Swap Lines As Anti Crisis Measure

Swap Lines As Anti Crisis Measure
Swap lines as anti–crisis measure
ZHENG ZHOU
999476286
Introduction
After the world financial crisis of 2008, there have been significant changes in the operation of the central banks of a large number of countries. The
monetary policies were forced to be modified by implementation of a series of measures, which were not previously exploited and considered
"nonstandard". On the worldwide basis, this was mostly the development of the reciprocal currency arrangements, which assume the creation of the
swap lines, designed for solving the liquidity problems on the world financial markets.
Main body
Forming of swap lines between two central banks means that in case the need emerges, the banks are obliged to effect the exchange of the ... Show more
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During the 2008 crisis the money, received by the central banks in terms of the swap deals, was redistributed on an auction basis to the commercial
banks in order to make the currency (US dollar mainly) situation on the world markets more stable. The wide spread of the swap lines and the
increase of their scope represents a new trend in the practice of the central banks and is worth a thorough research. Certain authors, for instance
Moreno (2010), Destais (2013), Aizenman, Jinjarak and Park (2011) claim that such currency agreements may decrease the necessity of the
foreign–exchange reserves allocation and become an alternative to such credit instruments of the international market as the IMF credit lines.
Due to the great effect the swap operations have on the economic conjuncture in dollar liquidity, they are historically supervised by the Federal
Reserve. When a central bank activates a swap line in order to increase its dollar liquidity, it makes a direct exchange of a certain amount of the national
currency on the dollars, out of the framework of the world currency exchange market, according to the exchange rate on the moment of the transaction.
The simultaneous creation of the agreement to buy back the same amount of currency at the same exchange rate is normally concluded for a period
from one day to three months.
Since both transactions within the swap

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The Importance Of Entering Into Agricultural Swap
1.Swap is defined as an agreement or contract between counterparties for the purpose to manage their exposure to risk. Our paper will specifically
discuss about one of the commodity derivatives called as Agricultural Swap and referring to the the Agriculture Swap Contract Product (ASC)
Disclosure Statement issued by Westpac Banking Corporation dated in 10 February 2016. The main purpose of entering into Agricultural Swap is
to manage the exposure of the agriculture price's movement by locking the price of the agriculture for a long period (Barned 2012). Agriculture
seller or buyer is entitled to exchange a floating price for a fixed price for a specified commodity (Westpac Banking Corporation 2016). Swaps have
characteristics that similar and also differentiate them from other derivatives instruments (McDonald 2006), which are as follow: Swaps are
categorized as non–standardized contract; therefore they are traded over the counter (OTC). It is also indicate that there is a room of privacy and
flexibility to customize the contract depending on the agreement between the relevant parties involved in the swap. Similar with the others derivatives
instruments, swaps have also a zero initial market value. This implies that parties may enter and exit the swap contract without any cost besides the
commissions and bid ask spread. In commodity swaps, settlement could be arranged with either physical (e.g. commodities) or financial (cash
settlement). There are several

Goodrich-Rabobank Interest Rate Swap Essays
Goodrich–Rabobank Interest Rate Swap
1. How large should the discount (X) be to make this an attractive deal for Rabobank?
2. How large must the annual fee (F) be to make this an attractive deal for Morgan Guaranty?
3. How small must the combination of F and X be to make this an attractive deal for B.F. Goodrich?
4. Is this an attractive deal for the savings banks?
5. Is this a deal where everyone wins? If not, who loses?
Introduction:
Players: Morgan Bank, Rabobank, and B.F. Goodrich, Salomon Brothers,
Thrift Institutions and Saving Banks
Goodrich:
In early 1983, Goodrich needed $50 million to fund its ongoing financial needs. However, Goodrich was reluctant to borrow (short term debt) from its
... Show more content on Helpwriting.net ...
Also, Rabobank had never borrowed in the Eurobond market prior to the deal with Goodrich, and Morgan. Since Rabobank conducted only small
amount of dollar based business, and most of the dollar denominated assets were loans whose rates floated with LIBOR. Historically,
Rabobank was able to fund these loans through the following:
В· Interbank deposits at LIBOR.

