Critically discuss five ways in which banks and/or bond holders can manage the credit risk of the loans or bonds they hold as investment assets.

What does the book value of debt and equity refer to? O A. The par values of common stock and the maturity values of debt B. What a willing buyer and a willing seller will exchange the asset for O C. The values at which they are traded in the financial markets D. The values at which debt and equity are carried on a balance sheet

Explain the Debt Investments Classified as Trading Securities.

are designed to indicate the potential default risk that lenders are undertaking when they grant a loan. Repayment capacity ratios O Financial efficiency ratios Profitability ratios Solvency ratios Liquidity ratios

How do creditors assess risk when lending funds to a company? a. By establishing covenants in the borrowing agreement b. By monitoring the borrower’s debt-to-equity ratio c. By checking a prospective borrower’s credit rating before lending to it d. All of the above answers are correct.

Define debt securities and equity securities.  Include their similarities and differences in your discussion.

Credit Analysis and Lending Management Question: Securitization is the financial practice of pooling various types of contractualdebt, such as residential mortgages, commercial mortgages, auto loans, or credit card debt obligations, and selling the pooled debt as securities to investors. Explain the meaning of securitization, how the structure of securitization take place.

Define and discuss the importance of both Debt Markets and Equity Markets (both primary and secondary marketplaces) to our financial markets.

Which of the following represents broadest category of financial products that can be bought and sold? Which of the following represents broadest category of financial products that can be bought and sold? Equities Derivatives Securities Debt

Yields on debt securities are affected by credit risk, tax status, liquidity and term to maturity. Discuss the effect of these factors on the yield of debt securities.