FINANCE
1. Explain the history of money
Nowadays, we use both coins and money paper, but back in the past people
used things such as shark teeth, seashells, and bird feathers… to exchange
goods.
Bird’s feather is the lightest type of money that ever existed while rock is the
heaviest one.
Many years later, humans started using mental money. They used gold, silver,
or iron to make coins, and the value of each coin was determined by the humans
and animals on it.
These coins had little value; therefore, to buy goods people had to use a large
amount of them. It was so inconvenient that the government started printing
paper money, which was used to receive coins from banks. This is the first sign
of the use of paper money.
2. What can be the future of money
Digital money or currency will be more and more popular
Nowadays, people prefer online banking to paying cash because of its
convenience, time-saving and fast speed. This phenomenon started becoming
popular when COVID-19 happened. Dwellers could not go out to buy things so
all they could do was stay in their house and purchase goods via E-commerce
platforms, which led to online shopping habits. The more people shop online,
the more digital money is used, and now even when people buy things in
physical stores, they tend to transfer digital money into the sellers’ bank
accounts instead of paying cash.
Besides, there is a well-known digital currency that many businessmen use,
called Bitcoin. Bitcoin is a cryptocurrency, which is designed to act as money
and a form of payment outside the control of anyone, removing the need for a
third party.
A cashless society
The growth of online banking with digital money has been replacing paper
money gradually, and it is predicted that there will be no more cash used in the
future. Moreover, environmental issues are gaining a lot of attention these days.
If humans no longer use paper money, producing it will be unnecessary, so not
only costs but also natural resources will be saved.
3. What is the time value of money
Financial principle
The value of money today is worth more than the value of money in the future
Investment instead of keeping your money → Profit
4. Explain how banks make money
Different ways
Interest Income: Banks = lenders:
Borrow money from depositors → Compensate with a certain interest rate
Deposit funds to borrowers → Repay funds with a higher interest rate
Profit from the interest rate spread, which is the difference between interest paid
and interest received
Capital markets: Provide capital market services for corporations and investors:
Sales and Trading; Underwriting; Mergers & Acquisitions
Fee-based income: a depositor opens a bank account, the bank may charge
monthly account fees for keeping the account open
5. Why can’t we print more money?
+ To understand and answer this question in an easy-to-understand way.
Imagine that a family has 10 tons of rice and 10 children. The father and
mother wanted to give each child a ton of rice, but instead of distributing
rice, they printed out 10 tickets and gave one to each child. It is easy to
see that the tickets here can be considered as money, and the value of
each ticket is equivalent to 1 ton of rice. So if parents now print 90 more
tickets and distribute them to their children, will they be richer not
because the amount of rice remains unchanged is still only 10 tons?
Printing more tickets only makes rice prices higher than before, not
making them richer, this is inflation, the phenomenon in which the
currency depreciates.
+ in nhiều tiền làm tăng khoảng cách giàu nghèo: người giàu có nhiều tài
sản, người nghèo sở hữu ít tài sản =>
Wealth disparity due to money accumulation is evident in three key areas.
First, the wealthy own assets like real estate and stocks that generate passive
income, while the poor often lack financial resources, hindering their wealth
accumulation. Second, the rich accumulate wealth more quickly, creating a
cycle of increasing affluence for them and persistent poverty for the poor,
worsening social inequality. Finally, this disparity affects access to education
and healthcare; the wealthy can invest in quality education, while the poor
struggle to access essential services, perpetuating their disadvantage.(widen
the wealth gap)
6. What’s inflation? What are its consequences? Relation between
inflation and interest rates
Inflation= a general, continuous increase in prices
When the general price level rises, each unit of currency buys fewer goods and
services; consequently, inflation corresponds to a reduction in the purchasing
power of money
Consequences:
Positive: If inflation is under control, it will encourage consumption, lending,
and investment and reduce unemployment in society.
Negative:
Inflation → More money to afford goods → Unable to buy → Borrow
money from banks…→ A lot of borrowers → Banks increase interest rates →
Businesses used the borrowed funds but profits gain < money borrow →
Financial crisis
The decline of the national economy
The growth of unemployed
The rich accumulate their possessions, while the poor don’t have enough money
to pay for basic needs
Interest rate is the interest percent that a bank or other financial company
charges you when you borrow money, or the interest percent it pays you when
you keep money in an account
Relation between inflation and interest rate:
Interaction
Inflation increase, interest rates grow: money loses its value
7. Explain stock. How does it work
Stock: A stock is a share of a company's assets and earnings as well as a share
in the ownership of the business. As a result, investors own a part of the
business. The value of the stock fluctuates along with the business's worth.
How do stocks work?
To raise money, businesses sell shares of their company. They then use that
money for a variety of purposes: A business may use the funds received from a
stock offering to fund new goods or product lines, invest in business expansion,
repay debt, or invest in growth.
An initial public offering, or IPO, is how businesses normally start offering
shares of their stock. When a company's stock is listed on the stock market,
investors can buy and sell it. If you choose to buy a stock, you will frequently
do so from an investor who wants to sell, not the company itself. In the same
way, if you wish to sell a stock, you'll sell it to another investor.
