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A: Answer
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A: Answer: TRue
a.Explain how bank regulators have in corporated interest risk into capital requirements.
b.Explain how S&L regulators have in corporated interest rate risk into capital requirements.
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- Which of the following is defined as the level of capital that allows banks to sustain the potential losses arising from all current risks and to comply with an acceptable solvency level. a. Asset liquidity b. Capital adequacy c. Liquidity position of a bank d. Market liquidityBased upon risk, which of the following financial assets is likely to have the highest required rate of return? Select one: A. A corporate bond B. A U.S. Treasury bill C. A bank certificate of deposit D. A share of common stockDistinguish between a primary and secondary capital market and discuss the role played these markets in corporate finance
- Provide an explanation of whether it is advantageous for a bank to classify debt investments as “held to maturity “or “available for sale” if the required return by the market declines? What impact will this have on the bank's balance sheet and net income?Distinguish between illiquidity and insolvency for banks and discuss the role of capital in protecting against these problems.Explain why repurchase agreement and securities are used as lending practice in the capital market
- Could you give some example that explain thoroughly why capital adequacy management in commercial bank is so important?please view images below c. Does the bank have enough capital to meet the Basle requirements? If not, what minimum Tier 1 or total capital does it need to meet the requirement? d.Discuss the major shortcomings of the Basle I accord.Which of the following statements is/are true?Statement 1: A key role of financial markets is to accommodate corporate finance activity. Statement 2: In general, individuals are net demanders of funds, while businesses and governments are net supplier of funds.Statement 3: An important characteristic of securities that are traded in secondary markets is liquidity
- In the equities capital markets, participants play key roles to support primary and secondary capital markets. Participants include investors, speculators, market makers, underwriters, and brokers. how would participants interact to facilitate capital market activities? For example, when there is a Federal Reserve action that affects interest rates, how might the various participants interact with a company going through an acquisition?consider ethical implications of financial reporting and how it relates to acquiring additional investors and accessing markets for additional capital.How is securitization supposed to help banks and S&Ls manage risks andincrease homeowners’ access to capital?