All Matches

Solution Library

Expert Answer

Textbooks

Search Textbook questions, tutors and Books

Oops, something went wrong!

Change your search query and then try again

Result Not Found

Books FREE
Tutors
Study Help
Ask a Question

Search
Sign In
Register

study help
business
money banking financial markets

Questions and Answers of Money Banking Financial Markets

Why does a financial crisis typically result in a recession?
Go to the web site of the Federal Reserve Bank of St. Louis (FRED) (fred.stlouisfed.org) and download and graph the data series for the unemployment rate (UNRATE) from January 1948 until the most
How is being a lender of last resort connected to the too-big-to-fail policy?
What does it mean to say that there is a bubble in the housing market? Briefly describe the effect that the bursting of the housing bubble in 2006 had on the U.S. economy.
What role did the bank panics of the early 1930s play in explaining the severity of the Great Depression?
Many investment banks practice an “up or out” policy, with new hires being either fired or promoted within a few years. Many large law firms and accounting firms use a similar policy, as do
Private medical insurance companies sell policies that allow policyholders to make premium payments in exchange for the insurance company paying some or all of the policyholders’ medical bills. An
An editorial in the Wall Street Journal argues that: “there’s no evidence that [repealing the Glass-Steagall Act in 1999] had anything to do with the [2007–2009 financial] crisis.” Briefly
Ben Bernanke served as chairman of the Federal Reserve during the financial crisis of 2007–2009. In his account of those years, he observed:Seen from the vantage point of early 2007, the
According to an article in the Wall Street Journal:“Life insurers earn much of their profit by investing customers’ premiums in bonds until claims come due. They have typically favored
A publication of the Securities and Exchange Commission (SEC) notes that to invest in a hedge fund, “you generally must be an accredited investor.”a. What is an accredited investor?b. The
An article in the New York Times observes that “the Glass-Steagall Act … forced the separation of investment banking from commercial banking” and “Glass-Steagall aimed to protect the common
In March 2008, the U.S. Treasury and the Federal Reserve arranged for the sale of the Bear Stearns investment bank to JPMorgan Chase in order to prevent Bear Stearns from having to declare
In 2016, some industry analysts believed that automobile sales had reached a peak and might begin to decline. JPMorgan Chase CEO Jamie Dimon was quoted in an article in the Wall Street Journal as
Go to the web site of the Federal Reserve Bank of St. Louis (FRED) (fred.stlouisfed.org) and download and graph the data series for the value of mutual fund shares owned by households (MFSABSHNO)
According to an article in the Wall Street Journal:“Jorge Rodriguez, owner of a Peruvian restaurant in Los Angeles, said Wells Fargo & Co.—his bank for several years—turned him down …
An article in the Wall Street Journal in 2016 notes that in explaining the low stock price of the Citigroup bank: “Investors … have only to look to the bank’s return on equity. That was just 7%
Suppose that insurance companies in Ohio are reluctant to offer fire insurance to firms in lowincome neighborhoods because of the prevalence of arson fires in those neighborhoods. Suppose that the
In describing the work of hedge funds, financial journalist Sebastian Mallaby has observed: [Research] showed that the unglamorous “value” stocks were underpriced relative to overhyped
What incentives would the partners in an investment bank have to convert the firm into a public corporation? If becoming a public corporation increases the risk in investment banking, how do publicly
An article by an economist at the International Monetary Fund about the shadow banking system notes:As long as investors understand what is going on and such activities do not pose undue risk to the
In 2016, the long-run returns to the investments made by public pension funds fell to their lowest levels in many years and were expected to fall further as long-run interest rates remained low. One
An article in the Wall Street Journal notes: “Hedge funds typically charge higher fees than other money managers.”a. What is a hedge fund?b. What fees do hedge funds typically charge? How do
Suppose that you intend to buy a house for $200,000. Calculate your leverage for this investment in each of the following situations:a. You pay the entire $200,000 price in cash.b. You make a 20%
In an account of the financial crisis, Roger Lowenstein described the problems affecting the Merrill Lynch investment bank: “too much leverage, too much relying on short-term [borrowing], and
With 401(k) retirement plans, both the employer and the employee make contributions that are then invested, typically in mutual funds. A column in the Wall Street Journal describing these plans
In referring to the collapse of the Long-Term Capital Management hedge fund in 1998, an article in the New York Times noted: Starting with just $5 billion in capital, the fund was able to get $125
As noted in the chapter, in 2016, new regulations meant that prime money market funds would have to price shares in a fund purchased by institutional investors at the fund’s net asset value (NAV)
A 2016 column in the New York Times notes that: “about two decades ago … employers began replacing traditional [pension] plans with ‘defined contribution’ plans like 401(k)’s.”a. What are
David Wessel of the Brookings Institution has described what happened with the Reserve Primary Fund, a money market mutual fund, on September 16, 2008:At 4:15 p.m., the fund issued a press release.