As a stock investor, there are two basic ways you can make money:
Capital gains: If you sell your shares for more than you paid for them, you keep
the difference, which is referred to as a capital gain. Conversely, if you sell your
shares for less than what you paid for them, this is called a capital loss.
Dividends: Dividends are a little piece of the company’s profits, typically paid
quarterly. Companies don’t have to pay dividends to their shareholders, but
many times they do. It’s important to note, even companies that have
historically paid a dividend can stop at any time.
8. Why do people buy and store gold
Protection from the economic downturn
Gold has always been a means of payment in special economic activities.
Negative events such as inflation also increase the value of gold.
The value of gold has a future to rise in the long term
Ever since people started using gold to exchange, until now, the rise of the
jewelry industry has increased its value of it. Additionally, during market crises,
customers tend to buy more gold, making the prices continue to go up.
Gold is rare
The amount of exploited gold is small compared to coal and other metals, and
the process of exploiting and making pure gold is also very expensive and takes
a long time, that’s why its price is much higher.
Gold rarely becomes outdated
Gold plays many roles in our lives, and it also becomes a symbol of wealth.
Applying technology in the work of processing and crafting diversifies the
model, shape, and size of golden products, which increases the value of itself
and its users.
Storing gold is a long-standing tradition
That’s because the important value of gold is irreplaceable. Storing gold ensures
a financial source for yourself and your family. Buying gold is not just to sell
when the price rises, but it’s also for the urgent need for money. In Vietnam,
gold is a necessary dowry at weddings. Golden objects are also passed down
from generation to generation as a family tradition
9. Explain Bitcoin. How does it work?
Bitcoin= a cryptocurrency, which is designed to act as money and a form of
payment outside the control of anyone, removing the need for third-party
It works:
Digital money is part of a blockchain and a network is needed to run it. A
blockchain is a ''distributed ledger"' - a shared database that stores data. The
data history of the blockchain is secured and it's unable to be changed
When a Bitcoin trade takes place on the blockchain, information from the
previous block is copied to a new block with the new data, encoded, and the
trade is verified by Bitcoin miners. When a deal is confirmed, a new block is
opened, and a Bitcoin is created and given as a payment to the miners
10.Why does the government collect taxes?
Collecting taxes and fees is a way for countries to have funds for investing in
national programs, infrastructure, and public services for citizens and businesses
like education, housing... Tax is the way to preserve sustainable growth and
benefits for a nation and its citizens
MARKETING
1. Marketing is simply another word for advertising
Disagree because marketing is not only advertising, it includes research, buying,
selling, promotion, and other activities. Advertising is just the tip of the iceberg,
which companies use to attract customers’ attention to a specific message
2. The main goal of marketing is to maximize the number of customers,
all other goals are not as important
Disagree. It depends on the purpose of marketing. In business, profit is the
primary factor so for companies, it is mainly used to maximize the number of
customers. However, marketing is not only for business but also for all people.
Many non-profit organizations or governments use marketing to convey
messages. For example, the Vietnamese Ministry of Public Health made a song
with the contribution of famous singers such as Min and Erik to raise the
awareness of residents in protecting themselves in Covid 19 pandemic
3. People who are successful in marketing are creative and outgoing but
are not good with numbers and statistics
Disagree. The first is about being creative. Creativity is a necessary element in
marketing but it is not really. People can be creative with many initiatives but
their creativity is within the framework. Secondly, not all marketers are
outgoing. Lastly, people who work in marketing can be good with numbers and
statistics. Of course, marketing does not have to work with many numbers like
accounting and finance. However, doing marketing still has to deal with
numbers such as budget, and customer data. Marketers now sometimes just
need to stay at home and collect customer data and then analyze that data.
4. Marketing makes people more materialistic and over-buying as
people buy products that they don’t need
Agree.
Nowadays, thanks to the development of media, advertisements are made so
complicated and perfect with colorful images, lively sounds, and meaningful
messages that attract buyers to purchase goods although they do not need them.
Marketing is trying to create an illusive need for products rather than showing
their real benefits to consumers. For instance, a company sells eco-friendly
bags, and it promotes to customers that using their products could protect
nature. With this meaningful message, people are immediately attracted to buy.
They think they can contribute to saving the environment when using these
bags, but they don't have to purchase them because there are many other ways
to preserve nature.
5. Why do many people buy fake luxury products?
Asian culture: People care what others think about them. If they dress nicely
and look expensive, they can be treated better or admired by many people
around them.
Another reason: Buyers love luxury products but they can not afford them
because of their top dollar. In this situation, they may purchase fake ones, so
they still own the design of these items but buy them at a cheaper price.
Third reason: People who desire or are under pressure to follow the latest trend
tend to buy counterfeit goods. They only use them to take photos posted on
social media to share their fashion style
6. Can/ should we trust Marketing
Trust it partly not completely
What people can see are things arranged and planned carefully, which is just a
small part of marketing, and all these things are made deliberately to seek
attraction. People only know images appearing in front of their eyes, not what
happened behind them. Therefore, it is inadvisable to believe in marketing
completely. Instead, we need critical thinking to differentiate what is right and
what is wrong