В· Prime Eurodollar CD?s.
This was the first time that Rabobank would venture into the Eurobond market. Note: Because of Rabobank?s AAA rating it would be able to borrow
in the Eurodollar market at very competitive rates.
Morgan Guaranty Bank:
Morgan acted as an intermediary guarantor between the Goodrich, and
Rabobank to implement the swap. Morgan was merely agreeing to act as a conduit assuming no default payments. In fact, if Goodrich defaulted it
could not collect the floating rate stream from Morgan. The swap was a two way or no way transaction. This was true for the bilateral agreement
between Rabobank, and Morgan also.
Morgan had an AAAcredit rating, and an international reputation, this guarantee effectively lowered whatever credit risk might have otherwise been
present in the swap agreement to acceptable levels for
Rabobank.
In commissions, Morgan received an initial one time fee of
$125,000.00, and an undisclosed annual fee for each of the next 8 years. The going rate for

Regulation Of Otc Derivatives : Guidelines
Regulation of OTC Derivatives Table of Contentsоїї Executive SummaryIntroductionDevelopment of OTC LegalizationReintroducing OTC
RegulationsThe Effects of RegulationsLessons to the OTC Derivative SectorConclusionWorks Citedоїѕ Executive Summary The financial sector has
used derivatives for several years. Governments have hence developed regulations to manage the economic instrument. The United States government
controls the derivative market through federal agencies; for example, the Security Exchange Commission. The derivative laws aim at enhancing the
transparency of the financial sector. This is through increased monitoring and usage of designated contract markets. The derivative laws have changed
the market structure because of trade restrictions and exit of banks from the market. The Dodd–Frank Act should be implemented internationally to
hinder instability in the global financial sector. Introduction Financial derivatives have existed in some form for hundreds of years, the oldest example
involves a greek philosopher and the production of olive oil. With the widespread use of these instruments governments across the world have
developed regulations and laws to control derivative markets. In the early years the US regulated derivatives using the "Rule against difference
contracts" under common law. (Stout 31) These rules did not stop someone from wagering on something using a contract, but added requirements

Essay on Argument Against Reality Television
What pleasure do you get from watching a group of people humiliate themselves in the name of television? Media both in the UK and around the
world seem to have "discovered" that so–called "reality" shows are very profitable, resulting in a growing string of such shows in recent years.
Although not all are successful, many do achieve significant popularity and cultural prominence. That does not mean, however, that they are good for
society or that they should be aired. Can you honestly say, that after absorbing the reality rubbish, you have learned something?
Educational, stimulating, witty, are all adjectives you would not associate with reality television. Reality T.V is a case of vegetating... Show more
content on Helpwriting.net ...
Soon, one member's sociopathic behaviour is rewarded by making headlines in the tabloids. Vandalism is condoned, swearing is part and parcel of
life, and all our brawls treated as sources of comedy and laughter. Not only did the most recent Big Brother contain sex related scenes and racial
prejudice, but physical attacks in which the police have got involved. And you wonder why GBH is rife around pubs, and why children are getting
suspended from school for deliberately smashing windows?
As I'm sure you are aware of, people, children in particular, love television. A lot of things they see on it will pollute their daily routines. If youngsters
enjoy Big Brother and programs of a similar genre– and further see event emblazoned on the papers, no doubt they will adopt the attitudes of some of
the savage brutes involved. People may say that these clashes on such shows are staged, by developers trying to create drama and humour, and thus
boost up viewer ratings. But isn't this even more shocking? Crafty manipulators clapping their hands in ecstasy as they marvel over a line which
causes friction and arguing. To cap it all off– the antisocial behaviour is actually rewarded, with a large cash prise. "Oh cool" thinks little Jimmy "Do I
get some money for throwing plates around the kitchen? And swearing at

