Explain the uses of financial instruments

Q: Compare and contrast banking to non-banking institution. How these greatly affect the business…

A: While banks and non-banking financial companies (NBFC) both are key financial intermediaries, that…

Q: 11. Which of the following statements is TRUE? (A) ETFS consist of funds that invest only in stocks.…

A: An Exchange Traded Fund is a fund associated with the price, It allows investors to easily sell or…

Q: Why might credit ratings agencies give different credit ratings to sovereign debt issued by the same…

A:

Q: Name anddescribe two markets that are part of the financialsystem in the U.S. economy

A: Bond market and stock market are two major part of the financial system in the U.S. economy.

Q: The following are the advantages of financial intermediaries, except:  A. Provide guaranteed returns…

A: Financial Intermediaries:- Financial intermediaries function as go-betweens for financial…

Q: Ms. Huma is expecting a rise in the share price of Bank Muscat. But, currently she does not have the…

A: Since it is given in the question that Ms. Huma is expecting a rise in the share price of bank…

Q: 2. Discuss the role of offshore banking in derivatives.

A: Banking plays an important role in the deposit money from the customer and providing loan facilities…

Q: Explain the nature of the credit risks to a financial institution in a swap agreement.

A: A swap is a financial arrangement between two parties to exchange financial instruments, cashflows,…

Q: s there any over-the-counter market of stocks/bonds/derivatives in Pakistan? If yes, then explain…

A: Yes, there is an OTC (Over The Counter) market for stocks/bonds/derivatives in Pakistan. The Karachi…

Q: Explain potential conflict of interest in the operational structure of systematically important…

A: In the mentioned question we have been asked what are the conflicts of interest in operational…

Q: Explain how the prohibition of riba in Islamic commercial contracts could translate into value…

A: Banking industry is the backbone of the country. Banking industries maintain the amount of money in…

Q: How do interest rates affect bond yield and bond prices.

A: Bonds are a form of financial security in case of which the issuer owes the holder a debt. Borrowers…

Q: Question 4 Using appropriate example, differentiate between commodity and financial derivatives.

A: In economics, a commodity is an economic good, generally, a resource, that has full or substantial…

Q: Q# 3. (a). List out the rules of derivatives (differentiation) and also explain economic application…

A: Following are the rules of differentiation: Sum/Difference rule:…

Q: List and describe thefactors that affect theequilibrium interestrate in the bondmarket

A: Answer - The following factors affect the equilibrium interest rate in the bond market - 1. Supply…

Q: (c) Discuss how the “lemons problem” keep securities market from being effective in channelling…

A: "The Market for Lemons: Quality Uncertainty and the Market Mechanism" is a well-known 1970 paper by…

Q: Which type of security has interest payments that are generally exempt from federal income taxes?…

A: T-bonds or Treasury bonds are fixed-rate government debt security by the U.S. with maturity mostly…

Q: What are the seveb major types of financial institutions as of today?

A: Financial Institutions  Financial institution refers to the institutes which provide the services…

Q: Advance reasons why commercial banks place emphasis on the management of risk.

A: Commercial banks accept deposits from the depositors and use these deposit to lend in the market.…

Q: Because financial intermediaries operate on a big scale, this relates to minimizing the costs of…

A: A firm producing output can yield increasing, decreasing or constant returns to scale.

Q: Define what financial instisutions are and give examples to explain your understanding

A: Types of financial institutions include: 1. Depository institutions:  These institutions are deposit…

Q: Identify the services provided by banks and financial institutions for their business customers.

A: Banks: A bank is a monetary organization that acknowledges stores from general society and provokes…

Q: How can we o determine the extent to which borrowed funds havebeen used to finance assets?

A: Borrowed funds are those funds which business borrows either to finance their assets or to use as…

Q: Mention the four main financial derivatives and tell when each is good for strategic financial…

A: Those financial instruments whose price is determined by the value of another asset are termed as…

Q: Public Companies must file required forms through EDGAR. What are the most important forms, subject…

A: The Securities and Exchange Commission (SEC) requires public companies, some corporate insiders, and…

Q: Identify the advantages and disadvantages of each (repurchase agreements and securities)

A: Repurchase agreements are also called 'Repo.' The repos are short borrowings that individuals use in…

Q: The process of bundling loans together and buying and selling these bundles in a secondary financial…

A: There are two types of financial Market to exchange money and monetary instruments, such that…

Q: Briefly describe and explain the following investments terms; g) EAR h) Amortizing i) Bond…

A: g) The Effective Annual Rate (EAR) is the pace of revenue really acquired on an investment or paid…

Q: How can the existence of asymmetric information provide a rationale for government regulation of…

A: Asymmetric information is a situation the information possessed by the parties is not symmetric. In…

Q: What are the measurement and important key points of financial instruments - presentation PAS 32?

A: A financial instrument is a contract between two parties or entities that has a monetary value…

Q: Explain LIFO reserve and LIFO liquidation and their eff ects on financial statements and ratios

A: A decline in the LIFO reserve from a prior period is an indication that LIFO liquidation has…

Q: Provide a general overview of Integrated Financial Management Information System (IFMIS)

A: Financial Management Information Systems (FMIS) support the robotization and reconciliation of…

Q: Explain what is meant by Creation of NPAs as a challenge faced by financial system

A: A non-performing asset widely known as NPAs is a loan or an advance for which the principal amount…

Q: EXPLAIN YOUR UNDERSTINDING OF EQUITY INSTRUMENTS AND IDENTIFY THE MARKETS WHERE EQUITY INSTRUMENTS…

A: Financial markets are those market place where security are  traded. There are two types of…

Q: 49) Everything else held constant, an increase in the riskiness of bonds relative to alternative…

A: Equilibrium in the bonds market occurs at the intersection of demand and supply curves of bonds.

Q: What is the difference between detachable stock warrants and convertible bonds?

A: A bond is essentially an advance taken out by an organization. Rather than going to a bank, the…

Q: In view of the empirical evidence, what factors do you think might be responsible for the current…

A: In accordance with the empirical evidence, the economies of scale and economies of scope are the…

Q: "Alternative forms of Financial Inflow". Present the topic objectively

A: The "capital flows" of an investment, trade, or company transaction are the transfers of funds.…