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Linda_us
Linda_us, Finance, Accounts & Homework Tutor
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Experience:  Post Graduate Diploma in Management (MBA)
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Describe the risk exposure(s) in the following financial transactions.

Resolved Question:

Describe the risk exposure(s) in the following financial transactions. Identify which transactions are influenced by interest rates or interest income. (CAUTION: Some can be influenced by both!)
Risk Types: Interest rate risk, Credit risk, Technology risk, Foreign exchange rate risk, Country or sovereign risk


Financial Transactions Risk Type Describe and justify risk type Interest Rate or Interest Income?
A bank finances a $10 million, six-year fixed-rate commercial loan by selling one-year certificate of deposit.
An insurance company invests its policy premiums in a long-term municipal bond portfolio.
A French bank sells two-year fixed-rate notes to finance a two-year fixed-rate loan to a British entrepreneur.
A Japanese bank acquires an Austrian bank to facilitate clearing operations.
A bond dealer uses his own equity to buy Mexican debt on the less developed country (LDC) bond market.
A securities firm sells a package of mortgage loans as mortgage-backed securities.
Describe the features of the method you would choose to measure the interest risks identified.
Submitted: 2 years ago.
Category: Homework
Expert:  Linda_us replied 2 years ago.
Thanks for requesting me. I am working on it.
Customer: replied 2 years ago.

Thank you Linda.


 


I hope it is understandable. The columns didn't copy as I would have liked them.


 


Norby

Expert:  Linda_us replied 2 years ago.
I just need to specify risk type or even explain it?

If there is a specific fomat then best way is to upload it as document.

You can either upload it here in JA or on site like www.box.com and share the link here.
Customer: replied 2 years ago.

















































Financial Transactions



Risk Type



Describe and justify risk type



Interest Rate or Interest Income?



A bank finances a $10 million, six-year fixed-rate commercial loan by selling one-year certificate of deposit.



 



 



 



An insurance company invests its policy premiums in a long-term municipal bond portfolio.



 



 



 



A French bank sells two-year fixed-rate notes to finance a two-year fixed-rate loan to a British entrepreneur.



 



 



 



A Japanese bank acquires an Austrian bank to facilitate clearing operations.



 



 



 



A bond dealer uses his own equity to buy Mexican debt on the less developed country (LDC) bond market.



 



 



 



A securities firm sells a package of mortgage loans as mortgage-backed securities.



 



 



 



Describe the features of the method you would choose to measure the interest risks identified.


 


 


Expert:  Linda_us replied 2 years ago.
Please let me know what is your deadline as it involves description.
Customer: replied 2 years ago.

Can it be done tonight?

Expert:  Linda_us replied 2 years ago.
I would have liked if I had got time till tomorrow as I am currently helping 2 other customers. But if it is really urgent I can stay up late tonight and complete it.
Customer: replied 2 years ago.

I'm sorry for the late notice. yes that would be nice if you could. Thank you very much Linda

Expert:  Linda_us replied 2 years ago.
You are welcome.
Expert:  Linda_us replied 2 years ago.
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Category: Homework
Satisfied Customers: 7139
Experience: Post Graduate Diploma in Management (MBA)
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