Briefly explain how banks can optimize their position through managing their use of derivatives?

Q: Currently, can cryptocurrency perform the three functions of money. Explain briefly.

A: Cryptocurrencies are a new type of investment. This type of investment does not require a…

Q: Explain with example the differences between Islamic banking and conventional banking,

A: Despite the fact that Islamic commercial banks offer many of the same products as Western banks, the…

Q: What is a financial intermediary?

A: Answer: Financial Intermediary: Financial intermediary refers to an entity or institution that acts…

Q: What is securitisation? Explain briefly the securitisation process and the reasons why banks choose…

A: securitization is the act of pooling together different sorts of obligation instruments (resources,…

Q: Why do loan sharks worry less about moral hazard in connection with their borrowers than some other…

A: The person who charges a very high-interest rate when lending is known as loan sharks. Moral hazard…

Q: Briefly explain how banks can optimize their position through managing their use of commodities?

A: The banking sector is undergoing a significant transformation, fueled by new competition brought on…

Q: What economic functions do financial intermediaries perform?

A: finacial intermediaries perform following economic functions :- 1.they provide fund against interest…

Q: Explain how financial intermediaries reduce a. Adverse selection; and b. Moral hazard.

A: Adverse selection- Adverse selection usually refers to a condition in which sellers have information…

Q: Banks are often accused of collusion. Valid- ate the extent to which collusion is possible in the…

A: Collusion is a formal or informal agreement between competing businesses to fix prices for goods or…

Q: What is the risk if a bank does not diversify its loans?

A: The banks are the biggest financial institutions that operate in the country and indulge in…

Q: In what way might consumer protection regulationsnegatively affect a financial intermediary’s…

A: According to the consumer protection regulations and acts in financial services state that all…

Q: Explain why the interest rate channel of the transmission of monetary policy works better if there…

A: The interest rate channel is a monetary policy process in which a central bank's policy induced…

Q: Explain why a mortgage-backed security becomes riskier when the values of the underlying houses…

A: Mortgage-backed securities are more risky. The cost of borrowing is represented by interest…

Q: What is the main purpose of financial regulation? What kind of instruments may a government use to…

A: Financial Regulation : Financial Regulation can be defined as a form of regulation, laws or rules…

Q: What are the applications of partial derivatives in economics?

A: The derivative of a function of a single variable that depicts quickness of change in function value…

Q: what is a real life example of a commercial bank

A: Commercial banks are the financial institutions which provide people with facility of loans and…

Q: If all banks in America were member banks, explain why the Federal Reserve could be certain that the…

A: Since you have posted multiple questions, we will answer the first question for you. If you want any…

Q: Should banks be more focused on traditional banking, or should banks be able to provide…

A: Financial institutions are the institution that provides the financial service services. It includes…

Q: Banks make more money from securitising pools of mortgages rather than holding on to individual…

A: Banks follow the policy of securitisation to reduce the debt burden and free up capital and increase…

Q: What would happen if the us treasury department stopped issuing new securities?

A: Although rare, especially in the case of US Treasury securities, such a situation might have…

Q: What is a credit default swap? Please explain it in your own words.

A: A credit default swap is a financial derivative that allows an investor to offset credit risk with…

Q: Why has the number of bank holding companies dramatically increased?

A: A bank holding company is a company that exercises management and control over the banks they own…

Q: Two of the economy's most important financial intermediaries are suppliers of funds and demanders of…

A: Financial intermediary refers to an organisation that helps investors to provide money to…

Q: Explain how a bank could optimise its position through managing its use of different financial…

A: Below given how bank could optimise its position through managing its use of different financial…

Q: List and briefly describe the major functions(7) of the Federal Reserve System

A: The  central banking system of United States is known as Federal Reserve System (FRS). The Federal…

Q: What are the roles of banks in the financial system?

A: Financial markets (such as those in which stocks or bonds are traded), securities (from bank CDs to…

Q: Discuss factors that determine the demand and supply of money in the financial system

A: A financial system can be considered on a business, provincial, or international levels, making it…

Q: What are the financial institutions that make up our banking system? Briefly describe their role…

A: The financial institutions that make up our banking system along with their role is mentioned below:…

Q: How does collateral help solve the adverse selection and moral hazard problems in debt contracts

A: Collateral:    It is an asset that a lender accepts as security for a loan. The collateral acts as…

Q: 2. List and briefly describe the seven major functions of the Federal Reserve System.

A: The Federal Reserve System, also known as the Federal Reserve or simply "the Fed," is the United…

Q: should banks restructure their assets and liability composition if market participants are…

A: In the market, any activity or decision of the central bank has the influence on the overall market…

Q: Explain any four instruments that the central bank can use to regulate the financial system?

A: Central bank is said to be a financial institution that has the authority to control money supply of…

Q: Are near money's highly liquid financial assets or many financial asset?

A: Near money is a financial economics term describing non-cash assets that are highly liquid, such as…

Q: What are the examples of uses of derivatives in economics?

A: Meaning of Economics: The term economics refers to the situation under which there remain…

Q: Is Islamic banking really different from conventional?

A: The general conclusion is that Islamic banks are less efficient, have higher intermediation ratios…

Q: What is the difference between a banks reserve ratio and target reserve ratio?

A: The money supply is the supply of currency in an economy. The rise in reserve ratio causes the fall…

Q: Which of the following is a money market security?

A: Money market securities are debt products with maturities of one year or less. Money market…

Q: There are three transactions a bank can make to increase leverage. Explain each type of transaction…

A: Balance sheet can be balanced when  ASSETS = LIABILITIES+ CAPITAL Balance sheet can be defined as…

Q: Why do we call a bank a financial intermediary?

A: An individual or a firm or a party who is placed between two other parties are called Intermediary…

Q: How are cryptocurrencies popular nowadays (such as bitcoins) different from the currencies we used…

A: A cryptocurrency is a digital or virtual currency that is encrypted to prevent fraud and…