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Question 1 Last week, the City of Toronto issued a social bond offering worth $100 million. How does this article relate to our discussion of bonds and debt instruments, sustainable finance, and the...

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Question 1
Last week, the City of Toronto issued a social bond offering worth $100 million. How does this article relate to our discussion of bonds and debt instruments, sustainable finance, and the goal of the financial manager? Do you anticipate more social bond offerings being made? What opportunity do bond issues such as these create for investors?
https:
www.toronto.ca/news/city-of-toronto-issues-inaugural-social-bond-a-first-in-canadas-public-secto
Question 2
In this article, Wa
en Buffet offers some advice concerning bo
owing, credit card debt, and investing in stocks. What do you think about this advice? What strategies do you think are important in getting through the crisis financially?
https:
financialpost.com/moneywise/wa
en-buffett-on-how-to-financially-survive-the-coronavirus/wcm
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Question 3
This recently published article discusses conditions associated with the "Large Employer Emergency Financing Facility", which require certain companies in Canada to "disclose climate impacts and commit to making environmentally sustainable decisions" in order to receive economic relief from the Canadian government. What long-term impacts might this policy have on the sustainability of the Canadian economy?
Other conditions associated with the economic aid include "making sure that there are no share buybacks or dividends or excessive executive pay ...". Why might these conditions have been put into effect? Without these conditions, what actions might companies have been motivated to pursue, and why?
https:
e360.yale.edu/digest/to-get-covid-19-relief-companies-in-canada-will-have-to-disclose-climate-impacts
Answered Same Day Jul 28, 2021

Solution

Ishmeet Singh answered on Jul 29 2021
140 Votes
Question 1:
Solution: Generally social impact bonds are a way a private investors funds in social cause/program and if they deliver results set by government, they get a return. Range is 8-12% generally the programs are homelessness, prison recidivism or foster kids etc. Tested in more than 27 countries. Investors generally put their money considering the risk is minimal because the programs are proven by multigenerational, public funded and control groups so a fairly high chance of money coming back. But more often it is for social cause a manner of repaying the society.
Now, if you are doing philanthropy you have to do due diligence of the social outcome, if you are expecting a good financial investment you do due diligence on returns here you do for both. Now, what makes you a good fund/financial manager is when you realise when you are trying to optimise two outcomes in one instrument chances are slim you will find the right opportunity. However, with that being said it is important to have the knowledge about the market in which you are investing like Health in India, Infra in Bangladesh or Sanitation in Africa.
It generally works in two ways, first is government having contract with service providers basically government measures the progress. The second part is there are investors who are going to fund for the working capital during this long period. Yes, it is a means of sustainable finance which encompass negative screening (Eliminates certain companies or practices from portfolio) and ESG integration (is more like re-weighting,...
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