QUESTION 6 All of following can be considered differences between commerical banks and contractual savings institutions except: O Portfolio diversification O Need for liquidity O Impact on money supply O Profitablity goal
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- hich one is not an incentive for a bank to Securitize its mortgage loans? A) Reduce insurance premium paid to FDIC B Meet the regulations on equity capital adequacy Increase the duration of the bank's asset portfolio D Reduce the bank's illiquidity exposureCurrent Attempt in Progress What is the best explanation for the recent increase in assets held by mutual funds and other investment companies? O Higher savings rate O Increased flow of funds into employer-sponsored plans and IRAS O Stock market increases O Lower tax rate on mutual funds1-typically increasing interest rates Please select one; a) discourages corporate investments b) discourges individual from saving c) encourages corporate expansion d) encourages corporate borowing e) do only a and b of the aboveę w ww
- Question 24 Which of the following is an advantage of debt over equity A It's generally cheaper B Repayments are generally flexible C Assets can be given as security on debt D The bank can help in the day to day running of the businessWhich one is not an incentive for a bank to securitize its mortgage loans? Reduce insurance premium paid to FDIC Meet the regulations on equity capital adequacy Increase the duration of the bank's asset portfolio Reduce the bank's illiquidity exposure hich one is not an incentive for a bank to Securitize its mortgage loans? A Reduce insurance premium paid to FDIC B Meet the regulations on equity capital adequacy Increase the duration of the bank's asset portfolio Reduce the bank's illiquidity exposure5. Which of the following is/are financial intermediaries? 1 Banks Stock Exchange 3 Credit Unions 1 only 1 and 3 only 2 and 3 only 1, 2, and 3 A C D Which of the following methods of methods of capital budgeting is based on cashflows: 6. A Payback B NPV Profitability Index All of the above C D 7. Debentures carry: Voting rights and dividend Interest and voting rights A C Interest and dividend D Interest only 8. Capital gearing refers to the relationship between equity and: A Short term debt Long term debt Retained earnings D Goodwill
- Which of the following is most consistent with using debt to reduce agency costs or conflicts? Question 11 options: Increasing debt reduces a firm’s business risk The interest paid on debt reduces taxable income and income taxes The interest paid on debt reduces cash that management of a firm might otherwise waste or use poorly The issuance of debt helps firms increase their credit ratingQUESTION 4 Which of the following statements is correct? O A. The tax benefit from using debt financing reduces a firm's risk O B. The lower the level of a firm's debt, the higher the firm's leverage O C. The lower the level of a firm's debt, the higher the firm's equity multiplier O D. The lower the level of a firm's debt, the lower the firm's equity multiplierQUESTION 14 When cost of debt goes up, cap rates typically go down, high cost of borrowing means one can make more money O stay the same, the cost of debt does not affect market cap rates O go up, investers demand a higher return to justify the cost of debt O can go up or down, depending on the commercial real estate sector sector
- What is the best explanation for the recent increase in assets held by mutual funds and other investment companies? Stock market increases Lower tax rate on mutual funds Increased flow of funds into employer-sponsored plans and IRAs Higher savings rateWhat is the SUBPRIME crisis What is a SUBPRIME credit How the Subprime crisis has been transferred to the financial system and the markets What a lesson the fall of Lehman leaves. Establish 05 conclusions about the case and compare it with the economic crisis of the coviddiscuss the rationale behind the introduction of negative interest rate policies across economies worldwide. discuss the effect of increasing the amount paid upfront when corporations make capital purchases focusing on benefits and drawbacks discuss the significance of including the factor of inflation in corporate finance calculation