Q: Explain why pre-payment risk is more likely when a mortgage is young than when the mortgage is…
A: Prepayment risk refers to the risk for the companies or the banks, if the loan takers repay the loan…
Q: systemic risk inhere mainly in the largest financial institution. true or false
A: systemic risk inhere mainly in the largest financial institution - False
Q: What is current yield?
A: Investments in the economy are important for the development, progress, and growth of economies…
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: what is the formula for the rate on long-term Treasury bonds?
A: Suppose:Amount paid for bond=$10,000Face value=$15,000Counpon rate=$2000
Q: What does a yield curve flattening mean for the expected future performance of the economy,…
A: In a market, yield curve depicts different Interest rate with different maturity but they provide…
Q: When the safe investments that pension funds usually rely on are paying less than 1 percent, then…
A: Pension funds are those funds that need to kept aside by the employer to be able to be given at the…
Q: As the MFI manager in one of the MFIs explain the measures you will put in place to ensure you don’t…
A: MFI institutions work for the upliftment of the poor section of society by providing financial…
Q: Have challenges faced by islamic banks changed over the last decade?
A: Despite the regulatory challenges that come with operating in a non-Muslim financial setting,…
Q: does increased correlations between two currencies affects a company's exposure? why?
A: Exchange rate:- An exchange rate determines the price where the currency would be exchanged for the…
Q: Why do bonds trade at prices different than par
A: Bond:- A bond is regarded as a definite-income asset because it pays bondholders a guaranteed return…
Q: Can we trust financial intermediaries?
A: In most cases, financial intermediates function as middlemen in transactions involving banks or…
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: Are capital flow management and macroprudential measures the same thing?
A: In a market, researchers and policymakers use different methods or approaches to analyze a specific…
Q: The most popular destinations of the sovereign wealth funds include the following countries: a. UK,…
A: Economics as a subject deals with the allocation of scarce resources among humans with unlimited…
Q: What are the applications of partial derivatives in economics?
A: The derivative of a function of a single variable that depicts quickness of change in function value…
Q: Define and give some examples of • inflation risk • diversifiable risk • non-diversifiable…
A: Inflation risk is when inflation will undermine an investment's returns through a decline in…
Q: Distinguish between Market and Inflation-Free Interest Rates?
A: The Market interest Rate, also called the nominal interest rate (i) is the rate which is not…
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: Q11. Which of the following is/are linked with the financial sector of India and controlled by the…
A: The financial sector consists of businesses and institutions that provide financial services to both…
Q: What is a credit default swap? Please explain it in your own words.
A: A credit default swap is a financial derivative that allows an investor to offset credit risk with…
Q: How the time based term effects interest rates and its yield curve?
A: A yield curve is a graph that compares the yields (interest rates) of bonds with similar credit…
Q: What is quantitative easing
A: In economics, quantitative easing refers to the part of the Central Bank's action when it decides to…
Q: What can emerging market countries do to strengthenprudential regulation and supervision of their…
A: The market of a growing country that gets further active with foreign markets as it expands is an…
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: How do public pension plans differ in other countries? Has privatization worked overseas?
A: The market value of final products and services produced within the economy within a certain time…
Q: What are the risks if banks are not supervised by the government thru Bangko Sentral ng Pilipinas?…
A: The primary purpose of the central bank of any economy is the regulation of the banking and…
Q: What does the risk structure of interest rates measure? Is the current structure of U.S. rates…
A: (Q) What does the risk structure of interest rates measure? Is the current structure of U.S. rates…
Q: What benefit do people get from the market forinsurance? What two problems impede the…
A: Future is uncertain and people dislike uncertainty that is the adverse risk. A rational response to…
Q: Dividends and pensions can provide liquidity to investors * True or False?
A: Dividends and pensions can provide liquidity to investors. - TRUE
Q: What is Interest Rate Risk and what is difference between Cash Flow Risk and Interest Rate Risk?
A: Interest rate refers to the amount of money that a lender will receive as an income or returns on…
Q: What do you understand by social security? What do you understand by the “pension crisis” and how…
A: Social security is the monetary form of assistance provided by the government for the public.It…
Q: If a government gains from unexpected inflation when it borrows, why would it choose to offer…
A: Government of a country generally chooses to offer indexed bonds when there are unexpected gains…
Q: What Is Financial Stability?
A: The economy includes all the activities that are performed in the economic system, including the…
Q: What are the examples of uses of derivatives in economics?
A: Meaning of Economics: The term economics refers to the situation under which there remain…
Q: elect 2 currency instruments and compare the advantages and disadvantages of them for the investor?
A: 1. Treasury bills Treasury bills are the short-term money market equilibrium that enables investors…
Q: Is Bitcoin legal tender anywhere in the world? Explain and cite your source?
A: Concept The digital money is a peer-to-peer system. Bitcoin first appeared in 2009, introduced the…
Q: In economic terms, what does quantitative easing actually do?
A: The goal of the monetary policy of the central bank is to control the amount of money in the…
Q: Explain how government gains from unexpected inflation when it borrows? If this is true, why would…
A: The unexpected inflation benefited the borrowers as the borrowers repay with the dollar that worth…
Q: What is quantitative easing? Who uses it? How and for what purpose? When has it been used in the…
A: Monetary policy refers to the credit-control system adopted by the monetary authority of a nation to…
What are the impacts of Inflation in risk management?
Step by step
Solved in 2 steps
- Why did the UK keep using quantitative easing in February 2021?(Pros and cons)Would you recommend the adoption of a system ofdeposit insurance, like the FDIC in the United States, ina country with weak institutions, prevalent corruption,and ineffective regulation of the financial sector?Investors must go for investments that are liquid to ensure availability of funds when needed. Is it true or false?
- What does the risk structure of interest rates measure? Is the current structure of U.S. rates consistent with your impressions of the health of the U.S economy and the corporate and housing sectors? Give specific examples.Match macroprudential instruments with the types of measures.Select 2 currency instruments and compare the advantages and disadvantages of them for the investor?