Questions from Financial Markets


Q: Select a commercial bank whose income statement data are available. Using

Select a commercial bank whose income statement data are available. Using recent income statement data about that bank, assess its performance. How does the performance of this bank compare to the per...

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Q: A money market security that has a par value of $10

A money market security that has a par value of $10,000 sells for $8,816.60. Given that the security has a maturity of two years, what is the investor’s required rate of return?

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Q: Determine how the after-tax yield from investing in a corporate

Determine how the after-tax yield from investing in a corporate bond is affected by higher tax rates, holding the before-tax yield constant. Explain the logic of this relationship.

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Q: Assume an investor purchased a six-month T-bill with

Assume an investor purchased a six-month T-bill with a $10,000 par value for $9,000 and sold it ninety days later for $9,100. What is the yield?

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Q: Why are bank regulators more concerned about a large bank failure than

Why are bank regulators more concerned about a large bank failure than a small bank failure?

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Q: Explain why regulators might argue that the assistance they provided to Bear

Explain why regulators might argue that the assistance they provided to Bear Stearns during the credit crisis was necessary.

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Q: Why were bank regulators concerned with credit default swaps?

Why were bank regulators concerned with credit default swaps?

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Q: Explain why the credit crisis caused concerns about systemic risk.

Explain why the credit crisis caused concerns about systemic risk.

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Q: Explain why the moral hazard problem may have received so much attention

Explain why the moral hazard problem may have received so much attention during the credit crisis.

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Q: Explain how systemic risk is related to the commercial paper market.

Explain how systemic risk is related to the commercial paper market. That is, why did problems in the market for mortgage-backed securities affect the commercial paper market?

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