Discuss how the national credit act treats reckless trading

Q: The process of fixing the price of securities in the financial market is based on which of the…

A: Solution: A financial market is market where people trade financial securities and derivatives. This…

Q: List

A: Basel III accord is developed by Basel Committee on banking…

Q: Which of the following is not a Money Market Instrument? a. Commercial Paper b. Debentures c.…

A: Money market is related to short term debt instruments and not long term debt instruments.

Q: The widely publicized subprime lending crisis was NOT caused by

A: Assets: These are the resources owned and controlled by business and used to produce benefits for…

Q: What is a bank discount? How does it differ to simple interest? State the bank discount formula

A: Bank DiscountIt is the Interest amount on the loan that is being subtracted from the principal value…

Q: Critically discuss the CAMELS ratings and its effectiveness in banking regulation.

A: A bank is a type of financial institution that can accept deposits and provide loans. Wealth…

Q: Describe tools that the US Treasury and the Federal Reserve use to undertake restrictive monetary…

A: Following are the tools that the US Treasury and the Federal Reserve use to undertake restrictive…

Q: What does LIBOR stand for, how is it determined, and how is it used for financing outside the United…

A: LIBOR: The LIBOR or the London Interbank Offer Rate is a very short-term interest rate at which a…

Q: Which one of the following is not a money market instrument?  A.     Treasury bill  B.…

A: Money market instruments are investment securities having a maturity life less than one year. These…

Q: A ______________ factor of credit policy effects occurs when a firm which institutes a credit policy…

A: There are different variables related to the credit policy of a company. These variables are -…

Q: Explain what credit default swap is and how CDS's can be used by financial institutions such as…

A: Swap is defined as the derivative contract by which the parties (two) used to exchange the cash…

Q: Explain why Basel Rules require a maturity adjustment for corporate loans but not retail loans.

A: Retail loan is the loan which is provided through commercial bank or the certified financial…

Q: Which of the following is the basis for fixing the price of securities in the financial market? a.…

A: Securities are first issued in primary market with the launch of Initial Public Offer (IPO). Later,…

Q: The actors of the monetary policy process includes the central bank, commercial banks, depositors,…

A: Monetary Policy: Monetary policy refers to the process of controlling the amount of money that is…

Q: Money market securities include: commercial paper Treasury bills negotiable certificates of deposit…

A: The money market is a part of the stock market but it is on a very small level. The wholesale market…

Q: risk

A: Introduction: Banks & other financial institution play an important role in the economic…

Q: A bank guarantee is a guarantee from a lending institution ensuring the liabilities of a debtor will…

A: Bank guarantee refers to the form of surety that is being provided by a financial lending…

Q: Do U.S. GAAP and IFRS differ in how bank overdrafts are treated? Explain.

A: Generally Accepted Accounting Principles:   GAAP (Generally Accepted Accounting Principles) is a…

Q: How does credit risk for a financial institution differs from default risk and What are the problems…

A: Lender loans money to the borrower, and there subsist as the risk of non-repayment of loan or…

Q: in why the covered interest rate parity (CIP) condition can be violated during the financial crisis…

A: Covered interest rate parity says changes in interest rate and changes in exchange rate should be in…

Q: Discuss the Basel disintermediated scenario and its impact on incumbent banks?

A: Better Bank: modernization of incumbent actors and digitalization The new bank: substituting…

Q: How to define credit risk and how to limit that risk.

A: Business provide credit to customers to encourage buying more So payment are paid by customers on…

Q: Compared to Basel II, Basel III capital adequacy regulation ______________.

A: Basel is a committee or framework for the banks. Its main purpose to increase the market discipline…

Q: Discuss the similarities and differences between a bond repurchase agreement anda sale and buyback…

A: Bonds are the kind of loan that is taken by private or government companies to meet their financial…

Q: Discuss the sanctions associated with issue of dud cheques

A: Dud cheque is the cheque which is worth nothing because the person who wrote the cheque it does not…

Q: What is reinvestment risk (in the context of interest rate risk)? How does reinvestment risk impact…

A: A bank is a financial institution which is authorized to deposit money and provide loans. Financial…

Q: When referring to the Federal Reserve System, what is meant by the "Lender of Last Resort?"

A: Federal Reserve system is the central bank of the US, created by the congress to help nation with…

Q: If a bill of exchange is discounted and on the date of maturity such bill of exchange was dishonored…

A: Bill of Exchange According to Negotiable instrument Act there are three types of Negotiable…

Q: With open market operations, the federal reserve sets the interest rate it lends to banks.    Ture…

A: Open Market Operations(OMO) is a tool used by central bank of the country to control money supply…

Q: Which of the following permitted banks the ability to sell insurance? O The Sarbanes-Oxley Act The…

A: ANSWER : The Financial Services Modernization Act.

Q: Briefly describe the concepts of; Letter of credit, trade deficit, negotiable instrument and credit.

A: Letter of credit is a financial instrument that is used as a mode of payment specifically for…

Q: unctions of the Federal Reserve Banking system. Of the functions which is the most critical? Which…

A: Functions of federal reserve banking system : 1. managing the country's monetary policy 2.…

Q: Discuss the risks posed by credit derivative contracts and standby letter of credit.

A: Credit derivative is referred to as the financial contract, which used to allow the parties for…

Q: Why are foreign banks or insurance corporations cannot deposit securities with the SEC?

A: Some insider lending by a bank or other depository institution that is insured under the Federal…

Q: The process of fixing the price of securities in the financial market is based on which of the…

A: The price of securities in the financial markets are volatile in nature. There are both buyers and…