Reference no: EM13927569
A financial institution is permitted to use leverage up to a maximum debt to equity ratio of 20. Currently the bank finances its $ 100 of assets with $10 of equity.
Managers will likely receive a margin call if asset value falls to 95. true or false why ?
We learn from Gary Gorton’s book that asset-backed securities created by means of the securitization process were used as collateral for short term borrowing. true or false ?
New Century Financial relied heavily on the REPO market for funds used to originate mortgages. true or false?
The following quote from the 10-K filed by Bear Stearns and Company for the fiscal year ending November 30, 2007 indicates that the financial services industry values people with the following characteristics: competent, well trained, motivated and disciplined.
“There is intense competition in the financial services industry for qualified employees. In addition, we face increasing competition with businesses outside the financial services industry, such as hedge funds, private equity funds and venture capital funds, for the most highly skilled individuals. Our business could be adversely affected if we are unable to attract new employees and retain and motivate our existing employees.” true or false?
According to the FCIC report, New Century Financial used the Federal Reserve discount window to raise the capital it needed to finance the origination of mortgages. True or false?
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Stock has an annual return mean and standard deviation
: Woodpecker, Inc., stock has an annual return mean and standard deviation of 13.0 percent and 50 percent, respectively. What is the smallest expected loss in the coming month with a probability of 2.5 percent?
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Eighty units of end item e are needed at the beginning
: Eighty units of end item E are needed at the beginning of week 6. Three cases ( 30 units per case) of J have been ordered and one case is scheduled to arrive in week 3, one in week 4, and one in week 5.
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The credit spread for this firms ten-year debt
: A firm issues ten-year bonds with a coupon rate of 6.5%, paid semiannually. The credit spread for this firm's ten-year debt is 0.8%. New ten-year Treasury notes are being issued at par with a coupon rate of 5%. What should the price of the firm's out..
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Smallest expected loss in coming year with a probability
: DW Co. stock has an annual return mean and standard deviation of 15.5 percent and 44 percent, respectively. What is the smallest expected loss in the coming year with a probability of 5 percent?
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REPO market for funds used to originate mortgages
: A financial institution is permitted to use leverage up to a maximum debt to equity ratio of 20. Currently the bank finances its $ 100 of assets with $10 of equity. New Century Financial relied heavily on the REPO market for funds used to originate m..
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What is the latest week that the order can be started
: If 40 units of the end item are to be assembled, how many additional units of B are needed?b. An order for the end item is scheduled to be shipped at the start of week 8. What is the latest week that the order can be started and still be ready to ..
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What is meant by the chutzpah defense
: The Sarbanes-Oxley Act of 2002 enhanced corporate governance and accountability and stated implications for non-compliance of public companies. Name the six items of improved corporate governance. What is meant by the “Chutzpah Defense”? Is this type..
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Available for other uses under the lockbox system
: Lockbox system Eagle Industries believes that a lockbox system can shorten its accounts receivable collection period by 3 days. Credit sales are $3,240,000 per year, billed on a continuous basis. What amount of cash will be made available for other u..
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Edermine the quantity of each component required to assemble
: Given the following diagram for a product, determine the quantity of each component required to assemble one unit of the finished product.
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