Unit 2 Discussion

Which of the following regulatory events in the 20th century potentially influenced the financial sector? Passing of the Glass-Steagall Act Establishment of the Securities and Exchange Commission (SEC) Establishment of the Federal Reserve Banking System Repeal of the Glass-Steagall Act Securities Investor Protection Act passed

(Students should visit the SEC website, www.sec.gov, for supplemental resources.) List several provisions of the Sarbanes–Oxley Act that are designed to restore public confidence in the U.S. capital market system.

Is it necessary for the Federal Reserve to communicate the strategy and objectives of its monetary policymaking to financial markets and the public effectively? What challenges will the Federal Reserve face in these communications? Please provide your reasons for the questions.

a) Discuss briefly the history, legislation, function, remittance of the Capital Market Board (CMB). While writing your answer, focus on its mission and how the Board runs and what it does to achieve the mission.

do you think that the collaboration between Central Banks and Government creates challenges for supporting economic growth and development?

PLEASE ANSWER ASAP   The board of a major bank is discussing their investment appraisal methodology as they have a new project under consideration. They have agreed that using the CAPM approach is sensible as they feel it likely that most of their shareholders have a well-diversified shareholding in the stock market as a whole.   There has been some dispute about which risks constitutes specific risks in the bank and which risks are more systematic in nature partly driven by the nature of the bank’s operations. Equally, no one seems quite sure what the required return derived from the CAPM formula actually represents.   The finance director has produced the following data relating to the bank itself, the financial market and the new project it is considering:   Data Required return on existing debt, 6.0% Cost of existing debt to the bank, 4.8% Return on short-dated gov secur’s, 5.2% Return in the stock market (index), 12.8% Equity beta of the bank (levered), 1.35 Beta of the new…

Market participants, including financial institutions, fund managers and corporations, must understand monetary policy setting impacts on economic activity and business cycle. A central bank will typically implement monetary policy settings in order to achieve certain economic outcomes over a business cycle. In order to forecast future economic conditions and business activity, business managers therefore need to understand the business cycle. Briefly describe the principal monetary policy objective of the Reserve Bank of Australia and give examples of different economic indicators that may give an insight into the future stages of a business cycle.

Several market participants interact in developed markets to organize the exchange of funds from buyers to sellers. Such institutions as investment banks, commercial banks, financial services corporations, credit unions, pension funds, life insurance companies, mutual funds, exchange traded funds, hedge funds, and private equity companies play a key role in facilitating these transfers. Identify the financial institution based on each description given in the following table: Description Financial Institution They underwrite, distribute, and design investment securities for corporations to help them raise capital.   Finacial Services Corporations,Commercial Banks, Investment Banks   They are established by an employer to facilitate and organize employee retirement funds. They are asset pools that invest in securities that have a potential to give stable returns.     Life Insurance, Credit Unions, Pension Funds With the use of advanced investment techniques, these…

If one still argues that the monetary policies conducted by the Federal Reserve is heavily influenced by the Congress and the White House, what could be the evidence we can find in the system which supports the argument? (briefly explain in a paragraph or so)

Which of the following is the federal, independent agency that provides oversight of public companies to maintain fair representation of company financial activities for investors to make informed decisions? Group of answer choices 1.IRS (Internal Revenue Service) 2.SEC (Securities and Exchange Commission) 3.FASB (Financial Accounting Standards Board) 4. FDIC (Federal Deposit Insurance Corporation)

Why do managers of financial institutions care so muchabout the activities of the Federal Reserve System?

Explain the use of Economic Capital in measuring risk among financial institutions and its relationship to Regulatory Capital.

Using the relevant financial securities and institutions, explain the chain of events which lead to the 2007 global financial crisis.

“In view of the increase in complexity of banking activities, emergence of new risk factors andcontinuous change in financial landscape, there is a need for financial risk expertise to undertake risk assessment both at individual institution level as well as on a system-wide basis.” [BNM, 2021](a) Discuss the above statement.

explain in detail the Bretton Woods system , and discuss its effects on the financial markets

Should regulators of financial institutions (FIs) be concerned about the increased trading activity of FIs?

7.  You work for an investment fund that has significant shareholdings in several large companies. You have been asked to prepare a brief for the fund management about the agency problem and the mechanisms available to mitigate the problem. In your brief explain what the agency problem and what governance mechanisms can be used to reduce the information asymmetry and the scope of the agency problem.