Credit rating agencies - Samenvattingen, Aantekeningen en Examens

CFA Level 1 - 101 Must Knows 368 Questions with Verified Answers Addition Rule of Probability - CORRECT ANSWER ADDITION: P(A or B) = P(A) + P(B) - P(AB) Roy's Safety First Criterion - CORRECT ANSWER Safety First Ratio = (E(R) - Rₜ) / σ Larger ratio is better If (Rₜ) is risk free rate, then it becomes Sharpe Ratio Sharpe Ratio - CORRECT ANSWER Sharpe Ratio = (E(R) - RFR) / σ Larger ratio is better If (Rt) is higher than RFR, then it becomes Safety First Ratio Centra...

An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe? - Answer-Aleatory: an aleatory contract means unequal amounts are exchanged between payments and benefits What is the Federal Credit Reporting Act? - Answer-Establishes procedures that consumer-reporting agencies must follow in order to ensure that records are confidential, accurate, relevant, and ...

Basic Appraisal Principles - Chapter 2 Study Guide Questions with Complete Answers The transfer of money from low interest-bearing accounts to higher interest-bearing accounts is referred to as disintermediation recession surplus productivity profiteering disintermediation In 1987, eight U.S. appraisal organizations formed the National Association of REALTORS The Appraisal Foundation the Appraisal Subcommittee Appraisers without Borders The Appraisal Foundation True or False? The Board ...

FIN3703 Assignment 2 (COMPLETE QUESTIONS & ANSWERS) Semester 2 2024 - DUE 7 September 2024 ;100 % TRUSTED workings, Expert Solved, Explanations and Solutions. For assistance call or W.h.a.t.s.a.p.p us on ...(.+.2.5.4.7.7.9.5.4.0.1.3.2)........... Dalton Ltd – is the third largest South African manufacturer of high-quality JoJo tanks with its head offices situated in Midrand. The company owns four branches: one in Naturena, the second in Ennerdale, the third in Pachuca and the fourth in Roodep...

Common Stock - ANSWER-Is a security that represents ownership in a corporation. Exercise control by electing a board of directors and voting on corporate policy. Are on the bottom of the priority ladder for ownership structure Have rights to a company's assets only after bondholders, preferred shareholders and other debt holders are paid in full. Preferred Stock - ANSWER-Is a class of ownership in a corporation that has a higher claim on its assets and earnings than common stock. ...

Updated FiCEP Test - Questions and Answer, Summer 2024 Money avoidance is the idea that money is evil or ______________ Undeserved The idea that money is the way to solve all a member's problems is money ______________ Worship Money ____________ is the member's belief that wealth is tied to self-worth. Money is seen as a member's way to one-up others. Status Money vigilance is a member's perceived need for ___________ about their financial matters. Secrecy The ideal spending cycle a member...

Question 1 Explain Probability of default and briefly discuss its uses. (10) Suggested solution It is a statistical percentage probability of a borrower defaulting√ and it is directly linked to credit grades √ Uses • Quantification of credit risk √ PD facilitates distinguishing the credit risk of different asset classes in a portfolio and judging the credit worthiness of the obligor. √ • Allocation of capital√ if the probability of default is high capital allocation is als...

Question 1 Explain Probability of default and briefly discuss its uses. (10) Suggested solution It is a statistical percentage probability of a borrower defaulting√ and it is directly linked to credit grades √ Uses • Quantification of credit risk √ PD facilitates distinguishing the credit risk of different asset classes in a portfolio and judging the credit worthiness of the obligor. √ • Allocation of capital√ if the probability of default is high capital allocation is als...

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 -...

Actual Cash Value - Replacement Cost minus Depreciation. Depreciation (%) = Age/Useful Life ACV = RC - Depreciation Highest depreciation is usually 80% In property insurance, indemnification is usually based on the actual cash value of the property at the time of the loss. EXAMPLE: Roof installed in 2012 for $5000 & has a useful life of 20 years. It will cost $6000 to replace based on current costs. After depreciation, the ACV is $3600. Depreciation is 40% (8 years old / 20 year useful l...