Are synthetic CDOs a legitimate business investment, or are they pure gambling? If the former, what are their benefits? If the latter, should banks and other companies be allowed to wager on whatever they want if they like the odds and think they can make money that way?

Q: Why do users of derivatives need to be careful? What did Silicon Valley bank do to fail and how can…

A: A derivative is a financial instrument whose value is derived from the asset that is used to create…

Q: Which of the following is true? IRR is the only measure that investors focus on when analysing the…

A: The objective of the question is to identify the correct statement about the Internal Rate of Return…

Q: How do financial intermediaries help small investors access the market?

A: Financial Intermediaries: When two parties in a financial transaction engage in business with each…

Q: What is a scheme that guarantees returns to investors but uses funds from new investors to pay…

A: Characteristic of a scheme has been provided. We have to find the appropriate scheme.

Q: Which of the following is true ? Select one : a . Investment bankers earn a spread based on the…

A: Investment bankers (IB) are the financial organisations which provide advice for the securities to…

Q: why are equities regarded as riskier than debentures for investor? a) because they are paid first…

A: The question is asking why equities are considered riskier than debentures from an investor's…

Q: This problem, like the first one, is a brain teaser. If a market is efficient, how is it possible…

A: Answer:In an efficient market, it’s challenging for investors to consistently outperform because all…

Q: 1. How do you think today's low interest rate environment is impacting the time value of money? How…

A: The answers are given below

Q: Was the creation of the subprime issue good for the stock market or bad (trick question?)? Good for…

A: The us subprime mortgage crisis was considered as multinational financial crisis that occured…

Q: How banks can improve their return on equity and what are its negative externalities.

A: RoE is ubiquitous in banks, serving as both an indicator of overall performance and a means of…

Q: What does the word hedging mean? Why do companies hedge foreign exchange risk?

A: What does the word hedging mean? Why do companies hedge foreign exchange risk? Answer : The term…

Q: hedge

A: “Since you have posted a question with multiple sub-parts, we will solve the first three subparts…

Q: steps that you would take to mitigate the risk of interest rate risk

A: The important steps in mitigating interest rate risks are as follows: Diversification: One of the…

Q: From the point of view of the borrowing business, loan capital tends to be cheap but risky. In what…

A: Company require large amounts of money for growth and expansion and money can be raised through debt…

Q: How is it possible to have arbitrage in an efficient market? Explain. Answer :

A: Arbitrage by definition is the person who exploits the prices of the same asset class.

Q: How do people get money out of the stockmarket?

A: The stock market may be a place where regular activities like buying, selling, and shares are issued…

Q: Do investors generally prefer dividends or share repurchases? Support your answer.

A: Firm issues various securities to arrange the funds for the business and pay periodicals return on…

Q: Do you think investors can earn abnormal returns in financial markets that are at least semi…

A: Semi strong efficiency is a situation where all the public information about the stock prices is…