International Financial Management
14th Edition
ISBN: 9780357130698
Author: Madura
Publisher: Cengage
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Doubtful debts are those debts which is unlikely to be able to collect, bank hiring a collection agency use to recover funds or collecting delinquent debts. Banking primary focus is running business, but a collection agency's primary focus is to collect debts. Therefore, examine the advantages and disadvantages in appointing a third party in collecting bad debt in Malaysia.
(Urgent) Credit Analysis & Lending Management
Doubtful debts are those debts which is unlikely to be able to collect, bank hiring a collection agency use to recover funds or collecting delinquent debts. Banking primary focus is running business, but a collection agency's primary focus is to collect debts. Therefore, examine the advantages and disadvantages in appointing a third party in collecting bad debt in Malaysia.
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Suppose Mr. Ahmad and Mr. Akram are the current and saving account holders in an Islamic bank, respectively. Mr. Ahmad andMr. Akram have made payments to their vendors against credit sale through checks and they also made a gratuitous payment totheir relatives through checks separately. Please answer following considering scenario:II. Explain whether the transactions made by Mr. Ahmad and Mr. Akram are based on Hawalah. Please also specify theform of Hawalah in each situation, if any.
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Bank Muscat advances secured and unsecured loans to their customers. If Bank Muscat is issuing secured loans, identify which one of the following is the reason for bank to issue secured loan?
a.
To increase interest on loans by the banks
b.
To sell the collateral in the event of non-refund of the loan
c.
To have long standing relationship with customer
d.
To reduce the loan amount and time period
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A commercial bank in Barbados faces serious liquidity problems; however, they have an asset that has the required value to meet their debt obligations. However, due to poor economic conditions, they may not get a buyer in time to purchase such an asset at their preferred price, so they may end up losing money for selling that asset lower than their preferred price, or if they choose not to sell the asset, they will not be able to meet their financial obligation. Which of the following strategy is best suited to manage the bank’s liquidity risk?
Select one:
a.
Interest rate swaps
b.
Stress Tests
c.
Diversifying
d.
Hedging
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Please contemplate the following scenarios and answer accordingly.a. Islamic banking has entered into Murabaha transaction with Mr. Daghabaaz. Mr. Daghabaaz defaulted on payments of installment later and IB charged accordingly provision as per the aging of receivable. However, Mr. Daghabaaz contacted bank to request a rollover on said transaction to avoid blacklisting.Requirement: As an Islamic Banker, do you think IB can charge any penalty for late payment to Daghabaaz and grant rollover facility.
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Explain why some financial institutions prefer to provide credit in financial markets outside their own country
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A Letter of Credit (LC) is a document that guarantees the buyer's payment to the sellers. It is issued by a bank and ensures timely and full payment to the seller. If the buyer is unable to make such a payment, the bank covers the full or the remaining amount on behalf of the buyer.
Why would the bank pay the remaining amount on behalf of the buyer, and what would be the risk exposed to the bank? Please explain thoroughly.
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1. Why don’t the additions and deductions from the bank balance on a bank reconciliation require adjustment by the company?
2. Do all transactions by U.S. companies with foreign parties require special accounting procedures by the U.S. companies? Explain.
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Which of the following is not a way in which banks lend short-term unsecured loans?
a. Through a guaranteed credit line that has a commitment fee for any unused amount for the year
b. Through credits cards lines with a certain credit limit
c. By sending the amount earned from trust and investment products offered by the bank
d. By lending a single date maturity loan to a debtor
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Researching GAAP Situation Hamilton Company operates in an industry with numerous competitors. It is experiencing a shortage of cash and decides to obtain money from a large bank by using some of its receivables as collateral. Hamilton pledges 5100,000 of its receivables, is charged a 12% fee on this amount, and notifies these credit customers to make their payments directly to the bank. Hamilton transfers the receivables to the bank, and the bank assumes the servicing activities, but Hamilton is responsible for all bad debts which it reasonably estimates to be 2% of the receivables amount. When the balance of the receivables pledged is reduced to 3,000, Hamilton is required to repurchase the receivables, notify the remaining credit customers to make payments to it, and reassume the servicing activities. The bank has the right to sell the receivables, except to Hamiltons major competitor. Hamiltons president has asked you how to account for (and record) this transaction. Directions Research the related generally accepted accounting principles and prepare a short memo to the president that answers his question. Cite your reference and applicable paragraph numbers.
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Private mortgage insurance is used to
a.
to ensure timely payments of escrow, taxes, and other fixed charges.
b.
reduce the default risk to lenders
c.
protect borrowers if they cannot make periodic payments
d.
in lieu of a bond for termites
Covenants in loan agreements are used to
a.
make representations in agreements
b.
secure collateral
c.
control the borrower’s behaviour
d.
as guaranties
The Barbados branch of a foreign bank has a ROE that is three times greater than the TT branch. What may be the reason for this difference?
a.
The Barbados branch has lower equity
b.
The Barbados branch is more profitable than the TT branch
c.
The Barbados branch has proportionately higher profits to equity
d.
The TT branch has higher equity
Assume a single-payment $1,000 loan for one year at 16 percent. The APR is
a.
24 percent
b.
16 percent
c.
none of the above
d.
32 percent
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Does India have the Shadow-banking system? Explain in your own words, no plagiarism.
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