An article in the Wall Street Journal describes the following financial deal: “Private-equity firm KKR & Co. sold 15 million shares of Walgreens Boots Alliance Inc. to Citigroup Inc…. The
During the financial crisis of 2007–2009, the U.S. Treasury implemented the Guarantee Program for Money Market Funds, which insured investors against losses on their existing money market mutual
Suppose that as an employee of a large firm, you are given the choice between a defined benefit pension plan and a defined contribution pension plan. From your point of view, what are the advantages
How are banks able to attract small savers if small savers can usually receive a higher interest rate from money market mutual funds than from bank savings accounts?
A review of a biography of the British investment banker Siegmund Warburg states that Warburg believed: Investment banking should not be about gambling but about … financial intermediation built on
In what ways are insurance companies financial intermediaries? What is the difference between a life insurance company and a property and casualty insurance company?
How are finance companies able to compete against commercial banks?
What is leverage? Which were more highly leveraged prior to the financial crisis of 2007–2009: commercial banks or investment banks? Briefly explain why. What became of the large, standalone
Why have runs on commercial banks become rare, while several shadow banking firms experienced runs during the financial crisis?
What is the difference between a defined contribution pension plan and a defined benefit plan? What benefits do employees receive from saving for retirement using 401(k) plans?
What is the difference between retail funding and wholesale funding? Which type of funding do commercial banks mainly rely on? Which type of funding do investment banks mainly rely on?
Go to the web site of the Federal Reserve Bank of St. Louis (FRED) (fred.stlouisfed.org) and download and graph the data series for Retail Money Funds (WRMFSL) and for Institutional Money Funds
In what ways does the shadow banking system differ from the commercial banking system?
In what ways are contractual savings institutions similar to commercial banks? In what ways are they different?
In what ways are investment institutions similar to commercial banks? In what ways are they different?
What are the key differences between investment banks and commercial banks?
A bank executive was quoted as arguing: “TARP successfully stabilized not only the banking industry but a number of other industries as well.” Why might stabilizing the banking industry have
Suppose that you are considering investing in a bank that is earning a higher ROE than most other banks. You learn that the bank has $300 million in capital and $5 billion in assets. Would you become
The Capital Purchase Program carried out under TARP represented an attempt by the federal government to increase the capital of banks. Why would the federal government consider it important to
According to an article in the Wall Street Journal, in 2016, JPMorgan Chase’s leverage ratio was 6.2%. The bank’s return on equity (ROE) was 9%. Calculate the bank’s ROA.
The following entries (in millions of dollars) are from the balance sheet of Rivendell National Bank (RNB):U.S. Treasury bills .......................................$20Demand deposits
At one time, Congress was considering having the federal government set up a “lending fund” for small banks. The U.S. Treasury would lend the funds to banks. The more of the funds the banks
A history of deposit insurance on the web site of the FDIC notes: “Some have argued at different points in time that there have been too few bank failures because of deposit insurance, that it
A Congresswoman introduces a bill to outlaw credit rationing by banks. The bill would require that every applicant be granted a loan, no matter how high the risk that the applicant will not pay back
Suppose that First National Bank has $200 million in assets and $20 million in equity capital.a. If First National has a 2% ROA, what is its ROE?b. Suppose that First National’s equity capital
The following entries (in millions of dollars) are from the balance sheet of Rivendell National Bank (RNB):U.S. Treasury bills ......................................$20Demand deposits
Evaluate the following statement:The United States has more than 5,000 banks, while Canada has only a few. Therefore, the U.S. banking industry must be more competitive than the Canadian banking
According to an opinion column in the Wall Street Journal: “Former Google staffers founded the online lender Upstart, which [makes loans] based on [a borrower’s] grade-point average, SAT score,
Suppose that the value of a bank’s assets is $40 billion and the value of its liabilities is $36 billion. If the bank has a 2% ROA, then what is its ROE?
An article in the Wall Street Journal in 2016 discusses proposals by the Federal Reserve for new regulations that would affect banks’ “long-term lending such as aircraft, shipping and project
When and why was TARP created?
Briefly explain whether you agree with each of the following statements: a. “A bank that expects interest rates to increase in the future will want to hold more ratesensitive
Go to the web site of the Federal Reserve Bank of St. Louis (FRED) (fred.stlouisfed.org) and download and graph the data series for the net worth of households (TNWBSHNO) from the first quarter of
Suppose that National Bank of Guerneville (NBG) has $34 million in checkable deposits, Commonwealth Bank has $47 million in checkable deposits, and the required reserve ratio for checkable deposits
What are the key developments in electronic banking?
Does the existence of reserve requirements make it easier for banks to deal with bank runs? Briefly explain.
