Questions from Financial Markets

Q: Explain how the Financial Reform Act of 2010 and the rules issued

Explain how the Financial Reform Act of 2010 and the rules issued to implement it attempted to reduce the risk in the financial system resulting from the use of credit default swaps.

Q: Assume a horizontal yield curve exists. How do you think the

Assume a horizontal yield curve exists. How do you think the yield curve would be affected if foreign investors in short-term securities and long-term securities suddenly anticipate that the value of...

Q: Explain the possible signal that would be transmitted to the market if

Explain the possible signal that would be transmitted to the market if a country abandoned its use of the euro.

Q: How might expectations of higher prices in the U.S.

How might expectations of higher prices in the U.S. affect the demand for loanable funds, the supply of loanable funds, and interest rates in the U.S.? Offer a logical explanation of why such an impac...

Q: Oregon Bank has branches overseas that concentrate in short-term deposits

Oregon Bank has branches overseas that concentrate in short-term deposits in dollars and floating-rate loans in British pounds. Because it maintains rate-sensitive assets and liabilities of equal amou...

Q: Dakota Bank has a branch overseas with the following balance sheet characteristics

Dakota Bank has a branch overseas with the following balance sheet characteristics: 50 percent of the liabilities are rate sensitive and denominated in Swiss francs; the remaining 50 percent of liabil...

Q: Compare the portfolio managers of closed-end funds with an open

Compare the portfolio managers of closed-end funds with an open-end fund. Given the differences in the fund characteristics, explain why the portfolio manager’s management of liquidity is different in...

Q: Explain why hedge funds may be able to achieve higher returns for

Explain why hedge funds may be able to achieve higher returns for their investors than mutual funds do. Explain why the risk of hedge funds may differ from mutual funds. When the market is overvalued,...

Q: Money that had previously been invested by individual and institutional investors in

Money that had previously been invested by individual and institutional investors in stocks is now being invested in private equity funds. Explain why this should result in improved business condition...

Q: Explain the difference between how equity mutual funds generate returns for their

Explain the difference between how equity mutual funds generate returns for their investors, versus how private equity funds generate returns for their investors. Which fund do you think would be more...