How did higher returns securities in the secondary mortgage market contribute to the liquidity crisis and global recession?

Q: How did the recovery stimulant after the collapse of the dot-com bubble in the late 1990s and the…

A: In the late 1990s, there was speculation in the companies related to the internet in excess due to…

Q: During this COVID‐19 pandemic, the South African Reserve Bank (SARB) plays a crucial role in…

A: Due to covid 19, many countries are affected globally all country's central banks have taken the…

Q: Why do you think mortgage backed securities paid higher interest rates than other investments like…

A: The economies around the globe tend to focus on their growth and development. There are various…

Q: 30) Which of the following can be described as involving indirect finance? A) You make a loan to…

A: Borrowers get cash from the financial market via indirect channels, such as through working with a…

Q: What technological innovations led to the developmentof the subprime mortgage market?

A: The subprime loan market is a market that serves individuals with questionable or limited credit…

Q: Would usury laws help or hinder resolution of a shortage in financial markets?

A: Usury law is implemented by the government pertaining to interest on the loans taken by the…

Q: It is the responsibility of the U.S. Department of Commerce to maintain stability in the financial…

A: The responsibility of the US Department of Commerce includes the maintaining of international trade…

Q: Explain why a mortgage-backed security becomes riskier when the values of the underlying houses…

A: Mortgage-backed securities are more risky. The cost of borrowing is represented by interest…

Q: You will be LESS likely to buy bonds if: Stock prices become more volatile. You expect interest…

A: Individual investors seeking pay or the conservation of capital regularly consider adding bonds to…

Q: List any six categories of factors that could cause a financial crisis.

A: Since , financial crisis in a economy is a situation where  the value of the assets fall drastically…

Q: Why are companies' liquidity ratios calculated and which assets are more liquid?

A: Liquidity ratio: It is a type of financial ratio.

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: Discuss the financial innovation in the mortgage market and how it changed the very nature of…

A: PLEASE FIND THE ANSWER BELOW.   MORTGAGE: The term “mortgage” refers to a loan used to purchase or…

Q: Which bank management responsibility is defined as reducing the bank's exposure to dramatic swings…

A: The process of assessing, discovering, and controlling threats to an organization's profitability…

Q: Why do credit spreads risesignificantly during a financial crisis?

A: Credit Spread refers to the difference in the yield obtained on financial fixed income instruments…

Q: Contrast the risk tolerance and Liquidity needs for Banks and Individual investors

A: Introduction There is always a risk in life when there is an opportunity to gain. Knowing how much…

Q: Why was the Term Auction Facility more widely used by financial institutions than the discount…

A: The Term Auction Facility  is a program by Fed  to increase the amount of liquidity in the U.S.…

Q: Define and discuss the portfolio-balance effect in terms of Quantitative Easing and its impact on…

A: Portfolio-balance effect  According to the portfolio-balance hypothesis, the interest rate adjusts…

Q: With reference to examples, discuss the main causes of financial crises in emerging markets.

A: The financial crisis is an economic situation in which asset prices are dropping rapidly, households…

Q: Discuss in detail one negative impact of the 2007–2009 Global Financial Crisis and an approach that…

A: Great recession and the causes is complex and involve several forces. The period required to recover…

Q: If lines of credit and other off-balance-sheet activities do not, by definition, appear on the…

A:

Q: 26. Differences in a risk b. liquidity C. time to maturity d. tax characteristics explain why…

A: Hi! thanks for the question but as per the guidelines, we can answer only one question at one time.…

Q: Explain on how the BASEL III affected the financial institution to the country generally?

A: Basel III is a 2009 international regulatory agreement that established a set of measures aimed at…

Q: What is/are the short-term and long-term impacts of the most recent federal reserve actions (buying…

A: Answer- Need to find- What is/are the short-term and long-term impacts of the most recent federal…

Q: How did the Lehman Brothers' collapse fit into the Great Recession?

A: There have been several events and happenings in the past that have catered to some unusual…

Q: What were the implications of the crisis on the financial industry? (Savings and Loans crisis in the…

A: The Savings and Loan Crisis (S&L) was a long-drawn-out financial crisis. Between 1986 and 1995,…

Q: What are the factors that typically cause a financial crisis?

A: The financial crisis is a situation in the economy in which the price of asset decline steeply,…

Q: When financial crisis hit the nation, how it can impact on the financial market and what is the…

A: A financial crisis is the market situation in which the value of the price of assets see a steep…

Q: What is Supplies of Liquid Funds? What are Laws Limiting Bank Lending and Risk?

A: Liquid funds are mutual funds that invest in assets having a residual maturity of up to 91 days.…

Q: How did the securitisation of mortgages and the targeting of sub-prime borrowers contribute to the…

A: Mortgages to high-risk borrowers were expanded, and home prices rose, contributing to a period of…

Q: If bad credit risks are the ones who most actively seek loans, then financial intermediaries face…

A: When the parties involved in any economic activity do not have same or symmetric information about…

Q: Why are financial intermediaries willing to engagein information collection activities when…

A: The financial intermediaries provide different instruments to their customers. They provide…

Q: If interest rates decline, which would you rather beholding, long-term bonds or short-term bonds?…

A: Long-term bonds come with a maturity span of 10 years to 30 years. In general, such bonds pay a…

Q: Dividends and pensions can provide liquidity to investors * True or False?

A: Dividends and pensions can provide liquidity to investors. - TRUE

Q: Explain the following statements: “(1) individual financial institutions will generally have…

A: A macroprudential approach supervises and regulating to ensure stability for general equilibrium and…

Q: The reduction in interest rates by the Reserve Bank also stimulated the demand for housing, and some…

A: Graph:-

Q: In terms of the financial crisis of 2007 and 2008, what were the factors that led to the mortgage…

A: Answer in step 2

Q: What are the convergence of issues that led to and caused the subprime financial crisis of 2007-2008

A: Financial crisis of 2007-2008, particularly known as mortgage crisis was basically the result of…

Q: What do you think should be done to prevent another global financial crisis?

A: Financial crisis are results from the systemic failures, regulatory absence, pandemic, unanticipated…

Q: Explain the events that transpired in the 2008 financial crisis.

A: A recession is a time of financial withdrawal, where organizations see less interest and start to…

Q: Trace the impact of a sale of government bonds by the Central bank on bond prices, interest rates,…

A: Real GDP: It refers to the measurement of the total value of all goods and services produced…