In 1960, federal regulations prohibited banks from paying interest on checking accounts. Banks are now legally allowed to pay interest on checking accounts, yet the value of checking accounts has
Suppose that Lena, who has an account at Sun-Trust Bank, writes a check for $100 to José, who has an account at National City Bank. Use Taccounts to show how the balance sheets of each bank will be
If commercial banks were allowed to purchase significant amounts of stock in the companies to which they make loans, would this change increase or decrease the extent of moral hazard in the financial
List four off-balance-sheet activities and briefly explain what they are.
Before 1933, there was no federal deposit insurance. Was the liquidity risk faced by banks during those years likely to have been larger or smaller than it is today? Briefly explain.
Suppose that Bank of America sells $10 million in Treasury bills to PNC Bank. Use T-accounts to show the effect of this transaction on the balance sheet of each bank.
How have the types of loans banks make changed over time?
Go to the web site of the Federal Reserve Bank of St. Louis (FRED) (fred.stlouisfed.org) and download and graph the data series for Banks (FREQ) from 1988 until the most recent quarter available. Go
Why did nationwide banking come relatively late to the United States compared with other countries?
What is the difference between gap analysis and duration analysis? What is the purpose of gap analysis, and what is the purpose of duration analysis?
What does it mean to describe a bank as “highly leveraged”? Why might the managers of a bank want the bank to be highly leveraged? Why might the bank’s shareholders want the bank to be less
According to this chapter: “We can think of a bank’s liabilities as the sources of its funds, and we can think of a bank’s assets as the uses of its funds.” Briefly explain what this
Go to the web site of the Federal Reserve Bank of St. Louis (FRED) (fred.stlouisfed.org) and download and graph the data series for Nonperforming Total Loans (NPTLTL) from January 1988 until the most
Why was the FDIC established?
What is a credit report? What is a credit score?
What is the difference between a bank’s return on assets (ROA) and its return on equity (ROE)? How are they related?
Write the key accounting equation on which balance sheets are based. What are the most important bank assets? What are the most important bank liabilities?
Go to the web site of the Federal Reserve Bank of St. Louis (FRED) (fred.stlouisfed.org) and download and graph the data series for the Net Interest Margin for All U.S. Banks (USNIM) from 1984 until
Why is the United States said to have a dual banking system?
Discuss the steps banks take to manage liquidity risk, credit risk, and interest-rate risk.
Use a T-account to show the effect on Bank of America’s balance sheet of your depositing $50 in currency in your checking account.
LendingClub, one of the largest fintech firms, attempts to match lenders and borrowers. Unlike some other fintech firms, LendingClub securitizes some of the loans it makes and sells them to
Aaron Levie, one of the founders of the Internet file-sharing site Box, Inc. explained the difficulty the firm had in raising funds from investors: “Investors had a hard time investing in a company
A reader wrote to an advice column in the New York Times, complaining that his insurance company had canceled his homeowner’s policy after he had filed two claims. The advice columnist
Commercial real estate loans are mortgages that use apartment buildings, office buildings, or other commercial real estate as collateral.An article in the New York Times discussing the securitization
A 2016 article in the Wall Street Journal observes: “ Equity crowdfunding promises to be a major new source of funding for small businesses.”a. What is equity crowdfunding, and what happened in
An article in the Economist observes: “Insurance companies often suspect the only people who buy insurance are the ones most likely to collect.”a. What do economists call the problem that is
The author of an article in the New York Times providing advice to renters observes that “landlords will always know more than you do.”a. Do you agree with this statement? If so, what do
Wall Street Journal columnist Brett Arends offered the opinion that “as a rule of thumb, the more complex a [financial] product is, the worse the deal.” Do you agree? Why would a more complex
Decades ago, many bank records were written by hand in ledgers. Were there significant economies of scale in keeping bank records under that system? How has the shift to keeping all records on
An article in the Wall Street Journal in 2016 refers to the preceding 35 years as “the biggest bond bull market in history.”a. What does the article mean by a “bond bull market”? Does the
How do financial intermediaries reduce the transactions costs involved in making loans? If we lived in a world in which everyone were perfectly honest, would the difference in the transactions costs
What is the difference between venture capital firms and private equity firms? What roles do they play in the financial system? In what ways do the activities of these firms differ from crowdfunding?
Describe some of the information problems in the financial system that lead firms to rely more heavily on internal funds than external funds to finance their growth. Do these information problems

Showing 1000 - 1100 of 1701

First
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18

Get In Touch

About Us
Contact Us
Career
Jobs
FAQ
Campus Ambassador

Company Info

Security
Copyrights
Privacy Policy
Terms & Condition
SolutionInn Fee
Scholarship

Services

Sitemap
Fun
Definitions
Become Tutor
Study Help Categories
Recent Questions
Expert Questions

Copyright © 2024 SolutionInn All Rights Reserved.

Get the SolutionInn - Study Help App