1) What id the essential purpose for financial markets? 2) Which is more important, the primary market for stocks of the secondary market? Why? 3) How does a ponzi scheme work? 4) Discuss some of the forces that help make markets efficient? 5) What are institutional investors? Why are they needed in our economy? 6) What are some of the differences between a forward contract and a future contract?

Q: Explain carefully how swaps allow firms and banks to separate different types of fixed income risk.…

A: An interest rate swap is a contract between two parties in which one stream of interest payments is…

Q: In international finance, can you explain the risk involve for both importer and exporter and…

A: International finance is referred as the study of the monetary interactions, which used to transpire…

Q: how

A: Market risk is the potential for losses arising from adverse movements in market prices, such as…

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 a constrain for the investors? a. The mentality tontake the high risk b.…

A: Investing is a critical component of wealth growth. It enables the investor to fight inflation,…

Q: What are the effects of lending institutions on the economy?

A: Economy has different functions to maintain like the currency management, trading activities,…

Q: (1) If derivatives can be so risky, why do so manybusinesses continue to use this market to…

A: Note : As per the guidelines, only first question will be answered. Kindly post the remaining parts…

Q: Is Modern banks are both financial intermediaries and risk intermediaries? And why

A: Yes, modern banks are both financial intermediaries and risk intermediaries since they exist among…

Q: what is the social usefulness of futures exchanges? How do Individuals and companies and non-profits…

A: Future Exchange is a future market or the central office where anyone can trade the standardised…

Q: How do financial institutions help individuals diversify their portfolio risk? In your opinion which…

A: We have to explain how financial institutions help individuals diversify their portfolio risk.…

Q: How can the company use currency options to hedge against exchange rate risk?

A: Those companies which have exposure to foreign markets hedge their risk with currency swap forward…

Q: do you believe there is a need for them as hedging vehicles in corporate finance? If so, how would…

A: Derivatives are financial instruments whose value is derived from the value of an underlying asset,…

Q: Illustrate how to synthesize a forward hedging strategy by using only the money markets, in order to…

A: The idea of forward hedging is to lock-in the price (or exchange rate) today for a future foreign…

Q: Which of the following is true of Behavioral Finance? Question 24 options: 1) It is a study of how…

A: Behavioral finance is that study or that branch of finance which looks at the impact of…

Q: Why is writing deep-in-the-money currency options tantamount to short-term financing?

A: A deep in the money option is an options contract where the strike price of the option is…

Q: Does Arbitrage destabilize foreign exchange markets? Support your logic about that statement

A: Solution- F = S*1+if/1+id  F= Forward Exchange Rate  S= Current Spot Exchange Rate  Id= Interest…

Q: WHAT IS A SMART CONTRACT? HOW CAN IT BE USED IN FINANCE?

A: Block technlogy is growing very much now days and it is used in finance quite much and this based on…

Q: is it so important for an economy to have ful

A: Note : As per the guidelines, only the first question will be answered. Kindly post the remaining…

Q: What are derivatives? How can derivatives be used to reduce risk? Can derivatives be used to…

A: Derivatives A derivative is a securities whose value is generated from or dependent on one or more…

Q: Why securitisation may be very beneficial for both institutions and investors ?

A: explanation Securitization is beneficial because it provides possibilities for investors while also…

Q: open

A: Open market operations refer to the act of purchasing or selling the securities of the government by…

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: What is a Bankers’ Acceptance?

A: short term market securities: these are the securities which last for one year or less.

Q: a)  Why is financial leverage understood to be a fair-weather friend?

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

Q: Discuss the Efficient Market Hypothesis (EMH) and its implications for investors. How do the…

A: The Efficient Market Hypothesis (EMH) is a financial theory that suggests that asset prices fully…

Q: Explain all you know about “efficiency of financial markets”. What are the evidences for and against…

A: Efficiency of financial markets depends on the fact that whether all the facts and figures regarding…

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: Does the efficient market hypothesis suggest that an investor can outperform the market? What effect…

A: Does the efficient market hypothesis suggest that an investor can outperform the market?  The…

Q: 1. changing market interest rates will change the market value of assets change the market value of…

A: A change in interest rate in the economy has a major impact on the balance sheet of the firm and…

Q: What is the difference bet

A: There are many types of traders in the market and each trader has their own objective in the market…

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: What steps will a bank take to put in place an aggressive /defensive strategy in the face of rising…

A: If there is a difference between the interest sensitive assets and interest sensitive liabilities of…

Q: Discuss the importance of market efficiency, and explain why some markets are more efficient than…

A: Market efficiency is defined as the degree, where the market prices used to get reflected as per the…

Q: What is a financial market? Why do we need financial markets? Is the Dhaka Stock Exchange a…

A: Financial market there is buying and selling of securities.

Q: Answer the following: a. Explain why the interest parity condition must hold if the foreign exchange…

A: Foreign exchange market is referred as the market, where the different currencies used to get…

Q: Using an example, discuss the possible effect of hedging on a firm’s tax obligations.

A: Given that these are two separate questions, we will answer the first one according to Bartleby…

Q: Finance in classical economics studies all of the following issues EXCEPT Time value of money…

A: Finance in calssical studies all the following: time value of money, equilibrium price risk, asset/…

Q: Why do companies with small profit margins have a smaller motivation to hedge against currency…

A: Currency movements can have a significant impact on the profitability of companies, particularly…