Credit default swap - Study guides, Class notes & Summaries

Value of IP Investment - ANSWER-probability of generating large positive cash flows* cash flow expected in year 1 / investors required rate of return -g Operational Risk - ANSWER-In breaking down the impact of operational risks on hedge fund failures, fraud (i.e., lying about investments and/or performance) was the leading cause, followed by (in order): theft of assets, style drift and unauthorized trades, and inadequate resources. fee for taking a firm private - ANSWER-typically 1% cds...

TEST BANK Enterprise Risk Management S - The Marketplace to Buy and Sell your Study Material 1 RSK2601 TEST BANK Question 1 Which one of the following is a benefit of effective risk and opportunity management? 1) Improved profit certainty 2) Increased shareholder value 3) Increased stakeholder confidence Correct option 3 4) Lower economic returns Explanation Improved cost certainty, sustainable shareholder value, increased stakeholder confidence and higher economic returns are all benefits of ef...

Value of IP Investment - ANSWER-probability of generating large positive cash flows* cash flow expected in year 1 / investors required rate of return -g Operational Risk - ANSWER-In breaking down the impact of operational risks on hedge fund failures, fraud (i.e., lying about investments and/or performance) was the leading cause, followed by (in order): theft of assets, style drift and unauthorized trades, and inadequate resources. fee for taking a firm private - ANSWER-typically 1% cds...

CDS Question and answers 100% correct CDS CDS - correct answer isolate credit risk of a FI security - two parties: protection buyer, protection seller (usually a dealer) Reference obligation - debt instrument issued by the reference entity Protection buyer buys credit protection from the protection seller and pays periodic CDS spread pmts (fixed at inception) for the coverage....and then dealer assumes credit risk, and would make default payment if default occurs during swap O...

What is the Great Recession? correct answers greatest economical crash since great depression() from housing market banks collapsed, auto industry bankrupt, stock market lost 33.8 percent of value, unemployment around 10%, 2.6 mill lost jobs, 4 mill homes foreclosed, 49 mill people food insecure, what are some factors that caused the Great Recession? correct answers financial crash in 2008, elite deviance, people assumed housing prices always go up What is a flipper? correct answers ...

What is a Credit Default Swap (CDS)? - Answers-an insurance policy on the default risk of a bond or loan. The seller of a CDS collects an annual premium (and sometime an upfront fee) from the swap buyer. The buyer of the swap collects nothing unless the bond issuer or loan borrower defaults, in which the seller of the swap essentially pays the drop in value from par to the swap buyer. How can a CDS be used for speculation? - Answers-CDSs can be used to speculate on the financial health of fir...

mortgage backed security correct answers a collection of mortgages that have been packaged into a security that investors can buy credit default swap correct answers a type of contract that offers a guarantee against the non-payment of a loan or mortgage such as a mortgage back security. Three primary functions of the treasurer of a firm. correct answers Cash management, credit management, financial planning. Three primary functions of the controller of a firm. correct answers Cost acco...