A funding component is O the total funding required for a specified decision point O a long-term source of capital O a collateral agreement, such as pledging an asset as security for a mortgage bond O an ancillary requirement on a loan that affects its risk, such as a restrictive covenant

Q: Outline THREE considerations to be included in an analysis to select the most appropriate amount of…

A: 1. Cash Flow and Liquidity NeedsExplanation: Short-term borrowing is typically used to meet…

Q: You own a stock portfolio invested 25 percent in Stock Q, 15 percent in Stock R, 10 percent in Stock…

A: Portfolio beta will be reflective of the systematic risk of the portfolio and it cannot be…

Q: What are Contingent Liabilities?  Give an example.  What are the factors that determine the reason…

A: A liability, the occurrence of which is uncertain that is it may or may not occur is known as a…

Q: 7. Which of the following is not one of the factors impacting the borrowing rate of repo assets? OA…

A: The factor that is not one of the factors impacting the borrowing rate of repo assets is:D.…

Q: Explain how to account for the impairment of an available-for-sale debt investment.

A: Debt Investment:   A debt investment involves loaning out the money to an institution in exchange…

Q: How can we use special financial functions to determine the total interest?

A: Financial functions have made financial calculations easy using excel, they make you calculate the…

Q: Compare the advantages and disadvantages of debt andequity financing, and explain the two major…

A: Debt Financing: Debt financing refers to borrowing money from outside to meet the capital…

Q: Please explain the risks the buyer of a loan participation is exposed to

A: There are many risks involved in loan and it is very risky to give loans because of default on loan…

Q: What evidence is necessary to demonstrate the ability toconsummate the refinancing of short-term…

A:

Q: State the advantages of long-term debt financing.

A: Long Term Debt Financing: It refers to the debt financing required by the firm which usually has a…

Q: If Valuation Allowance for Available-for-Sale Investments has a credit balance, how is it treated on…

A: Available-for-sales securities: These are short-term or long-term investments in debt and equity…

Q: Debt financing can enable the return on assets to be greater than the return on equity True False…

A: Debt financing can increase the return on equity (ROE) but it does not typically enable the return…

Q: Which statement is true? * General borrowings may earn investment income deductible against general…

A: Business may borrow funds for the purpose of business. These borrowings can be general borrowings or…

Q: The realized gain (loss) on sale of debt investments with an objective of collecting contractual…

A: Realized Gain: When an investment is sold for a greater price than it was originally acquired, this…

Q: Which of the following loan commitments are within the scope of IPFRS 9? * Loan commitments that the…

A: the following loan commitments are within the scope of IPFRS 9:: Loan commitments that can be…

Q: Why What kind of stream of income does a debt security pay for the duration of the security? A fixed…

A: The Answer

Q: Define CDO, collateralized debt obligation

A: The question is based on the structure and definition of Collateralized debt obligation (CDO), the…

Q: Which of the following is not an established method of translation? O a. Forward method O b.…

A: If a business entity operates in other countries, different currencies are used for reporting the…

Q: Collateral may mean the acquisition of rights over either assets belonging to a borrower and/or the…

A: Collateral is a financial concept that involves using assets as a form of security in lending and…

Q: Interest revenue for debt investments at fair value through other comprehensive income is computed…

A: When the debt instruments are bought at off market terms, such instruments are measured at their…

Q: perlod of a loan or investment

A: Compounding period and period of loan are interrelated to each other.

Q: Differentiate equity financing from debt financing.

A: Finance is the term used for funding, raising or investing in the various business activities. For a…

Q: Explain the term Mortgage-Equity Capitalization?

A: The mortgage equity capitalization technique is not a technique which is that commonly used. However…

Q: When one examines a REIT investment, why it is important to consider the terms of the company’s…

A: REIT stands for Real Estate Investment Trust. It manages and operates properties that generate gain…

Q: Why would lenders, in general, tend to set loan maturities (not amortization, but when the loan…

A: Loan Maturity: The time period for which a loan is extended is known as the loan period.  The date…

Q: A gain or loss from debt restructuring should be A.  treated as increase or decrease in Paid-in…

A: Earlier gain or loss from debt restructuring was transferred to capital reserve, but now gain or…

Q: Compare and contrast lending and ownership investments. Provide details

A: Solution- Ownership investment- When you lend your cash to a corporation or the govt, you receive…

Q: Explain Issuance of loans to unworthy entities with examples

A: Issuance of loan to unworthy entities means granting of loans to the entities having a poor…

Q: Which are the fundamental relationships to know in any loan refinancing decision include at least…

A: Loan refinancing decision involves replacement of an existing debt with a new debt. The intention of…

Q: Evaluate in terms of the framework, why it is appropriate to capitalize borrowing costs under…

A: Borrowing prices are interest-associated alternative costs that an entity incurs in reference to…

Q: re direct and indirect forms of financing.

A: Direct financing is no intermediaries involved and indirect financing is not direct but through…

Q: Compare and contrast collateralized debt obligations (CDOs) and structured investment vehicles…

A: Points Contrast Collateralized Debt Obligations (CDOs)  Structured Investment Vehicles (SIVs)…

Q: Name the two types of debt financing?

A: Debt is the amount owed by the company for a particular period from the date of the company's…

Q: How is interest determined in a capital lease transaction? How does the approach compare to other…

A:

Liquidity Risk Exposure

Answer: c