Questions from Financial Markets

Q: Would the bank’s ROA likely be higher or lower over the next

Would the bank’s ROA likely be higher or lower over the next year if it allocates the extra funds to small business loans?

Q: The Fed uses a targeted federal funds rate when implementing monetary policy

The Fed uses a targeted federal funds rate when implementing monetary policy. However, the Fed's main purpose in its monetary policy is typically to have an impact on the aggregate demand for products...

Q: What is the obvious risk of such a strategy beyond the next

What is the obvious risk of such a strategy beyond the next year?

Q: As a portfolio manager of a financial institution, you are invited

As a portfolio manager of a financial institution, you are invited to numerous road shows at which firms that are going public promote themselves, and the lead underwriter invites you to invest in the...

Q: As a portfolio manager, you commonly take short positions in stocks

As a portfolio manager, you commonly take short positions in stocks that have a high short interest margin. What is the advantage of focusing on these types of firms? What is a possible disadvantage?...

Q: As an analyst at a bond rating agency, you have been

As an analyst at a bond rating agency, you have been asked to interpret the implications of the recent shift in the yield curve. Six months ago, the yield curve exhibited a slight downward slope. Over...

Q: As an analyst at a bond rating agency, you have been

As an analyst at a bond rating agency, you have been asked to interpret the implications of the recent shift in the yield curve. Six months ago, the yield curve exhibited a slight downward slope. Over...

Q: Over the last year, Calzone Corporation paid a quarterly dividend of

Over the last year, Calzone Corporation paid a quarterly dividend of $0.10 in each of the four quarters. The current stock price of Calzone Corporation is $39.78. What is the dividend yield for Calzon...

Q: Suppose the real interest rate is 6 percent and the expected inflation

Suppose the real interest rate is 6 percent and the expected inflation is 2 percent. What would you expect the nominal rate of interest to be?

Q: Phil purchased an NCD a year ago in the secondary market for

Phil purchased an NCD a year ago in the secondary market for $980,000. The NCD matures today at a price of $1,000,000, and Phil received $45,000 in interest. What is Phil’s return on the NCD?