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3 pages/β‰ˆ825 words
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APA
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Accounting, Finance, SPSS
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English (U.S.)
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Topic:

Potential Macroeconomic Influence on FinTech Company Affirm

Essay Instructions:

The final project for this course is the creation of a market analysis report that analyzes various organized global and domestic exchange markets and compares and contrasts performance for different investment products. In this milestone, you will submit a draft of the Macroeconomic Environment (Section II) of the final project. You will focus on external factors that can cause markets to move as well as how and why those factors influence performance. External factors can include economic environments, social and political factors, and interest rates and inflation. You will also include an analysis of different investment vehicles (stocks, bonds, mutual funds, etc.) in different economic climates, which were discussed in Module Two.

This information will be used later in the final report to inform your conclusions about the company’s market selection.

Specifically, the following critical elements must be addressed:

II. Macroeconomic Environment. This section should focus on external factors that can cause markets to move, and how and why those factors influence performance. You will use this information later in the report to inform your conclusions about the company’s market selection. Specifically, you should:

A. Assess how different economic environments, such as boom and bust cycles, affect markets both individually and collectively. In other words, consider how economic growth or scarcity affects individual markets and how the economic environment for one market affects others. Support your answer with examples from different markets and economic periods.

B. Explain how social and political climates can affect market performance, risks, and returns. Use real-world examples from different markets to support your answer.

C. Analyze how interest rates and inflation affect market performance, using real-world examples from different economic periods to support your answer. For example, how do interest rates affect business borrowing, personal investment, and lending?

D. Compare and contrast how different types of financial instruments, such as stocks, bonds, mutual funds, and commodities, respond to different macroeconomic environments, analyzing how that might affect a company’s IPO success.

For example, are investors more likely to purchase shares of a newly listed company in certain contexts more than others? Will the cost of key commodities or services be higher in certain contexts?

Essay Sample Content Preview:

Potential Macroeconomic Influence on a Financial Services Organization: Affirm Company
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Potential Macroeconomic Influence on a Financial Services Organization: Affirm Company

A macro environment is the set of conditions that exist in the economy as a whole rather than within a particular region, sector, or organization. Thus, a macroeconomic environment involves all the external factors that contribute to the success or failure of a business organization. In this environment, factors influence all organizations, including financial service providers like Affirm. There are many factors within this environment, including environmental, political, social, cultural, and economic factors, that can enhance or impede business growth and development. The current paper examines some of these factors and how they will influence Affirm’s operations in the USA and Nasdaq’s stock exchange platform.

Boom and Bust

            Among the critical factors of the macroeconomic environment is the boom-and-bust phenomenon. Boom and bust refer to a situation in which a period of national, regional, or global rapid economic growth abruptly follows an economic decline (Burns, 2014). The financial market grows during the boom period as people have disposable income to invest, buy shares, or seek loans from organizations like Affirm. In this period, there was optimum money circulation in the economy. On the other hand, Busts are the opposite in that populations and organizations face financial difficulties. A key feature of boom and bust is that while it can be caused locally, its impact may be felt in other world regions. For instance, the subprime mortgage crisis of 2008-09 resulted from the collapse of the housing market in the USA (Toarna & Cojanu, 2015). Its effect resulted in the severe contraction of liquidity in the global financial market (Johnstone et al., 2019).

Changes in Social and Political Climate

            Apart from seasonal phenomena like boom and bust, the political and social climates also influence the financial economy. For instance, the ongoing political conflict between Russia, NATO, and Ukraine has resulted in the closure of the Moscow stock exchange following more comprehensive sanctions on Russia. In contrast, the competition has disrupted the stock economy in Ukraine. According to Simeunovic (2016), wars have always caused a boom or bust on the American stock exchange. Another example is the political differences between China and the United States. Chengying, Rui, and Ying (2021) established that the US-China trade war, which began in 2018, has influenced the profitability of China’s domestic enterprises and China’s stock market.

            Socioeconomic factors like employment, educatio...

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