Why would a company want to hold a lot of cash and marketable securities?

Q: Which of these has the biggest potential risk area? O a. Cash Machines O b. Mobile Banking O c.…

A: A cash machine can be defined as a machine that dispenses cash to the users by inserting a card;…

Q: The Money Markets is different from the Capital Markets. What are the financial instruments traded…

A: Money Market : Money market is the financial market where the instruments that have a short term…

Q: Explain how bonds with warrants might help small, risky firms selldebt securities

A: Answer: Warrants are issued with a few common shares relative to convertibles, because all…

Q: In which way CDOs can create a liquidity squeeze in the financial markets

A: The financial market is a market where people trade financial securities and derivates. The…

Q: Which one of the following is NOT a 'Money Market Instrument'? Select one: a. Certificate of…

A: There are two types of markets are present: 1. Money market. 2. Capital market.

Q: The way in which the price of securities determined in Financial Markets is:

A: The correct answer is b. Through frequent interaction between investors.

Q: Which one of the followings is NOT a money market financial instrument? A) Treasury Bills OB)…

A: Solution:- Money market financial instruments are those financial instruments whose maturity values…

Q: What is Hedging Securities? Explain.

A: Hedging is a strategy where investors try to minimize the risk of loss on his portfolio by using…

Q: 1. Explain how capital reduces banking risks. Discuss the importance of cash flows and economic…

A: Capital reduces banking risks:  It reduces banking risk by protecting against insolvency. It is used…

Q: What would these securities be called and what does the Bank need to do to ensure the loan monies…

A: Loans refer to the agreement between the borrower and the bank or financial institution for…

Q: Would it ever be rational for a firm to borrow money in order to pay cash dividends? Explain.

A: The dividends can be paid by company on following  these rules: 1. Out of profits of the company…

Q: Explain the statement “The money market is necessary but not sufficient for the liquidity of…

A: Money market is an organized market which meets short term requirements of the borrowers and…

Q: Does the FASB considers options as securities or as cash?

A: FASB is the Financial  accounting  standard  board

Q: How do you execute your strategy to invest in equities securities?

A: Introduction: The phrase "equity invention" refers to investors' investments in other firms' shares.

Q: What is the money market (include in your answer the characteristics of the money market and the…

A: Financial Market is a place/mechanism which facilitates exchange of financial assets between holders…

Q: How do money markets and capital markets differ? Identify the types of securities traded in money…

A: The Money market is a feature of the economy that offers short term investment option. A…

Q: Explain in detail that how managers of financial institutions manage interest rate risk on Balance…

A: Interest rate risk seems to be the risk of losing money on investment attributable to fluctuations…

Q: Marketable securities are liquid financial instruments that can be quickly converted into cash at a…

A: Cash and cash equivalents are the most liquid current asset items included in quick assets, while…

Q: Which of the following is not a money market instrument? a. Equity Shares b. Treasury Bills c.…

A: Money market instrument means those instrument which are issued in money market and generally for…

Q: What is the Tier I leverage ratio? In what capital risk category would National Bank be placed?

A: Tier 1 Leverage Ratio: It is a ratio used by bank regulators to compare the Tier 1 capital to the…

Q: Both stock and bond returns are based on the cash flows generated by the issuing firm. How do…

A: Shareholders : In simple words, the shareholders of the company refers to the equity stakeholders of…

Q: Why do firms generally prefer to borrow funds to obtain long-term financing rather than issue shares…

A: When a firm or company needs capital to grow or start a new project then it uses debt or equity or…

Q: Is stocks or bonds important to the company or just the investor?

A: The company issues ownership rights in the form of shares to the investors to raise the money from…

Q: Based upon risk, which of the following financial assets is likely to have the highest required rate…

A: Option A: Corporate Bond:  A corporate bond is less risky as return on investment is guaranteed.…

Q: Why are banks currently holding capital well above the minimum regulatory requirement?

A: Capital is the main and important ingredient of banks, without capital , we cannot run a bank,…

Q: Why are bond ratings important to firms and investors?

A: Bonds ratings are important for investors. Bond rating is the rating of the issuing company about…

Q: Why are stock markets the most watched and reported of the financial security markets?

A: Financial markets- It refers to a marketplace that provides an avenue for the sale and purchase of…

Q: • Contrast the activities of securities firms from other financial institutions. How do these…

A: A financial institution (FI) is a business that specializes in financial and monetary transactions…

Q: What roles are played by an investment bank and its brokeragefirm during an IPO?

A: Investment banks provide various types of services to its clients like underwriting services,…

Q: Does a large national debt impact the stock market?

A: The national debt of a country represents the amount of debt which is owed by the country to its…

Q: risk transformtion in banks

A: Risk is a term that is used for defining the uncertainty arising in the future from changes in…

Q: It is said that open market transactions involve the sale or purchase of securities by the BSP to…

A: Central bank of country do open market transactions to increase or decrease money supply in markets.

Q: What is interest rate risk? Elaborate with example. Explain in detail that how managers of financial…

A: Interest rate risk seems to be the possibility of a drop in the worth of an asset, which might lead…

Q: Which one of the following is NOT a 'Money Market Instrument? Select one: O a. Treasury Bills O b.…

A: Money market instrument refers to the short-term maturity financial instruments which are having a…

Q: What are the risk associated with banking activities?

A: Bank's major activity involves collection of funds and lending credit. These activities involve huge…

Q: How do you carry out your strategy to invest in equities securities?

A: Before investing in stocks, investors must put their efforts into research for valuing investing…

Q: Does governance of firms affect the prices of their bonds?

A: Solution- Investors may accept lower return on bonds issued by firms that are subject to governance…