Busıness Fınance Iı

Yanıt Açıklaması: Conglomerate multinational corporation produces a different range of products in different countries. By this diversification process, conglomerate multinationals look to spread risks, and maximize returns by careful buying of assets overseas. The correct answer is E.

Yanıt Açıklaması: A derivative security is a financial instrument whose value depends upon the value of another asset.

Yanıt Açıklaması: The Variance-covariance (VCV hereafter) method estimates VaR by first assuming that a portfolio comprises a small number of risk factors (equities, commodities, etc.). Each risk factor is assumed to be drawn from some known theoretical distribution. The statistical distributions of these individual risk factors are combined to yield a single theoretical distribution for the returns of the entire portfolio. This distribution is then used to calculate the VaR of the portfolio. The VCV method is also known as an analytic or parametric method. It is considered the simplest of the suggested methodologies and thus is often used by banks and other financial institutions, for example, for calculating intra-day VaR figures. The VCV approach is generally used with a normal distribution, which significantly facilitates its calculation. Of course, other distributions can be used, but at a higher computational cost. The correct answer is C.

Yanıt Açıklaması: F riendly takeover occurs when managements of both the acquiring firm and target firm approves the terms of merger or acquisition, and state it to stockholders. H ostile takeover occurs when the management of the target firm resists the merger or acquisition. The acquiring firm then needs to make a direct appeal on stockholders of the target firm. T ender offer is the direct offer of the acquiring firm to stockholders of the target firm, to buy their stocks. Negotiation in M&A activity is the process of bargaining between the acquiring firm and the target firm aimed at coming to an agreement over the terms, needs and aims of both parties.

Yanıt Açıklaması: Future transfer is not type of this

Yanıt Açıklaması: Acquisition is taking a controlling ownership in another firm, subsidiary of another firm, or business unit of another firm by an acquirer firm.

Yanıt Açıklaması: Stock split is an action taken by a company to increase the number of shares outstanding.

Yanıt Açıklaması: Broadly speaking, credit risk is the risk that a borrower fails to meet obligations for a loan granted. This risk is of vital importance to banks, as their main business involves lending money to be repaid over a certain period, which in some cases, e.g. mortgages, may be 10 to 20 years or more. The quantification and management of credit risk are radically different from market risk, which focuses mainly on changes in asset prices, and which offers an infinite set of probabilities due to available data. The correct answer is D.

Yanıt Açıklaması: The ratings lie on a spectrum ranging between highest  credit quality  on one end and  default  or “junk” on the other. Long-term credit ratings are denoted with a letter: a triple A (AAA) is the highest credit quality, and C or D (depending on the agency issuing the rating) is the lowest or junk quality. Within this spectrum, there are different degrees of each rating, which are, depending on the agency, sometimes denoted by a plus or negative sign or a number. The correct answer is B.

Yanıt Açıklaması: The risks subject to market risk capital requirements include but are not limited to: (1) default risk, interest rate risk, credit spread risk, equity risk, foreign exchange (FX) risk and commodities risk for trading book instruments; and (2) FX risk and commodities risk for banking book instruments. The correct answer is A.

Yanıt Açıklaması: The Monte Carlo (MC) approach is based on the idea of simulating the changes in the portfolio value by randomly drawing from the imposed theoretical distribution function. The power of the MC simulation lies in its capability to provide approximate solutions applied to problems where no explicit probabilistic content is available. The correct answer is B.

Yanıt Açıklaması: The Variance-covariance (VCV hereafter) method estimates VaR by first assuming that a portfolio comprises a small number of risk factors (equities, commodities, etc.). Each risk factor is assumed to be drawn from some known theoretical distribution. The statistical distributions of these individual risk factors are combined to yield a single theoretical distribution for the returns of the entire portfolio. This distribution is then used to calculate the VaR of the portfolio. The VCV method is also known as an analytic or parametric method. It is considered the simplest of the suggested methodologies and thus is often used by banks and other financial institutions, for example, for calculating intra-day VaR figures. The VCV approach is generally used with a normal distribution, which significantly facilitates its calculation. Of course, other distributions can be used, but at a higher computational cost.  The correct answer is E.

Yanıt Açıklaması: The risks subject to market risk capital requirements include but are not limited to: (1) default risk, interest rate risk, credit spread risk, equity risk, foreign exchange (FX) risk and commodities risk for trading book instruments; and (2) FX risk and commodities risk for banking book instruments. The correct answer is E.

Yanıt Açıklaması: ıt should be tender offer

Yanıt Açıklaması: Franchising is a more comprehensive type of licensing. The franchisee receives a complete package comprising the franchiser’s trademark, products and services, and a complete set of operating principles thereby creating the illusion of a worldwide company for a fee and royalty payments. the correct answer is A.

Yanıt Açıklaması: It should be clearinghouses

Yanıt Açıklaması: Operational risk is simply any event that disrupts the normal flow of business processes and which generates financial loss or damage to the image of the bank .

Yanıt Açıklaması: It is a fact that the global financial system promotes economic growth by several means: - facilitating specialization and promoting trade; - mobilizing resources globally; - Increasing the set of opportunities available to companies, entrepreneurs, and individuals to participate in and contribute to global economic growth. - facilitating risk management, - obtaining information for the evaluation of businesses and allocating capital. The correct answer is C.

Yanıt Açıklaması: Price to cash flow ratio analyses relationship between cash flows and market price. This approach suggests using cash flows instead of earnings because companies may use different depreciation techniques. Cash flow is calculated as net income plus depreciation.