Will the u.s. dollar remain the currency of choice

Reference no: EM132171113

Graded Project - Naked short selling

Project questions

1. Fannie Mae and Freddie Mac are GSEs. Define GSE witha brief explanation.

2. To slow the decline of market values of Fannie Mae,Freddie Mac, and 17 other financial firms, the Securitiesand Exchange Commission (SEC) suspended nakedshorting for a short period.

a. What is a long position in a stock?
b. What is a short position in a stock?
c. What is a naked short position in a stock?
(Distinguish between a short and a naked short.)
d. Are retail investors or traders permitted to naked short a stock?
e. Who is permitted to naked short a stock (assumingthere has been no suspension of this practice)?

3. a. Following the first SEC suspension of naked shorting (post-June 2008), did other nations follow this practice?
b. If not, explain why. If so, list a few.

4. When the temporary suspension of naked shorting wasimposed by the SEC, stock prices increased, due to a"short squeeze." Explain the term "short squeeze."

5. The problems with Fannie Mae, Freddie Mac and otherfinancial institutions were said to have been caused bythe securitization of risky mortgages issued to uncreditworthyborrowers along with credit default swaps toinsure these risky mortgages. The credit default swaps
weren't capitalized-there was nothing available to payoff on these credit default swaps, so when the borrowerdefaulted on the mortgage and the credit default swapwas tobe "cashed in," there was nothing available andthese securitized mortgages became worthless.

a. Worldwide, what's the approximate value of creditdefault swaps in circulation during this period?
b. How did this amount compare to U.S. and worldwidegross domestic product (GDP) during this period?

6. a. In what currency is oil traded?
b. In what currency are credit default swaps traded?

7. a. Will the U.S. dollar remain the currency of choice?
b. Have any nations called for a switch from the U.S.dollar?

Reference no: EM132171113

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Reviews

len2171113

11/19/2018 10:19:12 PM

Written Communication The student _ Answers each question in one or more complete sentences _ Uses correct grammar, spelling, punctuation, andsentence structure _ Provides clear organization when necessary (for example,uses words like first, however, on the other hand, and soon, consequently, since, next, and when) _ Makes sure the project contains no typographical errors

len2171113

11/19/2018 10:19:03 PM

Grading Criteria Your project will be evaluated according to thefollowing criteria: _ Content 80 percent _ Written communication 10 percent _ Format 10 percent Here’s a brief explanation of each of these points. Content The student _ Provides clear answers to the assigned questions _ Addresses the questions in complete sentences, not justsimple yes-or-no statements _ Supports his or her opinion by citing specific informationfrom Web sites and any other references using correctAPA or MLA guidelines for citations and references _ Stays focused on the assigned issues _ Writes in his or her own words and uses quotation marksto indicate direct quotations

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