Finc 43 - Study guides, Class notes & Summaries

types of risk correct answers credit liquidity interest rate market foreign exchange sovereign technology/ operational off balance sheet insolvency foreign exchange risk correct answers exchange rate changes can affect the value of an FIs assets and liabilities denominated in foreign currencies sovereign risk correct answers repayments from foreign borrowers may be interrupted bc of interference from foreign govs. technology/ operational risk correct answers incurred by an F...

FINC 4331 FINAL EXAM (CEC CERTIFICATION) QUESTIONS WITH 100% SOLVED SOLUTIONS!!

your manager has asked you to prepare an analysis for a borrowing request at your bank, which of the following tasks are you most likely to complete first? Analyze the company's available collateral Prepare a term sheet Evaluate the company's business strategy Create a projection - ANSWER Evaluate the company's business strategy

ways financial intermediaries can reduce transactions costs correct answers - economies of scale - expertise - liquidity services lemons problem correct answers lender is unable to tell good borrowers from bad borrowers solutions to eliminate information asymmetry correct answers - private production & sale of information - gov't regulation - financial intermediation - collateral - net worth ways to solve moral hazard problems correct answers - monitoring - gov't regulation -...

your manager has asked you to prepare an analysis for a borrowing request at your bank, which of the following tasks are you most likely to complete first? Analyze the company's available collateral Prepare a term sheet Evaluate the company's business strategy Create a projection - Evaluate the company's business strategy You are calling for the first time on the owner of a successful local business that currently banks with another bank in your market, You are very interested in dev...

How could Federal Reserve policy in the 2001 recession have possibly been a catalyst that eventually led to the 2007-09 financial crisis? - ANSWER To keep recession away, the Federal Reserve lowered the Federal funds rate 11 times - from 6.5% in May 2000 to 1.75% in December 2001 - creating a flood of liquidity in the economy. Culprits for Financial Crisis: The lenders - ANSWER lent funds to people with poor credit and a high risk of default.

ABC corp has encountered financial difficulty in the past year and experienced substantial management turnover during that time. Although loan payments remain current and the bank has attempted to work with the new management team to identify causes of the performance problems, the company has decided to file bankruptcy. Which of the following effects of the bankruptcy is LEAST likely to affect the bank? - ANSWER monthly loan payments prior to the filing must be returned All of the followi...

FINC 435 UTK Exam 3 Questions With Accurate Answers. Preferred stockholders have a claim senior to common stock but junior to bondholders. - answerTrue A red herring prospectus is a preliminary version of a security offer that is circulated to potential buyers before SEC approval (registration) is obtained. - answerTrue Compared to the market order, a limit order will always be executed if the market is moving fast. - answerFalse If the stock markets are semi-strong efficient, stock pric...

FINC 4331 FINAL EXAM (CEC CERTIFICATION) 2024 QUESTIONS WITH 100% SOLVED SOLUTIONS!!

How could Federal Reserve policy in the 2001 recession have possibly been a catalyst that eventually led to the 2007-09 financial crisis? - To keep recession away, the Federal Reserve lowered the Federal funds rate 11 times - from 6.5% in May 2000 to 1.75% in December 2001 - creating a flood of liquidity in the economy. Culprits for Financial Crisis: The lenders - lent funds to people with poor credit and a high risk of default. Culprits for Financial Crisis: Homebuyers - buying houses...