Which of the following financial instruments generally provides the largest source of short-term financing for small firms? Select the correct response: mortgage bonds installment loans trade credits commercial paper
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- QUESTION #4 the following “T-accounts” with the following data $100 million in mortgage-backed securities (MBS) $200 million demand deposits $20 million in reserves held by banks $100 million in Treasury securities held by banks $50 million in Treasury securities held by the Fed $5 million in overnight borrowing by banks from the Fed Suppose that the Fed wants to lower long-term interest rates and buys all the Treasury securities banks hold. Reflect those changes on the balance sheet (commitment to low long term interest rate environment, QE) and highlight in turquoise Households Banks Federal Reserve Firms ___A_______L___ ___A_______L___ ___A_____L___ ___A_____L___21. Which of the following is a source of short-term financing? Group of answer choices Issue Long Term Bonds Issue New Stock Factoring Accounts Receivable50- Which of the following are issued by large commercial banks that can be bought and sold among investors and carry a fixed interest rate? a. Eurodollar CD b. Certificate of Deposits c. Treasury Bills d. Commercial Papers
- 8. According to the Loanable funds' theory, how are interest rates determined?9. Compare and contrast three different money market securities in terms of issuer, return, risk and tradability/liquidity.10. Explain the role of non-depository financial institutions within the financial sector? Discuss the core functions of any three of these institutions.Which of the following is NOT a form of long-term debt financing? Question 12 options: 1) Bond issue. 2) Bank term loans. 3) Accounts Payable. 4) Leasing.What is the SUBPRIME crisis What is a SUBPRIME credit How the Subprime crisis has been transferred to the financial system and the markets What a lesson the fall of Lehman leaves. Establish 05 conclusions about the case and compare it with the economic crisis of the covid
- answer i and ii. show workings and formulas A Ltd, a low rated firm desires a fixed rate, long term loan. It currently hasaccess to floating interest rate funds at a margin of 1.5% over the Prime Rate.Its direct borrowing cost is 13% in the fixed rate bond market. B Ltd whichprefers a floating rate loan has access to fixed rate funds in cedi-bond marketat 11% and floating rate funds at Prime Rate + ½%.You are required:(i) To explain how A Ltd and B Ltd can use swap to their advantage. (ii) Calculate how much Asaba Ltd would pay for its fixed rate funds18. Which of the following statements are true?Statement I. An interest rate reflects the rate of return that a creditor receives when lending money, or the rate that a borrower pays when borrowing money. Interest rates change over time, so does the rate earned by creditors who provide loans or the rate paid by borrowers who obtain loans. Statement II. Interest rate movements have a direct influence on the market values of debt securities, such as money market securities, bonds, and mortgages. Statement III. Interest rate movements have an indirect influence on equity security values because they can affect the return by investors who invest in equity securities. Statement IV. Since interest rates have an influence on securities, participants in financial markets attempt to anticipate interest rate movements when restructuring their investment or loan positions. a. I,II,III b. I,II,IV c. I,III,IV d. I,II,III,IVQuestion Consider the following balance sheet positions for a financial institution:• Rate-sensitive assets = $120 million; Rate-sensitive liabilities = $180 million.• Rate-sensitive assets = $230 million; Rate-sensitive liabilities = $200 million.a) Calculate the repricing gap and the impact on net interest income of a 2 percent increase in interest rates for each position. b) Calculate the repricing gap and the impact on net interest income of a 2 percent decrease in interest rates for each position.c) Explain the type of risk this FI is exposed to in each position.
- Question Consider the following balance sheet positions for a financial institution:• Rate-sensitive assets = $120 million; Rate-sensitive liabilities = $180 million.• Rate-sensitive assets = $230 million; Rate-sensitive liabilities = $200 million.a) Calculate the repricing gap and the impact on net interest income of a 2 percent increase in interest rates for each position. b) Calculate the repricing gap and the impact on net interest income of a 2 percent decrease in interest rates for each position.c) Explain the type of risk this FI is exposed to in each position. Kindly explain in detail14) Commercial banks grant short-term finance to business firms which is known as __________. a. Institutional credit b. Personal credit c. All d. Bank creditSuppose that the assets of a bank consist of $100 million of loans of BBB-rated corporations. The PD for the corporations is estimated as 1%. The average maturity is five years and the LGD is 60%. What is the total risk-weighted assets for credit risk under the Basel II advanced IRB approach? Question 5Answer a. $178.1 million b. $13.2 million c. $165.4 million d. $100 million