Question

The current Covid-19 pandemic has brought vast uncertainty to financial markets and their participants. Which types...

The current Covid-19 pandemic has brought vast uncertainty to financial markets and their participants. Which types of risk (eg interest, credit, etc) are the biggest facing the markets today as a result of these uncertain times?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The biggest risk markets are facing is credit risk. Credit risk is the risk that borrower might default on loan taken by him. In this pandemic, many people have lost their job,many businesses have closed as a result it is possibility that this companies will default as there is no cash flow to them. Further people who have taken home on loan will forces to sell their house as they are unable to pay the debt. This will bring real estate sector down, further no one will buy new house thus there will be excess demand versus supply.

Because of loan default financial system will get into problem bringing in depression.

Thus credit risk is biggest risk that the markets are facing today

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
As a result of the current COVID-19 pandemic, stock markets around the globe have become volatile....
As a result of the current COVID-19 pandemic, stock markets around the globe have become volatile. As an investor you perceive that the markets are going to experience significant movements in the near future; however, you are not sure about the direction of such movements. The markets may go up or go down. In such uncertain circumstances, what type of option strategy would you recommend to follow? Explain why.
As a result of the global Covid-19 pandemic and lockdown, central banks around the world have...
As a result of the global Covid-19 pandemic and lockdown, central banks around the world have stepped in to provide massive liquidity to the capital markets. Among the key policies are to keep interest rates low or sub-zero (zero interest rate policy or ZIRP). Discuss the implication of such policies to credit risk management from the perspective of adverse selection and moral hazard. (Please provide a 400 words explanation)
Case: Covid-19 and Leadership Response The COVID-19 pandemic remains a health and humanitarian crisis, but the...
Case: Covid-19 and Leadership Response The COVID-19 pandemic remains a health and humanitarian crisis, but the business impact on organizations is now profound. As governments make significant interventions in response to the coronavirus, businesses are rapidly adjusting to the changing needs of their people, their customers and suppliers, while navigating the financial and operational challenges. With every industry, function and geography affected, the amount of potential change to think through can be daunting. The greatest immediate impact of the COVID-19...
Assignment Requirements: The coronavirus (COVID-19) pandemic has significantly affected businesses around the globe. This include interruption...
Assignment Requirements: The coronavirus (COVID-19) pandemic has significantly affected businesses around the globe. This include interruption of production, businesses closures, reduced demands, and disruption to supply chains and to financial markets. These effects will have some impacts on financial reporting especially in the application of some IFRS/IAS/AASP standards. In this assignment you are required to answer the following questions: 1. List Eight accounting considerations that are impacted by the Coronavirus 2019 disease. 2. Choose Five of the Eight you listed...
The entire globe has continued to experience the havoc caused by the COVID-19 pandemic, which has...
The entire globe has continued to experience the havoc caused by the COVID-19 pandemic, which has caused businesses to close leaving millions with no means of financial support. As a result, millions of Americans have filed for unemployment benefit to date. Gradually, businesses have started to re-open and some schools have also started classroom tutoring. Of course, there are mixed feelings associated with this. In this assignment, you are required to address some of the concerns, such as but not...
The Case: The COVID-19 has extensively impacted almost every industry across the globe and has brought...
The Case: The COVID-19 has extensively impacted almost every industry across the globe and has brought great economic fluctuations for every business sector. However, the sectors that were greatly affected and had extremely hard hit are the ones that come in the category of non-essential spending. Having said this, branded clothing industry and branded footwear are two market giants that fall in the category of non-essential spending, have seen major downfall over the past few months. Specifically talking about Pakistani...
Months into the COVID-19 pandemic, which continues to affect a growing number of countries and people,...
Months into the COVID-19 pandemic, which continues to affect a growing number of countries and people, 1 the responses to our newest McKinsey Global Survey on economic sentiment confirm the extent of the damage so far. 2 Respondents are much likelier now than in March (52 percent, up from 10 percent) to say their countries’ economies have declined substantially in recent months, and more than twice as likely to report substantially worse conditions in the global economy. Across geographies, vast...
Indicate why you believe your peer has made a good investment decision or a bad investment...
Indicate why you believe your peer has made a good investment decision or a bad investment decision. Also, indicate those areas, if any, which should have been examined more thoroughly. This discussion will review the company Nike’s, ticker symbol NKE, industry conditions, the financial position of the company (relative to the industry and the company as a whole), the economic outlook of the company, and why a potential investor would or would not invest in this company. Nike was founded...
CurtainsMaster is a large proprietary company established in North Queensland in the 1990s, selling a wide...
CurtainsMaster is a large proprietary company established in North Queensland in the 1990s, selling a wide range of high-quality fabric curtains for household decoration. The company purchases products from manufactures in Vietnam, Bangladesh, and China, and then sells its products to wholesales customers in Australia, Germany, and the United States. The company also places its products on consignment in various small retail stores in Queensland. Sales mainly peak from the second half of the financial year, generating an average of...
Our discussion this week is on money, how commercial banks create money, and the central bank....
Our discussion this week is on money, how commercial banks create money, and the central bank. Take a look at the press release by the Bank of Canada from September 9. The central bank has 8 fixed dates for setting the bank rate. This press release gives the rationale for the latest decision on how to change the bank rate. The Bank of Canada today maintained its target for the overnight rate at the effective lower bound of ¼ percent....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT