Why did so many investment banks have to start buying CDO’s and other mortgaged backed securities...
Why did so many investment banks have to start buying CDO’s and other mortgaged backed securities themselves (rather than selling them to other investors). Why did they buy these assets?
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Why did so many investment banks have to start buying CDO’s and
other mortgaged backed securities...
Which of the following best describes the benefits to the borrower of selling asset-backed securities? Due...
Which of the following best describes the benefits to the borrower of selling asset-backed securities? Due to the portfolio effect, the borrower can package up low-quality accounts receivable and sell them for a premium price. The borrower trades future cash flows for current cash flows. The asset-backed security is likely to carry a high credit rating of AA or better. The borrower trades future cash flows for current cash flows and the asset-backed security is likely to carry a high...
There are various types of financial institutions and intermediaries such as commercial banks, investment banks, mutual...
There are various types of financial institutions and intermediaries such as commercial banks, investment banks, mutual funds, hedge funds, pension funds, insurance companies, etc. Why are there so many different financial intermediaries other than commercial banks? How does an investor’s risk attitude and/or wealth play a role in his/her selection of a financial institution or intermediary? If you were an investor seeking moderate return for your investment, how would you select a financial institution or intermediary? Choose one and explain...
As an investment manager of Southern Cross fund, you have $5 million in capital to purchase debt securities; $3 million...
As an investment manager of Southern Cross fund, you have $5 million in capital to purchase debt securities; $3 million for money market securities and $2 million for bonds. Having finished your money market purchases, you move on to buying bonds. Telstra is selling 5 year bonds at a face value of $1,000,000 which pay a semi-annual coupon of 6% p.a. You require a yield-to-maturity (YTM) of 7% pa. on Telstra's bonds, what price are you willing to pay for...
Which of the following is a characteristic of entrepreneurs? a. They start a business so that...
Which of the following is a characteristic of entrepreneurs? a. They start a business so that no form of loss is incurred. b. They risk their time, money, and other resources to start and manage their business. c. They believe in creating wealth for the underprivileged rather than for themselves. d. They have little or no impact on other people in the society.
1. Explain why the Financial statements of banks and those of non-bank financial resemble each other?(2...
1. Explain why the Financial statements of banks and those of non-bank financial resemble each other?(2 marks) They are similar many in aspects. The general structure formula of the balance sheet is the same Assets= Liabilities + Equity. So the left side of the balance sheet is the uses of fund and the left side is the sources of funds. 2. Do they have any differences? If so explain as much as you can?(3 marks) Yes, the balance sheet formula...
Why can banks with greater equity financing borrow funds cheaper than other banks? A.) Because they...
Why can banks with greater equity financing borrow funds cheaper than other banks? A.) Because they have proportionately more financial leverage and hence less risk. B.) Because a greater proportion of their assets have to be in default before they fail. C.) Because they have less credit risk. D.) Because they have lower required reserves.
Why can banks with greater equity financing borrow funds cheaper than other banks? Group of answer...
Why can banks with greater equity financing borrow funds cheaper than other banks? Group of answer choices Because they have proportionately more financial leverage and hence less risk. Because a greater proportion of their assets have to be in default before they fail. Because they have less credit risk. Because they have lower required reserves.
13 a. Mutual funds restrict frequent buying and selling of assets in the fund. have an...
13 a. Mutual funds restrict frequent buying and selling of assets in the fund. have an international agenda. pool investors' money and buy a collection of stocks or bonds. require a fee to join. b. Passively managed mutual funds can be classified according to the type of asset or according to the industry sector. vary according to a manager’s discretion. require a fee to join sector funds. include various types of government securities. c. Mutual funds are popular because they...
1. What does Investment Management include? 2. Why do corporations and banks use the money market?...
1. What does Investment Management include? 2. Why do corporations and banks use the money market? 3. Why are T-bills considered among the safest investments? 4. Why corporate bonds usually have higher interest rates than government bonds? 5. Which kind of bonds is typically issued by start-ups and why?
Question 1 (1 point) Saved In a world without deposit insurance we would expect to see...
Question 1 (1 point) Saved In a world without deposit insurance we would expect to see all the following EXCEPT: Question 1 options: frequent bank runs. the public being reluctant to deposit in banks. people keeping more money in cookie jars and under the mattress. Question 2 (1 point) Saved All the following are current regulations on banks, EXCEPT: Question 2 options: Banks need to show their books to on-site examiners. Banks need to hold a certain amount of capital...
As an investment manager of Southern Cross fund, you have $5 million in capital to purchase debt securities; $3 million for money market securities and $2 million for bonds. Having finished your money market purchases, you move on to buying bonds. Telstra is selling 5 year bonds at a face value of $1,000,000 which pay a semi-annual coupon of 6% p.a. You require a yield-to-maturity (YTM) of 7% pa. on Telstra's bonds, what price are you willing to pay for...
1. Explain why the Financial statements of banks and those of non-bank financial resemble each other?(2 marks) They are similar many in aspects. The general structure formula of the balance sheet is the same Assets= Liabilities + Equity. So the left side of the balance sheet is the uses of fund and the left side is the sources of funds. 2. Do they have any differences? If so explain as much as you can?(3 marks) Yes, the balance sheet formula...
1. What does Investment Management include? 2. Why do corporations and banks use the money market? 3. Why are T-bills considered among the safest investments? 4. Why corporate bonds usually have higher interest rates than government bonds? 5. Which kind of bonds is typically issued by start-ups and why?
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