18- which of the statements given below is false? Please select one; a) a financial intermediary borrows funds from people who have saved b) in a bull market stock prices are rising on average c) interest rates can be accurately described as the rental price of money d) a stock is a debt security that promises to make periodic payments for a specific period of time e) banks are financial intermediaries that accept deposits and make loans

Q: Which of the following actions cannot be used by banks to increase reserves? A. Sell Treasury…

A: Reserves  are parts of the income of a corporation that have been set aside to improve the financial…

Q: The following is true for banks managing interest rate risk:     In refinancing risk, banks gain…

A: Step 1 The ability of the bank or financial institution to refinance the matured liabilities at very…

Q: 24. Financial institutions that cut back on their lending are engaged in A) liability management B)…

A: Honor code: Since you have asked multiple questions, we will solve the first question for you. If…

Q: Identify the incorrect statement. A. Banks that issue bonds increase their equity. B. Companies that…

A: Bonds are debt instruments that entities use to raise capital. When an entity (whether a bank,…

Q: When deposit inflows exceed loan demand a bank can A. No answer text provided. B. buy back shares…

A: The correct answer is D. invest in safe fixed income securities. Explanation:The correct answer is…

Q: The business holds cash, treasury notes, and corporate bonds. It is exposing itself to interest rate…

A: Since business is exposing itself to interest rate risk, it is ready to bear or accept risk.

Q: rice of Home Depot stock is trading for $325 per share. You believe the price is too high. If the…

A: When you trade in the stock market than purchase at right price is important because other wise you…

Q: Which of the following statements is false? A.   The sovereign credit rating is a risk of a…

A: A bond is an fixed market instrument that carries less risk than equity.  To check creditworthiness…

Q: 171.One of the elements addressed in the Dodd-Frank bill was authority over nonbank financial…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: What is float in the banking system? A. An illegal activity that is a form of bank fraud B.…

A: Float in banking system means that money is counted due to time difference between deposit made and…

Q: explain the meaning of the old Wall Street saying if you engage in financial market activity you…

A: If you engage in financial market trading you either sleep     well or you eat well.…

Q: Which one is not an incentive for a bank to securitize its mortgage loans? Reduce insurance premium…

A: The objective of the question is to identify which among the given options is not a reason for a…

Q: hich one is not an incentive for a bank to Securitize its mortgage loans? A) Reduce insurance…

A: The objective of the question is to identify which among the given options is not a reason for a…

Q: Balance Sheet Insolvency occurs when Liabilities are greater than the Assets resulting in negative…

A: Insolvency Risk: Insolvency risk is a probability that an enterprise cannot satisfy its debt…

Swaps

A swap is a derivative contract in which two parties are agreed to exchange their cash flows from two different financial instruments for a defined period. In swap contracts, cash flows from one financial instrument are fixed and cash flow from other financial instruments is variable based on the interest rate, exchange rate, and commodity price. Swap contracts are transacted in an over-the-counter system. Swap contracts are utilized to hedge risk and mitigate loss.