Questions from Financial Markets

Q: In some countries where there is high inflation, the annual interest

In some countries where there is high inflation, the annual interest rate is more than 50 percent, while in other countries such as the U.S. and many European countries, the annual interest rates are...

Q: Explain how the credit crisis in the 2008-2009 period affected

Explain how the credit crisis in the 2008-2009 period affected some savings institutions. Compare the causes of the credit crisis to the causes of the savings institution crisis in the late 1980s.

Q: Explain why savings institutions may benefit when interest rates fall.

Explain why savings institutions may benefit when interest rates fall.

Q: Discuss the entrance of savings institutions into consumer and commercial lending.

Discuss the entrance of savings institutions into consumer and commercial lending. What are the potential risks and rewards of this strategy? Discuss the conflict between diversification and specializ...

Q: Describe the liquidity and credit risk of savings institutions and discuss how

Describe the liquidity and credit risk of savings institutions and discuss how each is managed.

Q: What is an adjustable-rate mortgage (ARM)? Discuss the

What is an adjustable-rate mortgage (ARM)? Discuss the potential advantages that such mortgages offer a savings institution.

Q: Explain how savings institutions could use interest rate swaps to reduce interest

Explain how savings institutions could use interest rate swaps to reduce interest rate risk. Will savings institutions that use swaps perform better or worse than those that were unhedged during a per...

Q: How are small and medium-sized finance companies able to issue

How are small and medium-sized finance companies able to issue commercial paper? Why do some well-known finance companies directly place their commercial paper?

Q: Explain how the liquidity position of finance companies differs from that of

Explain how the liquidity position of finance companies differs from that of depository institutions such as commercial banks.

Q: Explain why mutual funds are attractive to small investors. How can

Explain why mutual funds are attractive to small investors. How can mutual funds generate returns to their shareholders?