Answer your friend who has following statements and questions: (1) Household debt and house prices do not cause systemic risk in a developed country like Norway (Table 1). (2) House prices grow equally across different Norwegian cities (Table 2). Table 1: Table 2: Household Debt Mortgages/Total Regional House Prices (2003=100) House Ratio (% Prices/Disposable Loans (%) Disposable | Income Income) Debt Per Сapita (Ages 15- 74) Oslo Kristiansand Stavanger 2000 130 130 2009 180 140 42 150 175 200 2012 200 160 43 200 195 250 2018 230 47 300 220 260 (3) House price growth is being totally determined by the cultural homeownership of Norwegians rather than the Norwegian tax system. (4) Household debt does not theoretically cause a problem in Norway since many households have also assets to pay off the debts.

Answer your friend who has following statements and questions: (1) Household debt and house prices do not cause systemic risk in a developed country like Norway (Table 1). (2) House prices grow equally across different Norwegian cities (Table 2). Table 1: Table 2: Household Debt Mortgages/Total Regional House Prices (2003=100) House Ratio (% Prices/Disposable Loans (%) Disposable | Income Income) Debt Per Сapita (Ages 15- 74) Oslo Kristiansand Stavanger 2000 130 130 2009 180 140 42 150 175 200 2012 200 160 43 200 195 250 2018 230 47 300 220 260 (3) House price growth is being totally determined by the cultural homeownership of Norwegians rather than the Norwegian tax system. (4) Household debt does not theoretically cause a problem in Norway since many households have also assets to pay off the debts.

Business/Professional Ethics Directors/Executives/Acct

8th Edition

ISBN:9781337485913

Author:BROOKS

Publisher:BROOKS

Chapter8: Subprime Lending Fiasco-ethics Issues

Section: Chapter Questions

Problem 6.1EC

See similar textbooks

Similar questions

Which of the following was NOT a direct and major consequence of the 2007-2009 U.S. Subprime Financial Crisis? Group of answer choices a. Small consumer and household savers lost all their money they had in savings accounts due to the failure of many smaller FDIC member banks b. Many people lost their homes when they could no longer make their payments after their subprime mortgage rates reset to a much higher rate after two years c. Lehman suffered a major financial collapse and ultimately was dissolved after many of its remaining parts were purchased by Barclays and Nomura, among others d. The U.S. stock markets dropped dramatically as the credit fueled economy of the mid-2000s started to suffer after the credit bubble began to burst.
For each of the following events/items, state whether the impact is positive(+), negative (-) or no impact (0). a) A Malaysian company borrows in Euros from Deutsche Bank. The loan is repayablein six months. The Ringgit appreciates against the Euro. b) What happens if the loan in (a) above is repayable in one lump sum in five yearsfrom now and the Euro now appreciates against the Malaysian Ringgit? c) A Malaysian mutual fund invests in an Australian ETF (exchange traded fund). TheAustralian Dollar appreciates against the Malaysian Ringgit.
Differentiate between Riba-al-Nasia and Riba-al-Fadl with examples of each. What is the role of Market Practice in Riba? During COVID-19, following economic relief packages were delivered by different states. Ehsaas Emergency Cash program has been launched by the Prime Minister of Pakistan on April 1, 2020. United States issued $1200 checks to Americans. The UK government committed £30 billion to saving jobs and helping the young find work in an economy ravaged by the corona virus pandemic. Do you find any type of Riba involved in any of these packages? If yes, which one? How? (you can explore the details of these packages).
In 2015, president Donald Trump made the statement "it has not been easy for me. I started off in Brooklyn, my father gave me a small loan of a million dollars." Donald Trump obtained this "small loan" in 1968. In 1968, the consumer price index (CPI) was 34.8. As of May 2019, the CPI was 256.092. If that "small loan" was adjusted to May 2019 dollars, how much did Donald Trump get (in 2019's currency)?
Why in the USA's FDI, bank loans are not used too much compared to non-bank loans? (18% for bank loans and 38% for nonbank loans) Why the direct finance is more important than indirect finance in the USA's financial market?
Which of the following was NOT a direct and major consequence of the 2007-2009 U.S. Subprime Financial Crisis? a. Small consumer and household savers lost all their money they had in savings accounts due to the failure of many smaller FDIC member banks b. Many people lost their homes when they could no longer make their payments after their subprime mortgage rates reset to a much higher rate after two years c. Lehman suffered a major financial collapse and ultimately was dissolved after many of its remaining parts were purchased by Barclays and Nomura, among others d. The U.S. stock markets dropped dramatically as the credit fueled economy of the mid-2000s started to suffer after the credit bubble began to burst.
More than 40 million Americans are estimated to have at least one outstanding student loan to help pay college expenses (40 Million Americans Now Have Student Loan Debt, CNNMoney, September 2014). Not all of these graduates pay back their debt in satisfactory fashion. Suppose that the following joint probability table shows the probabilities of student loan status and whether or not the student had received a college degree. a. What is the probability that a student with a student loan had received a college degree? b. What is the probability that a student with a student loan had not received a college degree? c. Given that the student has received a college degree, what is the probability that the student has a delinquent loan? d. Given that the student has not received a college degree, what is the probability that the student has a delinquent loan? e. What is the impact of dropping out of college without a degree for students who have a student loan?
Below you can find the memoranda for the country called LALALA. All values are in millions of US Dollars. Current Account Balance (net) =? Financial Account Balance (net) = 850 Financial Derivatives (net) = 50 Capital Account Balance (net) =- 10 Statistical Discrepancy = - 80 Depending on the above information calculate the value for the current account balance. Do you think LALALA is suffering a current account deficit or enjoying a surplus? Explain shortly. [Hint Remember the balance of payments (BOP) is balanced by definition]
n this economy, there are 10,000 borrowers. Each person borrows $100 for a 1 year loan. For the lender not to make a loss, the lender must set an interest rate such that they earn at least as much as their outside option of not lending to people from all borrowers that did not default in this economy. In this case, the outside option is the risk-free interest rate on a 1-year US Treasury securtiy. The 1-year USTS pays annual interest rate of i = 0.03. What is the minimum interest rate that the lender will charge to borrow money in this economy
In periods when home prices declined substantially, some homeowners blamed the Central bank. In other periods when home prices increased, homeowners gave credit to the Central bank. How can the Central bank have such a large impact on home prices? How could news of a substantial increase in the general inflation level affect the Central bank’s monetary policy and thereby affect home prices?
Consider two local banks. Bank A has 95 loans outstanding, each for $1.0 million, that it expects will be repaid today. Each loan has a 4% probability of default, in which case the bank is not repaid anything. The chance of default is independent across all the loans. Bank B has only one loan of $95 million outstanding, which it also expects will be repaid today. It also has a 4% probability of not being repaid. Which bank faces less risk? Why? A. The expected payoff is higher for Bank A, but is riskier. I prefer Bank B. B. The expected payoffs are the same, but Bank A is less risky. I prefer Bank A. C. In both cases, the expected loan payoff is the same: $95 million×0.96=$91.2 million. Consequently, I don't care which bank I own. D. The expected payoffs are the same, but Bank A is riskier. I prefer Bank B.
Back in the early 2010s Some EU countries like Greece and Cyprus spent much more money than it can earn from its fiscal revenues, resulting a failure in paying back the principal and interests on the national bonds, thus resulted a sovereign debt risk. 2. The main difference between the Federal Reserve in the US and other central banks is that the Fed is actually a banking system that has several independent banks covering an area of several states instead of one single bank. Please just tell. Statement is true or false