastern Europe and Central Asia, the additional procedures required of foreign businesses add only 4 days on average to the total start-up time.
  • Georgia and Rwanda have the fastest process for starting a foreign business of all measured countries.
  • Only 3 of the 87 surveyed countries do not have their commercial laws and regulations publicly available online.
  • Companies are able to download business registration forms in 59% of all measured countries, but only 18% of them offer electronic registration services.
  • Four out of the 87 surveyed countries do not allow foreign companies to hold foreign currency bank accounts.
  • Haiti is the only IAB country where the minimum capital requirements are more favorable for foreign than domestic companies.

Accessing Industrial Land

  • In 1 in 4 of the countries surveyed by Investing Across Borders (IAB), foreign companies cannot own private land.
  • All the countries surveyed allow foreign-owned companies to lease land.
  • More than half the countries surveyed do not allow foreign companies to use land leases as collateral.
  • It takes as little as 10 days to lease private land in Armenia — and as many as 149 days in Nicaragua.
  • Across the 87 IAB countries the average time it takes to lease land from the government is more than twice that required to lease land from a private holder.
  • Nearly two-thirds of countries require an additional approval to authorize the lease of government-held land to foreign companies.
  • In only one-third of countries with both a land registry and cadastre are the two public agencies linked to share data, facilitating information access.
  • Less than half the countries do not provide accessible public documentation on previous environmental impact assessments conducted on industrial lands.

Arbitrating Commercial Disputes

  • All Investing Across Borders (IAB) countries recognize arbitration as a tool for resolving commercial disputes, and only 8 of the 87 countries do not have a specific arbitration law: Albania, Argentina, Bosnia and Herzegovina, Ethiopia, Liberia, Mali, Montenegro, and Poland.1
  • About half of IAB countries have laws that distinguish between domestic and international arbitration.
  • The Czech Republic and Mexico are among 17 IAB countries where businesses can conduct arbitration proceedings online.
  • In most countries in Latin America and the Caribbean, foreign lawyers without local bar membership are not permitted to represent parties in arbitration proceedings.
  • There are no functional arbitration institutions in Cambodia and Sierra Leone, while Colombia and Malaysia have many active institutions.
  • In most countries in East Asia and the Pacific, laws do not require courts to assist during arbitration proceedings with orders for production of evidence or appearance of witnesses. In contrast, 4 of the 5 IAB countries in South Asia legally require domestic courts to assist in arbitrations.
  • Many countries in Eastern Europe and Central Asia have adopted special rules to ensure fast enforcement proceedings of arbitration awards, such as establishing special authorities outside the judiciary to issue writs of execution.

http://iab.worldbank.org/Data/Interesting%20Facts

1.Source: Investing Across Borders 2010.

HBCU Money™ B-School: Lockup Agreements


By U.S. Securities & Exchange Commission

Lockup agreements prohibit company insiders—including employees, their friends and family, and venture capitalists—from selling their shares for a set period of time. In other words, the shares are “locked up.” Before a company goes public, the company and its underwriter typically enter into a lockup agreement to ensure that shares owned by these insiders don’t enter the public market too soon after the offering.

The terms of lockup agreements may vary, but most prevent insiders from selling their shares for 180 days. Lockups also may limit the number of shares that can be sold over a designated period of time. U.S. securities laws require a company using a lockup to disclose the terms in its registration documents, including its prospectus. Some states require lockup agreements under their “blue sky” laws.

If you are considering investing in a company that has recently conducted an initial public offering, you should determine whether the company has a lockup and when it expires. This is important information because a company’s stock price may drop in anticipation that locked up shares will be sold into the market when the lockup ends.

To find out whether a company has a lockup agreement, contact the company’s shareholder relations department to ask for its prospectus or obtain it online through the SEC’s EDGAR database. There are also free commercial websites that track when companies’ lockup agreements expire. The SEC does not endorse these websites and makes no representation about any of the information or services contained on these websites.

HBCU Money™ B-School: Johannesburg Stock Exchange Presents The Stock Market For Beginners


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Johannesburg Stock Exchange provides online education for those who want to get a fundamental education needed to engage in the stock market. This presentation gives a basic overview of terms and other explanations that the beginning swimmer should have before jumping in the proverbial ocean of investing. For all of JSE’s online courses please visit http://www.jse.co.za or check back in with HBCU Money as we will continue to post links to them. Click on the picture above to launch the presentation.