The primary difference among various kinds of depository institutions is in the composition of their loan portfolios the amount of capotial they hold the amount of reserves they hold the amount of securities that they hold

Q: List

A: Basel III accord is developed by Basel Committee on banking…

Q: How does a bank try to achieve the best possible risk adjusted return on its overall loan portfolio?

A: The possibility of a loss arising from a borrower's inability to repay a loan or meet legally…

Q: Explain in detail and with examples why the functioning of mortgage institutions could be considered…

A: Mortgage institutions are the companies that are mainly into the production of mortgage loans, be it…

Q: interest rate risk differs between mortgage companies and other financial institutions

A: The mortgage company is a financial firm that gives out its own loans. They use their own funds or…

Q: What would these securities be called and what does the Bank need to do to ensure the loan monies…

A: Loans refer to the agreement between the borrower and the bank or financial institution for…

Q: a. Bank loans are classified as investment-grade and leveraged bank loans. Explain the difference…

A: (a) Bank Loan extended to corporate borrowers can be segregated into two categories viz.…

Q: Explain how a mortgage company’s degree of exposure to interest rate risk differs from that of other…

A: Commercial banks, investment banks, insurance companies, and brokerage firms are the most frequent…

Q: Assume that the government sets a binding price ceiling on the interest rate that banks charge on…

A: A price ceiling is a mandate that the price charged on certain goods or products may not rise or…

Q: Discuss in detail about the Loan securitization as a tool for managing risks by banks. Discuss about…

A: Securitization : It is a risk management tool used to reduce an risk that is particular to some…

Q: The negotiable certificate of deposits issued by banks will lock in the following EXCEPT *…

A: A negotiable certificate of deposit often known as a jumbo CD, is a CD having a minimum face value…

Q: Which of the following bank services involves financial derivatives? Credit services O Transaction…

A: A derivative is an agreement between two or more parties in which the value is determined by an…

Q: Explain why Basel Rules require a maturity adjustment for corporate loans but not retail loans.

A: Retail loan is the loan which is provided through commercial bank or the certified financial…

Q: at is the relationship of Debt (Loans) to Borrowers to Financial Intermediaries?

A: The financial intermediaries are very important in the financial world and transactions and there…

Q: The actors of the monetary policy process includes the central bank, commercial banks, depositors,…

A: Monetary Policy: Monetary policy refers to the process of controlling the amount of money that is…

Q: What are some factors that financial managers consider whenchoosing the maturity structure of their…

A: The factors need to be considered by the manager when selecting the maturity structure for the debt…

Q: Methods/instruments that banks use to hedge the risks pertaining loans

A: Main function of a bank is to accept deposit and then offer loans as both individual and business…

Q: Why is it necessary for the bank to have the right to assign a mortgage to a third party (for…

A: Assignment of mortgage to a third party :  It is referred to as an agreement in loan obligations are…

Q: What is the difference between interest rate risk and default risk? How do combinations of terms in…

A: Interest rate risk is the risk of an investment due to changes in interest rate. When market rates…

Q: Do U.S. GAAP and IFRS differ in how bank overdrafts are treated? Explain.

A: Generally Accepted Accounting Principles:   GAAP (Generally Accepted Accounting Principles) is a…

Q: How does credit risk for a financial institution differs from default risk and What are the problems…

A: Lender loans money to the borrower, and there subsist as the risk of non-repayment of loan or…

Q: Discuss with examples why the money markets could be considered arguable as playing complementary…

A: The complementary role of Money Markets with banks is discussed as follows: The money market is a…

Q: What are nonconventional monetary tools used by central banks?

A: Monetary policy can be conventional and unconventional which are used by the central banks for…

Q: What’s the difference between a commercial bank and an investment bank?

A: A financial institution that provides services such as accepting the deposits and providing the loan…

Q: The creation of a new security by combining otherwise separate loan agreements is called O a)…

A: A loan agreement simply refers to the agreement between a lender and a borrower for a certain sum…

Q: . Accounts receivable financing is the term used to describe which of the following types of loans…

A: In Accounts receivable financing companies make a collateral of its account receivables to get loan…

Q: Differentiate between interest rate risk and default risk and explain how combinations of terms in…

A: A mortgage is a loan agreement between a bank and a borrower, in which a borrower borrows a specific…

Q: Which below is not one of the factors determining the mix of banks loan? *       a. Market size…

A: Factors determining the mix of bank loan portfolio: Bank size Customer size characteristics of the…

Q: Which of the following is the function of the financial market ? Select one :  a .  It decides the…

A: The financial system is the most important factor in economic transformation. Finance helps bridge…

Q: Explain the difference between the primary and secondary markets. What roles do banks play in these…

A: capital market of the financial system rises capital from shares, bonds, and other investments to…

Q: What are conventional monetary tools used by central banks?

A: The three conventional monetary policy tools which are used by the central banks are the discount…

Q: "Describe what a line of credit involves, and explain the legal obligation of a bank to provide…

A: Line of credit is the understanding between the banks and its customers that defines the maximum…

Q: Interbank borrowings are borrowings among banks are non-collateralized loans among banks are subject…

A: Every Bank is  required to hold an adequate amount of liquid assets, such as cash, to maintain its…

Q: what is the relationship between tne intrest rate and the bank prime loan rate

A: The prime rate (prime) and interest rate are both set by the Federal Reserve Bank (the Fed). In…

Functions of the Federal Reserve System

The Federal Reserve System looks after the financial activities and operations of the banking system. It is the apex body that has complete control over the banking regulations. All the guidelines regarding the banking system, money supply, and formulation of the monetary policy come under the purview of the Federal Reserve System. The New York Fed also helps in drafting the monetary policy and supervising the financial system.

Elastic and Inelastic Markets

Measuring the change in percentage of an economic variable with respect to change in a different economic variable is known as elasticity. This change in percentage results in a change in price concerning changes in other factors. In simple terms, when one factor brings a change to another factor, it is called elasticity.