Blog 4: Finance
Oct 4th, 2010 by Andy Mao
In our last COM 101 class we had a Finance guest speaker, Murray Carlson, to give us a brief understanding of finance. We discussed why Wal-Mart was planning to bid the South African retailer Massmart with such a big risk. We found out that in the long-run Wal-Mart will gain substantial profit from the company if everything goes well. One of their primary purposes of the investment was to transfer their wealth in time.
The two graphs below shows two different types of investments
The column on the left shows how employee will get a stable and safe earning but it will always be constant and there will be no way of buying a big house and a luxurious car.
The column on the left shows how in the long-run the entrepreneur will have the chance of being extremely rich but with a very high risk of losing.
Finally we had two volunteers in class to demonstrate how one could lose everything or gain twice as much by one chance as an entrepreneur. The employee volunteer had many chances to earn more but ended up only gaining very little.
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sources:
https://www.vista.ubc.ca/webct/urw/lc5116011.tp0/cobaltMainFrame.dowebct