Questions from Financial Markets

Q: Explain why financial institutions are highly exposed to systemic risk during a

Explain why financial institutions are highly exposed to systemic risk during a financial crisis.

Q: Explain the guidelines for credit rating agencies That resulted from the Financial

Explain the guidelines for credit rating agencies That resulted from the Financial Reform Act of 2010.

Q: Explain the conditions that led to the debt crisis in Greece.

Explain the conditions that led to the debt crisis in Greece.

Q: Explain how the downgrading of bonds for a particular corporation affects the

Explain how the downgrading of bonds for a particular corporation affects the prices of those bonds, the return to investors who currently hold these bonds, and the potential return to other investors...

Q: What are the advantages and disadvantages to a firm that issues low

What are the advantages and disadvantages to a firm that issues low- or zero-coupon bonds?

Q: Are variable-rate bonds attractive to investors who expect interest rates

Are variable-rate bonds attractive to investors who expect interest rates to decrease? Explain. Would a firm that needs to borrow funds consider issuing variable-rate bonds if it expects interest rate...

Q: Why can convertible bonds be issued by firms at a higher price

Why can convertible bonds be issued by firms at a higher price than other bonds?

Q: Explain the concept of bond price elasticity. Would bond price elasticity

Explain the concept of bond price elasticity. Would bond price elasticity suggest a higher price sensitivity for zero-coupon bonds or high-coupon bonds that are offering the same yield to maturity? Wh...

Q: An analyst recently suggested that there will be a major economic expansion

An analyst recently suggested that there will be a major economic expansion that will favorably affect the prices of high-rated fixed-rate bonds, because the credit risk of bonds will decline as corpo...

Q: When tensions rise or war erupts in the Middle East, bond

When tensions rise or war erupts in the Middle East, bond prices in many countries tend to decline. What is the link between problems in the Middle East and bond prices? Would you expect bond prices t...