Define
Gramm-Leach-Bliley Act
financial disintermediation
McFadden Act
Pension Benefit Guaranty Corporation
Labels: Exam 2 Question 13
The following posts are the questions which appeared on last semester's exams. Students should use the comment sections to answer the questions and respond to the posts of other students.
Define
Labels: Exam 2 Question 13
Why and how did New Zealand change its central bank in the 1980’s?
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Evaluate the following statement:
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Explain how lenders use collateral as part of loan agreements to cope with the problem of asymmetric information.
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Explain how lenders use covenants as part of loan agreements to cope with the problem of moral hazard.
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Explain how lenders use covenants as part of loan agreements to cope with the problem of moral hazard.
Labels: Exam 2 Question 9
Evaluate the following statement:
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Evaluate the following statement:
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Evaluate the following statement.
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Evaluate the following statement.The guiding idea behind the regulation of financial markets in the United States is to protect individual investors from themselves.
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What is securitization? Why is it important to banks?
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Why did the end of regulation Q increase the desire of banks to make floating rate loans rather than fixed-rate loans?
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Evaluate the following statement:The development of Basel IA is important to smaller banks given the comparative advantage Basel II may give larger banks.
Labels: Exam 2 Question 2
Sheila C. Bair, Chairman, Federal Deposit Insurance Corporation stated "the FDIC will evaluate each institution's risk based on three primary sources of information". The third source of information is "long-term debt issuer ratings for large institutions that have them." Explain how market discipline enhances traditional supervision of banks by regulators?
Labels: Exam 2 Question 1
Define the following terms
Evaluate the following statement: “Hedging through the use of an options contract is superior to hedging through the use of a futures contract.”
Why might a general belief that aviation fuel prices would rise make it more difficult for US AIRWAYS to hedge against rising fuel costs using option contracts? Explain.
Evaluate the following statement: “The greater the difference in real interest rates between the United States and the United Kingdom, the smaller the difference between the spot and futures prices of a dollar in pounds.”
Explain how the actions of arbitrageurs will make the exchange rates among three currencies consistent.
Evaluate the following statement: “The weaker the preferred habitats of participants in financial markets the stronger the explanatory power of the pure expectations approach to explaining the shape of the yield curve.”
Evaluate the following statement: “The yield curve will be upward sloping if people expect short term interest rates to rise.”
Evaluate the following statement. “The most useful way to assess the riskiness of a financial asset is by looking at the variance of the return on the asset.”