1. How will youexplain any three of these classifications of financial market to your friends in another...
Question:
1. How will youexplain any three of these classifications of financial market to your friends in another study?
2. Why are financial markets so keenly regulated? Explain the rational for the regulation
of financial markets in USA, providing cogent examples of such regulations within
the American financial market.
3. Expatiate on the role of participants in the primary and secondary mortgage market.
Provide examples.
4. Explain the difference between debt to income (DTI) ratio and loan to value ratio
(LTV). In addition, mention in which scenario the mortgage is likely to be insured,
(a) High or low DTI ( b). High or low LTV.
5. Expound on the arguments in favour and against financial innovation. Provide
examples of financial innovation within any country of choice.
6. A. Charles purchased a T-bill with a $10,000 par value for $9,465. One
hundred days later, Nii sells the t-bill for $9,650. Assuming 365 days in a year,
what is Charles expected annualized yield from the transaction?
B. Assume investors require a 5% annualized return on a six-month t-bill with a par
value of $10,000. The price investors would be willing to pay in cedis will be?
7. According to the Loanable funds theory, how are interest rates determined?
8. Compare and contrast three different money market securities in terms of issuer,
return, risk and tradability/liquidity.
9. Explain the role of non-depository financial institutions within the financial sector?
Discuss the core functions of any three of these institutions.
10. You have learnt about defined-benefit pension plans and a defined-contribution
pension plans. How will you explain these to your sibling who just got a job after his
University education? Which of them will you recommend to him and why?
11. Compare and contrast index fund and active fund. Provide relevant examples of these
and explain what their objective is.
12. Endicott Enterprises Inc. has twenty years remaining on $ 1,000 par value
semiannual coupon bonds paying a coupon of $40. If the yield to maturity on these
bonds is 6% per year, what is the current price?
13. There are several interesting points about the relationship among the coupon rate,
market price, and yield to maturity. Briefly explain these relationships.
14. Distinguish between firm commitment underwriting and best effort underwriting.
15. What is a forward contract? How does it differ from a futures contract?
16. One risk in the mortgage business is prepayment risk? Discuss two implication of this
risk to a mortgagor on the American financial market.
17. Can a borrower in America face penalties if a loan is prepaid? Discuss two reasons why
a borrower would decide to bear this cost.
18. Discuss two factors that would greatly contribute to the rapid development of the
derivative market.
20. Give an account of the impact of the Coronavirus (COVID 19) on the financial
markets with illustrations from two (2) global financial centres known to you.