Explain the following concepts in relation to the role that banks play in financial markets: i) Loan size transformation  ii) Maturity transformation  iii) Risk transformation

Q: Critically analyze concepts behind MBSs and how risk was diversified to secure lending. Analyze what…

A: Concept of Mortgage Backed Security A mortgage-backed security (MBSs) is an investment which is…

Q: uss the factors which l

A: A credit crunch, also known as a credit squeeze, credit tightening, or credit crisis, is an economic…

Q: What is the relationship between securitization and the role of financial intermediaries in the…

A: Securitization is a process in which various financial assets are merged to create an instrument,…

Q: Elaborate with real world examples about different financial markets that contribute forwards growth…

A: There is a strong positive relationship between financial market development and economic growth.…

Q: Define interest rate risk and explain why it is very important in the risk management portfolio of a…

A: Interest rate risk is the potential for speculation misfortunes that emerge from a variation in…

Q: Explain the important implications which investors and corporate managers wishing to use the…

A: Investments are the money or funds invested by the investors in some financial instrument in the…

Q: How is investment banking different from retail and corporate banking? Explain in a flowchart.

A: Retail Banking is the type of Banking which provides banking services or financial services to the…

Q: Describe what is meant by the virtualization of traditional trade finance instruments.

A: First of all we need to understand what is Trade Finance Instruments: It is a payment instrument and…

Q: ance.perhaps you have come across behavior or aspect of financial market that you think can be…

A: Introduction : In simple words, behavioral finance refers to the study branch of finance which deals…

Q: What is bank profitability? and market customer size and the concept of profitability? and…

A: Bank Profitability: Like all businesses, banks profit by earning extra money than what they pay in…

Q: Discuss three major financial risks that companies face today. credit risk, liquidity risk, and…

A: The three financial risk corporation faces today as follows: Credit risk: Credit risk is the risk of…

Q: Describe how financial intermediationand financial innovation affect bankingand the economy

A: Financial institutions refer to institutions that offer financial services in the financial market.…

Q: nterest rate swaps and gap analysis to manage interest rate risk.

A: There are two methods in which a bank can manage its interest rate risk  (a) by matching the…

Q: What is the connection between securitization and the economic function of financial intermediaries?…

A: Introduction: Markets for the trade of financial securities are known as financial markets. These…

Q: pros and cons of diversification in banking.

A: Introduction : The diversification of banking refers to the strategic diversification of banking…

Q: What is the best way to participate in the financial markets

A: In the financial market, the term refers to the market where buyers and sellers meet to transact to…

Q: Discuss how market interest rates are affected by borrowers’ need for capital,expected inflation,…

A: The market interest rates are subject to several customer-related variables, including capital…

Q: How are financial markets classified according to maturity of the claim?

A: In general, financial markets refer to any marketplace where securities are traded, such as the…

Q: What is Competitiveness and how it affects financial market. Identify the risks that may arise.

A: The search for long-term competitive advantage is an important part of all business activity – one…

Q: 1. Discuss the nature of financial markets and the critical assumptions that financial markets are…

A: The financial market refers to a platform that provides funds from surplus units to deficit units. A…

Q: Briefly comment on what the CAPM is for, and how it is used. How (by what) is risk measured in the…

A: The question is related to Capital Asset Pricing Model. This model was developed by Sharpe Mossin…

Q: Explain in detail that how managers of financial institutions manage interest rate risk on Balance…

A: Interest rate risk seems to be the risk of losing money on investment attributable to fluctuations…

Q: Explain the roll of debt and equity markets in the economy. How do they interact with both Primary…

A: Debt and equity market play a vital role in the economy. The market where investors and traders meet…

Q: risk

A: Introduction: Banks & other financial institution play an important role in the economic…

Q: What are the different types of financial institutions? Include a description of the main services…

A: A financial institution (FI) is a company engaged in the business of dealing with financial and…

Q: Explain commercial banks’ brokerage and intermediation functions. Clearly detail how these functions…

A: Commercial bank is defined as the place, where the individuals used to do banking. It makes the…

Q: Discuss with examples about financial innovations

A: Finance Innovation:- Financial innovation is that the method of making new merchandise, services, or…

Q: What is the basic or essential function of the financial markets? Briefly explain how and in what…

A: Financial market is referred as the market, where the people used to trade the financial derivatives…

Q: Impact of ICT In Finance and Management of Banks

A: ICT refers to information and communications technology. In the realm of banking ICT plays a very…

Q: Define and discuss the importance of both Debt Markets and Equity Markets (both primary and…

A: Debt Market:   A debt market is a financial market where debt instruments are traded. Such type of…

Q: Explain why a capital market is needed when the banking system stagnates in financial markets?

A: Capital market is a market for equity shares and long-term debt. It describes any exchange…

Q: What roles are played by an investment bank and its brokeragefirm during an IPO?

A: Investment banks provide various types of services to its clients like underwriting services,…

Q: How do you think financial institutions help financial market to work?

A: fInancial institutions -The firms and organizations involved in the collection and distribution of…

Q: risk transformtion in banks

A: Risk is a term that is used for defining the uncertainty arising in the future from changes in…

Q: What is interest rate risk? Elaborate with example. Explain in detail that how managers of financial…

A: Interest rate risk seems to be the possibility of a drop in the worth of an asset, which might lead…

Q: Finance

A: Introduction: Commercial banks are banks where majority of the people both individuals &…

Q: financial institutions im

A: Introduction : In simple words, financial institutions refers to the entities that are engaged in…

Q: What are the important implications for financial managers when markets operate efficiently?

A: Market efficiency is a concept that shows information is transferred from one to one in a perfect…

Q: What is the diferrence between finanical institutions  and financial markets and  Can they both run…

A: There is a huge difference between financial institutions and financial markets. One thing similar…

Q: What are the risk implications/shortcomings of financial institutions in increasing their financial…

A: Financial leverage is defined as the use of the debt for acquiring an additional assets. Usage of…

Q: What are the advantages and disadvantages of using financial leverage? Answer from the banker’s…

A: Financial leverage is a firm’s capability of borrowing so that the funds raised could be used to…

Q: Elaborate with real world examples about different financial markets that contributed towards growth…

A: Financial market: A marketplace where securities like shares, bonds, debentures are purchased are…

Q: What is the prime rate and how is it used by financial institutions?

A: Prime rate : Prime rates is the rate charged by the commercial banks on the customers that are…