Notes On Credit Default Swaps
Credit Default Swaps
Another financial vehicle that could be problematic was CDS (credit default swap). CDS is a financial derivative works like insurance on securities.
The underwriter is obligated to pay a pre–determined fee to counterparty if a certain security default. In return, underwriters charge a fee as
compensation. CDS can be used to hedge against risks. However there are still some difference between a CDS and an insurance contract.
The CDS does not require buyers to actually hold underlying assets. That means a third party can "insure" against default risk that it would not bear the
consequence at the first place. A financial institution can act like an insurance company by selling CDSs.American International Group (AIG) was the
largest CDS underwriter during the crisis. AIG issued tons of CDSs because historical default rate on bonds were so low that issuing CDS became a
cash generator. They simply collected the premium and never though of paying out anything until the crisis hit.
Another thing that CDS is different from the insurance is that an insurance pool can be much better diversified. For example, a car crash in Los
Angeles will not increase the risk of another car crash in New York since two events of car crash are not correlated to each other. However, as
mentioned before, when the house price bubble popped, the events of defaulting on mortgage can have high correlations. When millions of mortgages
defaulted one after another, the institutes had

Essay on Real World Exposure and CVA Simulation
Real world exposure and CVA simulation
The risk–neutral approach assumes that asset prices follow stochastic process with drift coinciding with the short rate r(t) being risk–free interest rate.
dS(t)=S(t)[rdt+Пѓ(S(t),t) гЂ–dWгЂ—^Q (t)]
Instead, in real–world measure they follow more complex process, which embodies time and risk aversion of investors, namely:
dS(t)=S(t)[Ој(S(t),t)dt+Пѓ(S(t),t) гЂ–dWгЂ—^R (t)] or, equivalently, a process with real–world stochastic discount factors which depend on risk–free
interest rates but also on asset prices itself.
The form of this process with almost arbitrary process's drift term complicates the implementation; for example, makes it difficult in practice to
simulate asset prices through standard analytic or ... Show more content on Helpwriting.net ...
Below we outline this straightforward and well–known implementation methodology yet we further enhance it to join real–world simulation specifics
with the evident benefits of risk–neutral American Monte Carlo pricing.
Under real–world measure there is a problem of defining an appropriate form of the market price of risk, or the drift terms in the equation above. In
practice, one uses historical data for all coupled risk factors as a source to make model assumptions on the market price of risk, then calibrate
real–world stochastic process with corresponding drift terms. Note that for real–world simulation one needs a real–world evolution of the whole yield
curve to incorporate realistic risk perception of market participants and not just a few principal yield curve components as it often happens in
risk–neutral simulation.
There is a large number of approaches to evolve real–world yield curves including non–, semi– or parametric ones based on historical data as the
primary source of real–world model calibration. In general, their common feature is that they preserve historical quote patterns and statistical properties
including the following important ones: historical unconditional moments of 1–day or many–day normal or lognormal changes for all yield

The Ethics Of Rowell Collins
Understand the Business Rowell Collins is an international manufacture company, which was found in 1933 and headquartered in Cedar Rapids, Iowa.
It provides "flight–deck avionics, cabin electronics, mission communications, information management and simulation etc." to its governmental and
nationwide customers (Rowell Collins, 2016b). And its main competitors in the industry are Raytheon Company, BAE System PLC and Honeywell
Aerospace. According to its most recent 8K filing, Rockwell Collins entered into a merger agreement with B/E Aerospace, Inc. And its board of
directors has agreed to recommend pay a part of the merge expense by issuing more common stocks.
Assigned Footnote Topic, Relevant Portions of Financials and ASC According to FASB ASC 815
–10–05–04, companies must recognize the derivative
at fair value on the statement date and designate it to fair value hedge, cash flow hedge or foreign currency hedge. Also according to FASB ASC
815–10–35–02, the company should record changes in fair value of the derivative and hedged items in current earnings. But for cash flow hedges, the
company should recognize the changes net of tax in other comprehensive income until the related transactions take in place. In order to manage its
exposure to interest rate, Rockwell Collins entered into the 2019 and 2023 interest rate swaps, hedging the fixed–rate debts to variable–rate debts. The
company designated them as fair value hedge, and recognized the cash payment or receipts to

