Describe the steps of an asset price crash. Which assets caused the greatest concern during the 2008 financial crisis? Where did those assets come from?
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- Describe the steps of an asset price crash. Which assets caused the greatest concern during the 2008 financial crisis? Where did those assets come from?
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- Why is measuring interdependencies among assets' returns, or, volatilities, important in risk management? Discuss the concept of interdependencies and what implications interdependencies have during periods of financial crises (such as the 2007-09 financial crisis)Discuss the 2007-2008 financial crisis and what impact it had on the financial markets. Who was impacted? What caused the crisis, and how can a future crisis be prevented?How did the Efficient Mark Hyoithese play a role in the financial crisis of 2008-2009?
- During the 2008 recession, large financial institutions including investment and insurance companies, were at risk of bankruptcy due to the sub-prime mortgage crisis. Which element of insurance risk best demonstrates this concept? A. the loss produced by the risk must be definite B. the loss produced by the risk must be measurable C. the loss must not be catastrophic D. the loss must be fortuitous or accidentalHow did the decisions made during the 2008 financial crisis affect our economy and financial markets during the crisis until the end of the recession (approximately 2007-2009) as well as its effects from 2010 until approximately 2019.Who was involved during 2007 financial crisis?
- Regarding the 2007-09 Financial Crisis, answer the following questions: Was this a systemic or a nonsystemic crisis? Explain. How do these differ? Which of the following shocks played a role in the crisis: (a)Increased uncertainty (b)Increase in interest rates (c)Government fiscal problems (d)Balance sheet deterioration (e)Banking problems and panicsDefine the following terms and explain why they were important during the housing and credit crisis of 2007-2009 a.Securitization b. Subprime loan c. Asset write-downThe financial regulations governing the banking sector and most importantly mortgage-backed asset, did not prevent or alleviated the financial collapse in 2008/9? Critically discuss?
- The fallout from the financial crisis of 2008 included an overheated real estate market, fueled by home purchase incentives, poor lending practices, and securitization through high-risk, mortgage-backed securities, which led to a near collapse of global capital markets. As a consequence, many have argued that if the financial institutions had been required to report their loans (and loan-backed investments) at fair value instead of cost, large losses would have been reported earlier. This would have signaled regulators to the problems in the mortgage markets and therefore minimized the losses to U.S. taxpayers. Instructions Explain how reported accounting numbers might affect an individual’s perceptions and actions. Cite two examples.Explain the problem of unknown risks for financial instruments in furthering the 2007-2009 financial crisis.What is/are the reason/s or cause/s of the 2007 Financial Crisis? What did the government do or how did the government intervene in the crisis?