Explaining how securitization operates

Assignment Help Other Management

Reference no: EM132127

QUESTION 1

Banks find it more profitable to lend money as the margin on lending is much higher than any other banking activity. However, banks have to assess credits risks and take necessary measures to reduce and mitigate their risks

(a) Clearly explain the following terms used in relation to credit risk analysis-

(i) Expected Loss (ii) Credit risk drivers; (iii) Operational risk under Basel II

(b) After explaining how Securitization operates, critically consider the costs of Securitization

QUESTION 2

(a) What do you understand by the terms? (i) Liquidity risk (ii) interest rate risk (iv) cash matching (iii) Liquidity Gaps

(b) Risk analysis includes risk identification, risk description and risk estimation. Discuss

QUESTION 3

(a) Provide explanation to the following terms used in risk assessment-

(i) Risk tolerance; (ii) Moral hazard (iii) dynamic risk

(b) Assess the main risk categories in insurance industry

Reference no: EM132127

Questions Cloud

How much will be paid to purchase the contracts : How many call option contracts must be purchased by ABC in order to hedge against the currency risk of the payment of DM 625,000 on the 21st September 2010? How much will be paid to purchase the contracts?

Describe six risk concepts which will apply to the risk : General employees need to be taught to recognize and assess risks in ways that are relatively easy to understand. Describe six risk concepts (that is questions that a risk manager will ask when assessing risk) which will apply to the risk of most t..

Explain popular risk analysis technique is var : An increasingly popular risk analysis technique is VAR. Explain, illustrate and assess this technique. Discuss what strategies can be used as risk planning tools? Explain the following techniques and state in what part of risk management process they..

How utility functions could affect decision making process : One of the executives of Ford has been saying that: "Risk management is a costly technique that has limited benefits." Discuss. Demonstrate how utility functions could affect decision making process regarding risk of Ford

Explaining how securitization operates : Banks find it more profitable to lend money as the margin on lending is much higher than any other banking activity. However, banks have to assess credits risks and take necessary measures to reduce and mitigate their risks. After explaining ho..

Why are incoterms important in international trade : Why are incoterms important in international trade?, Discuss the risks that an exporter faces when dealing on open account, Explain the risk management process and the importance of reporting and communication in this process.

Explain the distinction between prediction and forecasting : Explain the distinction between Prediction and Forecasting?, Why Forecasting is significant in decision making?, Define Delphi technique of Forecasting. What are the various decisions operation managers are called upon to make in the manufacturing ..

Deliberate the strategic importance of forecasting : Explain the meaning of forecasting. Support your answer by means of appropriate examples in the business context, Deliberate the strategic importance of forecasting

Explain what is meant by capacity management : A customer waiting in line is potentially a lost customer. Choose a service organisation of your choice, suggest and explain the strategies that operations managers could use to make waiting less painful, Explain what is meant by capacity manageme..

User Account

All Pages