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cash flow statement
cash flow statement

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FREE Sample Here

... 21. Equity is considered riskier than debt because the returns to its suppliers are non-enforceable. ANS: T Dividends are paid at the discretion of the company whereas interest and principal repayments on debt are a legal obligation of the company. PTS: 1 ...
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... proper understanding of risk assessment from various investment products. This could lead to underpricing of risks and accumulation of fragilities and risks to Thailand’s financial stability. 3) External risks to Thailand’s financial system stability. Global growth picked up slowly due to the slowdo ...
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... Which value of risk-free rate is valid in terms of valuation practice in Slovakia? Is it more appropriate to use average value of return on government bonds from the past or to focus on its direct estimate to the future? We can generally say that absolutely risk-free assets do not exist. In the US, ...
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Sukuk: The Sharia Fixed Income Alternative Strategy

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... standard business cycle model in which shocks represent transitory deviations around a stable trend. We find that default occurs extremely rarely — roughly two defaults every 2,500 years. The intuition for this is described in detail in Section 3. The weakness of the standard model begins with the ...
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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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