Question

Which of the following about market value and book value is/are CORRECT? Select one or more:...

Which of the following about market value and book value is/are CORRECT?

Select one or more:

a. Except in cases of extreme credit risk shocks or interest rate risk shocks, the book value of equity is equal to the economic or market value of equity.

b. More frequent regulatory examinations and stricter regulator standards will cause greater discrepancies in book value of equity and the market value of equity.

c. Book value accounting systems recognise the impact of interest rate problems sooner than credit risk problems.

d. The book value of bonds and loans reflects the market value of those assets when they were placed on the books of an FI.

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The correct answer is optoin D i.e. The book value of bonds and loans reflects the market value of those assets when they were placed on the books of an FI.

a-Except in cases of extreme credit risk shocks or interest rate risk shocks, the book value of equity is equal to the economic or market value of equity. - False

b-More frequent regulatory examinations and stricter regulator standards will cause greater discrepancies in book value of equity and the market value of equity.-False

c-Book value accounting systems recognise the impact of interest rate problems sooner than credit risk problems.-False

For further clarrification Please comment

Please ThumbsUp ! Thank You.

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
Why market value is more important than book value? Select one: a. Manager is responsible to...
Why market value is more important than book value? Select one: a. Manager is responsible to increase the market value b. Book value is more important than market value c. All are true d. Market value provide the real value of firm’s asset e. Market value determines firm’s ability to pay their debt
Which one of the following statements about swaps is correct? Select one: a. Comparative advantages in...
Which one of the following statements about swaps is correct? Select one: a. Comparative advantages in debt markets lead to possibility of an interest rate swap b. Only settlement risk is evident in swap contracts since clearing houses use marking-to-market approach to eliminate the credit risk c. A swap is a theoretical concept because efficient markets eliminate all possibilities of arbitrage d. Vanilla swap assumes a swap of a series of two floating interest rate payments
Which of the following about Basel III is/are TRUE? Select one or more: a. Under Basel...
Which of the following about Basel III is/are TRUE? Select one or more: a. Under Basel III, the credit risk-adjusted value of the bank's on-balance-sheet assets can be found by adding the products of the risk weights for each asset times the market value of each asset. b. The greater the Tier I leverage ratio under Basel III, the more highly leveraged the bank. c. Under Basel III a depository institution's capital is divided into five categories. d. Basel III...
Which of the following about Basel III is/are TRUE? Select one or more: a. Under Basel...
Which of the following about Basel III is/are TRUE? Select one or more: a. Under Basel III, the credit risk-adjusted value of the bank's on-balance-sheet assets can be found by adding the products of the risk weights for each asset times the market value of each asset. b. The greater the Tier I leverage ratio under Basel III, the more highly leveraged the bank. c. Under Basel III a depository institution's capital is divided into five categories. d. Basel III...
Answer the following questions as detailed as possible: Question #1 – Time Value of Money Please...
Answer the following questions as detailed as possible: Question #1 – Time Value of Money Please give a detailed example from your own personal or professional experiences (life/career) that involves the Time Value of Money. The Time Value of Money defined as in Chapter 4 as: Present Value, Future Value, Present Value of an Annuity, Future Value of an Annuity, Amortization. It can be one of these above or multiple. Explain the example and how this/these money valuation tools fit...
Answer the following questions as detailed as possible: Question #1 – Time Value of Money Please...
Answer the following questions as detailed as possible: Question #1 – Time Value of Money Please give an example from your own personal or professional experiences (life/career) that involves the Time Value of Money. The Time Value of Money defined as in Chapter 4 as: Present Value, Future Value, Present Value of an Annuity, Future Value of an Annuity, Amortization. It can be one of these above or multiple. Explain the example and how this/these money valuation tools fit into...
1. Which of the following statements is CORRECT? a. corporate stakeholders are exposed to unlimited liability....
1. Which of the following statements is CORRECT? a. corporate stakeholders are exposed to unlimited liability. b. it is usually easier for proprietorships to raise large amounts of capital than corporations. c. one disadvantage of the corporations is operations pay more taxes than other types of businesses such as proprietorships or partnerships. d. corporations generally are subject to less regulations than proprietorships. 3. which of the following statements is NOT CORRECT? a. your uncle purchased 200 shares of Starbucks stock...
Multiple Choice 11. Prepayment risk is: A. the risk you will not receive the cash flows...
Multiple Choice 11. Prepayment risk is: A. the risk you will not receive the cash flows on a mortgage-backed security B. the risk that you will receive the cash flows sooner than expected and be forced to invest at a lower rate. C. the risk that you will receive the cash flows later than expected and not be able to invest at current, higher rates. 12. Based on the video Inside the Meltdown, it appeared that the main reason Lehman...
Read the news article below and answer the question in the space provided. =============================================================== Now credit...
Read the news article below and answer the question in the space provided. =============================================================== Now credit analysis is part of stock analysis In the coronavirus pandemic, stock analysts have a new job: credit analysis. As the global economy grinds to a standstill amid mandatory shutdowns, the survival of many businesses is suddenly in doubt, especially those in vulnerable sectors such as airlines, hotels and restaurants. Instead of asking how fast a company can grow, ever-optimistic equity analysts now have to...
1-A= assets, X=Expenses ,L= liabilities, I= income ,E=owners' equity, which of the following is correct? A)I=A-L...
1-A= assets, X=Expenses ,L= liabilities, I= income ,E=owners' equity, which of the following is correct? A)I=A-L B)I-L=A-X+E C)A+X+E=I+L D)I+L+E=A+X E)I-X=A+E-L 2-A company with a high price/earning ratio A)has a high return on capital B)is a good investment C)may be a less risky investment D)is a bad investment 3-which of the following would be indicated by a steadily increasing Acid test ratio? A)improved liquidity B)increased difficulty in paying creditors C)improved profitability D)difficulties in selling old stock 4-A company with gross profit...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT