Systematic risk evaluates the probability and extent of negative consequences to the larger body. For example, the government has a record of intervening in the event of a probable bank failure; the government’s larger concern is the negative impact on bank customers. Some call this a government bailout. Research a recent government bailout and explain why the government felt it was necessary. What risks do you think the government had to consider in making its decision?

Q: Government policies that focus on the aggregate safety and soundness of the financial system are…

A: Answer: The correct answer is option A. Macro-prudential supervision.

Q: Greater role assumed by government in bailing out financial intermediaries – too big to fail…

A: Financial intermediary is referred as the institution or an individual, which act as a middleman…

Q: What provisions in the Dodd-Frank Wall Street Reform andConsumer Protection Act are designed to…

A: The Dodd Frank Wall Street reform and consumer protection Act is a law for regulating financial…

Q: 4. Investment bank controversies Which of the following is true regarding the "revolving door"…

A: Revolving door: This term refers to the movement of employees from public sector jobs to private…

Q: According to Koch and MacDonald (2009), banks’ risk can be identified as six types: credit risk,…

A: Model risk is a type of risk that arises when a financial model is used to calculate quantitative…

Q: Which of the following statements is false?   A.   Funding risk is the risk that a firm will not…

A: The concept of risk is linked to the uncertainty of future occurrences that may or may not occur.…

Q: Too Big to Fail - During the recession of 2008, we were introduced to this new term. A large bank or…

A: Great recession occurred due to granting mortgage loans to people having lower credit rating. Banks…

Q: Explain your understanding of the money laundering and terrorist financing risks in financial…

A: Financial institutions face considerable risks as a result of the fact that money laundering and…

Q: If a company has some extra cash that is lying idle and wants liquidity and safety in a government…

A: If company has excess cash in hand, it will invest in the liquid funds. So, that the company can…

Q: 8. Which of the following statements is CORRECT? a. An externality is a situation where a project…

A: Since you have posted multiple subparts questions, we will solve the first three questions for you.…

Q: The "Discipline of the Market" means that in a competitive market customers and investors deal with…

A: The question is based on the concept of working of market in perfect competition. A financial…

Q: Which of the following is most true?   The nominal rate of a government long-term security can be…

A: Risk free rate is the theroetical rate of return on the invested amount and security and it is…

Q: The policy that requires regulator intervention when bank capital falls too low is _____, and it was…

A: In this question, we are required to fill in the blanks.

Q: Kramer's investment project costs $14300 and has abbual cash flows of $3800 for six years. A. What…

A: The objective of this question is to calculate the discounted payback period for Kramer's investment…

Q: (b) "Financial innovation sometimes brings great rewards. It can make the financial system more…

A: RELATION BETWEEN INNOVATION AND MANAGING RISK Innovation is the lifeblood of any company, but…

Corporate Ethics

Ethics refers to the moral values and principles that guide an individual. Corporate ethics refers to the moral behavior of a company and its employees while conducting business. Business ethics is another name for corporate ethics. Business ethics reflects the purpose of doing the business. Business ethics is the distinction between what is right and wrong in the workplace and the selection of the right set of actions. Every corporate entity follows business ethics to a large extent in order to survive and compete successfully in the market. Corporate entities that strictly adhere to business ethics gain the trust of their stakeholders and thus gain more customers. An organization follows compliance, i.e., following certain business policies, rules, procedures, and practices to deal with the problem arising from the business environment. Business ethics also ensures that they meet compliance requirements as it was connected with the activities of an organization.