Question: 1. What is the difference between systematic and non-systematic risk? Which is more important to an equity investor? Which can lead to the bankruptcy of

1. What is the difference between systematic and non-systematic risk? Which is more important to an equity investor? Which can lead to the bankruptcy of a corporation? 2. What is meant by net interest income? 3. What is the difference between the banking book and the trading book? 4. What is the attraction of a Dutch auction over the normal procedure for an IPO? In what ways was Google's IPO different from a standard Dutch auction? 5. Carefully explain the difference between hedging, speculation, and arbitrage. 6. What is the difference between expected shortfall and VaR? What is the theoretical advantage of expected shortfall over VaR? 7. What was the transparency problem in the subprime crisis of 2007? 8. Explain the moral hazard problems with deposit insurance. How can they be overcome?

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