Reference no: EM132755763
Subprime Lending-Greed, Faith, and Disaster
1. Subprime mortgages targeted lower-income Americans, new immigrants, and people who had poor credit history. The customers were told that because house process had been rising, the borrower would be able to refinance the loan at a later date with the increased equity in the house. Was this an ethically correct sales pitch? Were the lenders taking advantage of financially naïve customers?
2. O'Neal transformed Merrill Lynch from a conservative bank into an aggressive risk-taking institution. Risk-taking means that there is the potential for high rewards as well as large losses. From 2002, when O'Neal became CEO, Merrill's share rose 35%. Should the investors now be upset that, as a result of the subprime mortgage meltdown, Merrill's stock price fell by about 30% in 2007?
3. As a result of the subprime mortgage debacle, the CEOs at Merrill Lynch, Citigroup, Bear Sterans, and Morgan Stanley all resigned or were fired. Their departure packages were $161 million, $68 million, $40 million, and $18 million respectively. Are these settlements unreasonably high, given the huge financial losses and write-downs that their companies recorded?
Major tendencies included deleverage
: During the last decade, as we were still trying to respond to the damages of the 2008 final crisis, some of the major tendencies included deleverage,
|
What transfer price between the sod and the supply divisions
: What transfer price between the sod and the supply divisions will lead the manger of the supply division to act in a manner that will maximize company profits?
|
Precondition for employment
: Describe how you'd feel if you had to take a psychological test or an honesty test either as an employee or as a precondition for employment.
|
How organize the transaction data in accounts
: Organize the transaction data in accounts under an accounting equation. (Enter any decreases to account balances with a minus sign.)
|
Subprime lending-greed
: Subprime mortgages targeted lower-income Americans, new immigrants, and people who had poor credit history.
|
What the internal rate of return for the project will
: If a project generates a net present value of zero, the internal rate of return for the project will? be more than hurdle rate. / be equal to the hurdle rate.
|
What is bad boys cost of capital
: If Bad Boys, Inc. raises capital using 30% debt, 5% preferred stock, and 65% common stock, what is Bad Boys, Inc.'s cost of capital?
|
What is the level of safety stock if usage could be as high
: What is the level of safety stock if usage could be as high as 3,200 units/day? Spencer Industry's average usage equals 3,000 units/day
|
Expected rate of return on investment
: What is the Expected Rate of Return on an investment and what does it tell us about the probability of the risk involved with a particular investment?
|