Questions from Financial Markets

Q: As a consultant to Boca Savings & Loan Association, you notice

As a consultant to Boca Savings & Loan Association, you notice that a large portion of 15-year, fixed-rate mortgages are financed with funds from short-term deposits. You believe the yield curve is us...

Q: As a manager of a finance company, you are attempting to

As a manager of a finance company, you are attempting to increase the spread between the rate earned on your assets and the rate paid on your liabilities. a. Assume that you expect interest rates dec...

Q: As an individual investor, you are attempting to invest in a

As an individual investor, you are attempting to invest in a well-diversified portfolio of mutual funds, so that you will be somewhat insulated from any type of economic shock that may occur. a. An i...

Q: Explain why financial markets may be less liquid if companies are not

Explain why financial markets may be less liquid if companies are not forced to provide accurate financial reports.

Q: As a consultant for a securities firm, you are assessing the

As a consultant for a securities firm, you are assessing the operations of a securities firm. a. This securities firm relies heavily on full-service brokerage commissions. Do you think that heavy rel...

Q: As a consultant to an insurance company, you have been asked

As a consultant to an insurance company, you have been asked to assess the asset composition of the company. a. The insurance company has recently sold a large amount of bonds and invested the procee...

Q: As a consultant to a state’s underfunded pension fund, you have

As a consultant to a state’s underfunded pension fund, you have been asked to search for solutions to prevent underfunding in the future. a. One explanation for the underfunding of the defined-benef...

Q: As a financial manager of a large firm, you plan to

As a financial manager of a large firm, you plan to borrow $70 million over the next year. a. What are the more likely alternatives for you to borrow $70 million? b. Assuming that you decide to issue...

Q: As a manager of a large U.S. firm,

As a manager of a large U.S. firm, one of your assignments is to monitor U.S. economic conditions so that you can forecast the demand for products sold by your firm. You realize that the Federal Rese...

Q: As a manager of a firm, you are concerned about a

As a manager of a firm, you are concerned about a potential increase in interest rates, which would reduce the demand for your firm’s products. The Fed is scheduled to meet in one week to assess the e...