Essentially, Repo 105 was an accounting loophole used to temporarily remove securities and troubled liabilities from Lehman's
Question:
Essentially, Repo 105 was an accounting loophole used to temporarily remove securities and troubled liabilities from Lehman's balance sheet while reporting its quarterly financial results to the public. These transactions were recorded as sales rather than as loans; thereby creating the impression that it had $50 Billions more cash and $50 Billions less in toxic assets than it really did. Based on this and other elements from the presentation, was Lehman Brothers action legally and/or ethically right?
You are the beneficiary of a life insurance policy. The insurance company offers two options: a lump sum of $50,000 today or payments of $7,000 a year for ten years. If you can earn 6 percent, compounded annually, which option should you take and why? Hint: you need either present value or future value to answer this question.
Expert Answer:
