Questions from Financial Markets


Q: A convertible bond allows for a bond to be converted into what

A convertible bond allows for a bond to be converted into what at a future date?

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Q: Initially, bond ratings were paid for by the bond purchaser.

Initially, bond ratings were paid for by the bond purchaser. Today bonding ratings are under an “issuer pays” model. Explain how the two forms are different.

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Q: Explain why some argue the “issuer pays” model creates a

Explain why some argue the “issuer pays” model creates a conflict of interest.

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Q: Which of the following correctly describes the role of the bond-

Which of the following correctly describes the role of the bond-rating agencies in the subprime mortgage asset bubble?

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Q: Explain, in words and graphically, how private borrowers such as

Explain, in words and graphically, how private borrowers such as Harley-Davidson are negatively affected by a flight to quality.

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Q: Explain, in words and graphically, how the financial crisis that

Explain, in words and graphically, how the financial crisis that started in the United States led to a worldwide flight to quality.

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Q: During times of crises, funds can flow from long-term

During times of crises, funds can flow from long-term debt markets to shorter term debt markets. This is often referred to as a:

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Q: Explain why the money market is really not “a market for

Explain why the money market is really not “a market for money.”

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Q: Johanna is an institutional investor who is looking to “park”

Johanna is an institutional investor who is looking to “park” some of her investment funds for a short time. How would you explain to Johanna why money market instruments might be useful for her?

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Q: Which of the following is not a characteristic of money market instruments

Which of the following is not a characteristic of money market instruments?

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