2a) Self-regulation, regulation by the government and regulation by a governmental agency are three approaches to the regulation of financial markets. Discuss and explain their differences.
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2a) Self-regulation, regulation by the government and regulation by a governmental agency are three approaches to the regulation of financial markets. Discuss and explain their differences.
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- Why are banks more willing to lend to well-established firms?Explain what is the function of the following components in a country's financial system. regulators, commercial banks, investment banks and non-banking intermediariesQUESTION 2 2.1. Banking institutions, unlike many production industry players, operate with minimal equity as a proportion of their assets. Explain why, despite low equity levels, banks are able to perform well in line with their intermediation function and gearing plans?
- Question 1 Briefly explain how the adverse selection problem can affect the financial markets. Explain how financial intermediaries can help to solve the adverse selection problem in stock and bond investmentsQ1. The importance of studying financial markets and financial institutions for the citizens. (self-framed 4 sentences)1) which of the following types are not considered to be non-banking financial institutions ? A- trading bank B- Consumer finance C- Credit Unions D- Consumer finance
- A corporation acquires new funds only when its securities are sold in the( ) 1) secondary market by an investment bank 2) primary market by a stock exchange broker 3) secondary market by a securities dealer 4) secondary market by a commercial bank 5) primary market by securities commission in the capacity of having a legal authority 6) none of the answers are correctExplain what is meant by Creation of NPAs as a challenge faced by financial system1. Statement I. In the Philippines, financial intermediaries are restricted in what they are allowed to do and what assets they can hold.Statement II. Money supply is the availability of financial resources for deployment in the financial system. It is making the money available for use or for trade or investment. a. Both statements are true.b. Both statements are false.c. Statement I is true; Statement II is false.d. Statement I is false; Statement II is true. 2.A commercial paper is defined as, except: a. Unsecured promissory notes that are only issued by large and credit worthy enterprises. b. Directly issued to the buyer, no secondary market. c. May have stated interest rate or sold at discounted basis. d. None of the above
- Explain the reasons for the emergence of financial crises in the world and what measures were taken to overcome the crisis.Why do banks choose to securitise their assets? Explain how securitisation may exacerbate the asymmetric information problems in the financial markets. Discuss the role of mortgage-backed securities in the financial crisis of 2007-2008Q1: Define and differentiate between: a) Organized exchanges and Over the counter markets b) Open Ended vs Closed Ended Mutual Funds c) Moral Hazard and Adverse selection Q2: What is meant by asset transformation and how is it the basis for differentiating between indirect finance and direct finance? Q3: What are the three main reasons for regulating financial markets and institutions? Also list the major regulation examples under each of the three reasons. Q4: What value do mutual funds add for individual investors and how? Q5: Using the relevant financial securities and institutions, explain the chain of events which lead to the 2007 global financial crisis. Q6: Last year Fauji Fertilizer Company Limited (FFCL) gave an annual dividend per share of Rs. 8.85 which is expected to grow at 5%, forever. Calculate the per share price of the stock if its required rate of return is 14%? Q7: Calculate the duration of a 7-year coupon bond having a 11% coupon rate. The current market…