P. 1
Financial Transactions Risks

Financial Transactions Risks

|Views: 95|Likes:
Published by bhsgirl

More info:

Categories:Topics, Art & Design
Published by: bhsgirl on Nov 14, 2011
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as DOC, PDF, TXT or read online from Scribd
See more
See less

05/12/2014

pdf

text

original

University of Phoenix Material

Week Four Individual Assignment: Financial Transaction Risks 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 Typ e

Describe and justify risk type

Interest Rate or Inter est Inco me?

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.

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->