What are the reasons why swaps may be useful for the asset mangers Wybierz odpowiedź: O All of the above O Asset managers can get around capital market restrictions O Asset managers can avoid transaction costs O Asset managers can take advantage of off-balance-sheet reporting and favourable tax treatment
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- What does it mean to adopt a maturity matching approach to financing assets, includingcurrent assets? How would a more aggressive or a more conservative approach differ fromthe maturity matching approach, and how would each affect expected profits and risk? Ingeneral, is one approach better than the others?There are several asset pricing models used to determine an asset’s intrinsic value, the most popular being CAPM and APT. Why would an investor apply the Fama-MacBeth Method in asset pricing assumptions?Which of the following types of factoring is riskier for the buyer of the invoice? Recourse factoring Non-recourse factoring They have the same risk It depends on how many assets the company acquiring the resource has Give typing answer with explanation and conclusion
- explain the unique characteristics of the asset class, their associated risks and potential returns. Foreach asset class, you should use one or two examples to support your explanation. Asset Class Characteristics Risk Potential Returns ExampleCash Products Fixed Income Equities CurrenciesDerivativesWhy would an investor apply the Fama-MacBeth Method in asset pricing assumptions?In current purchasing power technique (a) Why is it necessary to consider monetary assetsseparately from nonmonetary assets? Analyze withexamples. (b) Why does holding monetary assets lead to apurchasing power loss, but holding nonmonetary assetsdoes not lead to a purchasing power loss? Analyze withexamples
- Which of the following statements describing the elements of intrinsic valuation is most accurate? A.) When the present value of the cashflows is discounted with the appropriate rate and this present value is positive, then the asset providing these cashflows has a value to the investor. B.) The risk-free rate is the lowest rate that an investor can earn from short-term investments. C.) Cashflows may include depreciation expenses and amortization costs. D.) A simple calculation of present values of expected cashflows of different investments using the risk free rate would be enough to determine which asset is best.The Capital Asset Pricing Model is usually adopted in a variety of circumstances but it does have some problems. Discuss with reference to actual cases.Answer the following questions in depth .... Why do accountants have to classify items as capital or revenue expenditures? Why do you treat exchanges of similar and dissimilar assets differently? Aren't they all exchanges? Is it true that the higher the depreciation, the lower the net income? If that is the case, why would we not want the lowest depreciation method so we can show the highest net income? Why do we have various methods of depreciation? Isn't that encouraging misleading results?
- Which statement is true? Financing the property may not be beneficial to the owner in terms of yield on the equity investment O If the overall property yield equals the mortgage rate, the owner receives an additional yield on her or his investment by trading on the equity O If the overall yield on the property is less than the mortgage rate, favorable leverage occurs O When negative leverage occurs, the owner receives a cash yield on the property that is greater than if the property were not financedExplain what’s wrong with the following logic to construct multifactor asset pricing models. Start with a simple asset pricing model, e.g. CAPM Consider which patterns are explained by it and which are left unexplained. If some firm characteristic “X” is unexplained, construct and include a new factor on the basis of this characteristic. By definition your new model (with new factor would explain “X”) Repeat steps 2 and 3 until all/most important anomalies are accounted forWhat is an anomaly to an asset pricing model? For example explain what is pricing anomaly to CAPM associated with Book-to-market values.
