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Hedge against Rising Interest Rates with QAI
Hedge against Rising Interest Rates with QAI

... it invests. There is no guarantee that the Fund itself, or any of the ETFs in the Fund’s portfolio, will perform exactly as its underlying index. The Fund’s underlying ETFs invest in: foreign securities, which subject them to risk of loss not typically associated with domestic markets, such as curre ...
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... • The bond purchaser is loaning the company or government money • If the bond issuer goes bankrupt, the bond holder is a creditor and will be repaid during liquidation • A stock holder has no claim on the company assets and can lose their entire investment ...
April - Coca-Cola Credit Union
April - Coca-Cola Credit Union

... credit history and earn a high credit score. It’s important to show creditors that you are capable of paying back loans so that you can take out big-purchase loans such as for a car or home. •S  hort-term liquidity. If you need to make a few major purchases at the same time, credit cards will give ...
the stability of large external imbalances
the stability of large external imbalances

... on its foreign investments than foreigners earn on their U.S. investments – that is, that the United States enjoys a positive returns differential with the rest of the world. It is further believed that such a situation contributes to overall economic stability, or what has been called a “relatively ...
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Turkey’s Experience with Macroprudential Policy Central Bank of Turkey Hakan Kara
Turkey’s Experience with Macroprudential Policy Central Bank of Turkey Hakan Kara

... Historically, sharp capital flow reversals (sudden stops) in Turkey are associated with large output losses. Net Capital Flows / GDP ...
Derivatives and Risk Management
Derivatives and Risk Management

... Futures: Contracts which call for the purchase or sale of a financial (or real) asset at some future date, but at a price determined today. Futures (and other derivatives) can be used either as highly leveraged speculations or to hedge and thus reduce risk. ...
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Understanding Quantitative Easing

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... information” when trading in or recommending ALLETE Securities. “Material non-public information” is generally considered to be information not available to the general public which (i) there is a substantial likelihood that a reasonable investor contemplating a transaction in ALLETE Securities woul ...
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begin part 3

... (2) A commercial mortgage-related security that is offered or sold pursuant to section 4(5) of the Securities Act of 1933, 15 U.S.C. 77d(5), that is rated investment grade or is the credit equivalent thereof, or a commercial mortgage-related security as described in section 3(a)(41) of the Securitie ...
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required rate of return2

... the greater the tax benefits associated with debt). – The easiest way to estimate the cost of debt is when a firm has long-term bonds outstanding that are widely traded. We can simply calculate the yield-to-maturity on these outstanding bonds. – However, most corporate bonds are not actively traded. ...
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... Enron stock price fell from $75 to nothing due to bankruptcy. One aspect of their collapse was the way they managed to keep debt off their balance sheet and hid commitments to honor the debt. Without full disclosure, no one knew the true situation. ...
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Global Economic Crisis What happened?

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... • Structure of the debt: The Merton model in its original setting assumes that the whole debt of a firm is represented by one single zero coupon bond or one single loan which is fully repaid at maturity. This assumption is obviously rather unrealistic. Firms commonly have a complex debt structure, i ...
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... Changes in Housing Finance (Ctd.) • At first, Fannie Mae and Freddie Mac securitized conforming mortgages, which were lower risk and properly documented. • Later, private firms began securitizing nonconforming “subprime” loans with higher default risk. – Little due diligence – Placed higher default ...
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The Investment Environment

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06.09.11 Presentation fr 2010 Innovation Award Winner. White

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As Interest Rates Rise, Muni Bonds` Unique Characteristics Matter

... The comments provided herein are a general market overview and do not constitute investment advice, are not predictive of any future market performance, are not provided as a sales or advertising communication, and do not represent an offer to sell or a solicitation of an offer to buy any security. ...
< 1 ... 194 195 196 197 198 199 200 201 202 ... 257 >

Securitization

Securitization is the financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans or credit card debt obligations (or other non-debt assets which generate receivables) and selling their related cash flows to third party investors as securities, which may be described as bonds, pass-through securities, or collateralized debt obligations (CDOs). Investors are repaid from the principal and interest cash flows collected from the underlying debt and redistributed through the capital structure of the new financing. Securities backed by mortgage receivables are called mortgage-backed securities (MBS), while those backed by other types of receivables are asset-backed securities (ABS).Critics have suggested that the complexity inherent in securitization can limit investors' ability to monitor risk, and that competitive securitization markets with multiple securitizers may be particularly prone to sharp declines in underwriting standards. Private, competitive mortgage securitization is believed to have played an important role in the U.S. subprime mortgage crisis.In addition, off-balance sheet treatment for securitizations coupled with guarantees from the issuer can hide the extent of leverage of the securitizing firm, thereby facilitating risky capital structures and leading to an under-pricing of credit risk. Off-balance sheet securitizations are believed to have played a large role in the high leverage level of U.S. financial institutions before the financial crisis, and the need for bailouts.The granularity of pools of securitized assets can mitigate the credit risk of individual borrowers. Unlike general corporate debt, the credit quality of securitized debt is non-stationary due to changes in volatility that are time- and structure-dependent. If the transaction is properly structured and the pool performs as expected, the credit risk of all tranches of structured debt improves; if improperly structured, the affected tranches may experience dramatic credit deterioration and loss.Securitization has evolved from its beginnings in the late 18th century to an estimated outstanding of $10.24 trillion in the United States and $2.25 trillion in Europe as of the 2nd quarter of 2008. In 2007, ABS issuance amounted to $3.455 trillion in the US and $652 billion in Europe. WBS (Whole Business Securitization) arrangements first appeared in the United Kingdom in the 1990s, and became common in various Commonwealth legal systems where senior creditors of an insolvent business effectively gain the right to control the company.
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