What are the risk implications/shortcomings of financial institutions in increasing their financial leverage to increase return on equity?

Why do some financial institutions offer more frequent compounding in the financial market?

1. What are the advantages and disadvantages of using financial leverage? Answer from the banker’s point of view and then from the bank regulator’s point of view.

How is securitization supposed to help banks and S&Ls manage risks andincrease homeowners’ access to capital?

Discuss how Minsky’s instability hypothesis helps us understand the causes of financial crises.

How does risk management affect a company’s ability to finance its projects?

Explain the following concepts in relation to the role that banks play in financial markets: i) Loan size transformation ii) Maturity transformation iii) Risk transformation

Which of the following is defined as the level of capital that allows banks to sustain the potential losses arising from all current risks and to comply with an acceptable solvency level. a. Asset liquidity b. Capital adequacy c. Liquidity position of a bank d. Market liquidity