Asymmetric Information and Credit-Rating Agencies
What economies can be defined as “Emerging market economies”
Emerging market economies - which opened their markets to the outside world in the 1990s with high hopes of rapid economic growth and reduced poverty.
- economies in an early stage of market development that have recently opened up to the flow of goods, services, and capital from the rest of the world
Suppose in 2017 you bought a bond for $80. In 2018, the bond made a coupon payment of $5 and the price rose to $85. Plugging these numbers into the formula, the rate of return is: 0,125
Select the correct factors that contributed to the Initial stage of Financial Crises in Emerging Market Economies:
Indicate the benefits of Securitization:
What is Moral Hazard?
Find the correct statement of the Liquidity Preference theory:
Can “Hostile takeover” by private equity firm reduce Information Asymmetries?
Indicate the correct explanation of Principal-agent problem:
Which of the following explains the criteria of loan (credit) that help loan officials to make a decision in granting loans?
Find the true example for Capital outflow:
Find the true relationship between interest rates on bonds and default risk.
Find the true definition of Adverse selection:
Indicate the correct listing of types of banks:
Find the correct explanation of Nominal rate:
Select the correct factors that contributed to the Initial stage of Financial Crises in Emerging Market Economies:
Find the true explanation of loan criteria “Capacity”:
Indicate the correct parts of loan payment:
Indicate the incorrect method to reduce Information Asymmetries
Select the best explanation of Letter of credit:
What is the difference between direct finance and indirect finance in terms of flow of funds?
According to the Liquidity preference theory, Equilibrium interest rate is:
What is a merger in banking?
Indicate the incorrect forms of Off-balance sheet activities:
Indicate the false statement about Credit Unions:
What does Too big to fail (TBTF) doctrine state?
Suppose in 2017 you bought a bond for $80. In 2018, the bond made a coupon payment of $5 and the price rose to $85. Plugging these numbers into the formula, the rate of return is:
Indicate the correct definition of Municipal bond:
Chose the correct answer that lists potential ways to increase wealth from buying securities:
In the second stage of Financial Crises in Emerging Market Economies, what triggered Currency crisis?
Deterioration of Bank Balance Sheets Triggers Currency Crises: (Defending their currencies by raising interest rates should encourage capital inflows, but if the government raises interest rates, banks must pay more to obtain funds. This increase in costs decreases bank profitability, which may lead to insolvency.)
Severe Fiscal Imbalances Trigger Currency Crises: (When government budget deficits spin out of control, foreign and domestic investors begin to suspect that the country may not be able to pay back its government debt and so will start pulling money out of the country and selling the domestic currency. The fiscal situation is out of control thus results in a speculative attack against the currency,)
What was the most actual reason for Argentina’s financial crisis?
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