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A: ANSWER Global financial market are becoming the increaingly connected with more linkage and…
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Many politicians are seeking to eliminate the Dodd-Frank Act, while others seek to strengthen it. On which side are you, and why?
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- What has happened to the profitability of financial firms in the US economy in recent decades? Why have they been able to increase their profits? Is this a good thing for the US economy as a whole?Explain why the 2010 Obama Wall Street Reform Act was considered the most extensive overhaul of the US financial system since the Great Depression? What was the logic and need for this law? Explain in detail.Question 1 Briefly explain how the adverse selection problem can affect the financial markets. Explain how financial intermediaries can help to solve the adverse selection problem in stock and bond investments
- The bank wants to sell more shares of stock, keep more of its earnings, buy more Treasury securities, and give fewer business loans. Regulators have always given it a good rating, but this financial institution thinks that by using these strategies, regulators will give it an even better rating. Explain in detail why you think the plans of the financial institution will make both regulators and shareholders happy.The National Pension Fund pays no taxes on its capital gains or on its dividend and interest income. Would it be illogical for it to have low-dividend, high growth stocks in its portfolio? Would it be illogical to have government bonds (which are safe but offer a low interest) in its portfolio?Explain what led to the Great Financial Crisis of 2007 and why the government felt it had to ‘bail out the bankers’.
- Explain why financial markets are increasingly becoming global.What is leverage, and why is it so important in understanding the financial crisis?How did the stock market boom led to the Housing bubble and the 2008 Financial Crises? Draw three parallels between the 2008 Financial Crisis and the 2020 Pandemic Recession If the risk associated with a company goes up, what would you expect to happen to the price of its stock? And if the risk associated with a company declines, what would you expect to happen to the price of its stock?
- What are the seven major financial institutions?Why are financial intermediaries the most heavily regulated businesses in the economy? Explain why stock market is an important factor in business investment decisions? What is inflation? What explains inflation? If there is a recession, will it be more difficult to find a job when you graduate? Explain. What are the six types of regulations the government employs in an attempt to ensure the soundness of our financial intermediaries? Explain. Explain the difference between debt and equity markets. primary and secondary markets, exchange and over the counter markets and money and capital markets. What is the difference between foreign bond and a Eurobond? Which institutions are subject to Federal Deposit Insurance corporation (FDIC) regulations, and what is the nature of the regulations? What are the reasons for high transaction costs to exist in a barter economy? What separates the assets included in M1 from the assets included in M2? Does it matter what definition of money policy…Please, I need help with number 1, 2, 3, 4 1. Assume that there are two assets in the world, stocks and bonds. If both sell at the same price, and if stocks are twice as risky as bonds, we should expect that the a. Stocks will not sell. b. Rate of return on stocks will be twice the rate of return on bonds c. Rate of return on bonds will be twice the rate of return on stocks d. Rate of return on bonds will be higher than stocks, by an indeterminate amount 2. Which of the following describes the relationship between stock and bond prices and interest rates? a. There is a direct and positive relationship between the rate of interest and stock and bond prices. (As interest go up, stock and bond prices rise as well.) b. The relationship is far too difficult to quantify. c. There is an inverse relationship between interest rates and the price of a stock or a bond. (As interest rates go up, stock and bond prices decline.) d. It varies with the performance of the stock or bond market. 3.…