Advantages And Disadvantages Of Container Freight Swap...
SHIPPING DERIVATIVES
(Container Freight Swap Agreement and Freight Options)
Introduction
Seaborne trade (a business), which carries more than 90% of all world commerce, is a volatile and risky business due to the interplay of demand and
supply and it effect on freight rates. The rollercoaster nature of the business especially in respect to freight rates demand that critical attention is payed
to the management of risks.
In the past decades, freight rates have risen to their highest peaks and have also equally fallen to their lowest level, to the advantage and disadvantage of
ship–owners and charterers respectively.
Local Scenario
As a world phenomenon, these (rate fluctuations) are equally experienced by stakeholders (forwarders, ship–owners, ... Show more content on
Helpwriting.net ...
This may change in the future as the market grows further. In other cases, there is the potential of default in the payment. This is however only an issue
in respect to contracts settled over the counter (OTC).
Conclusion
Shipping derivatives contracts in the form of Container Freight Swap Agreements and Freight Swap Options are risk mitigating measures especially in
the uncertain world of shipping business. To all stakeholders in the shipping business in Ghana and other parts of the world, the use of shipping
derivatives can ensure sustainability in the rather volatile period in which ship–owners and charters find themselves.
Works Cited
Amir, A. H., & Nikos, N. K. (2009). Shipping Derivatives and Risk Management. London: PALGRAVE MACMILLAN.
Kleindorfer, P. R., Yoram, J. R., & Wind, G. R. (2009). The Network Challenge: Strategy, Profit, and Risk in an Interlinked World. New Jersey:
Prentice Hall Professional – Business & Economics.
Ogbugo, M. (2016, 12 13). CitiFM Online. Retrieved from CitiFM Official Web page:

Ok Chin Identity Swap
The question that I decided to use was "The author mentions that Ok Chin tried to tell her adoptive parents about the switch, but the parents only spoke
English, my question is why the orphanage didn't make sure the parents and adopted child have some form of communication so things like this won't
happen?" In my opinion, I believe that the orphanage should have a better system so children won't get switched in the process of adoption. For
instance, the orphanage should have made sure that each child was able to communicate with their new parents and vice versa. Even if the adoption
process has to take more time, this is highly needed in international baby trades. Just by making sure the child and parents are able to communicate with
each other can help stop many problems that they may have. ... Show more content on Helpwriting.net ...
The parents and the child are able to get to know each other much better if the orphanage take the time to make sure that both child and parents
know how to communicate with each other. However, as I was conducting my research, I came across an article about the film of Ok Chin's life
called, In the Matter of Cha Jung Hee. According to the article Ok Chin identity swap was purposely done. OK Chin was told to keep secret about
her identity because the real Cha Jung Hee was taken by her father days before the adoption. Therefore, the orphanage needed another eight year old
girl for the parents. However, in my opinion all of this could have been done easily with the truth. There was no need to take an eight year old girl's
identity away and make her become someone else. If the orphanage would have just told the Borshays, the family that was supposed to adopt Cha Jung
Hee, then they probably would have understood the entire

Michael Lewis The Big Short: Inside The Doomsday Machine
INTRODUCTION
The capitalist and the not capitalism or communism are the 2 types of economic system. The capitalist is a free market that gives a freedom to people
to be wealthier without any help, however, the noncapitalist is a government rule the people and people don't have freedom. To be successful in life
people should take a risk by betting or investing mortgages, investments, funds, or other products. The non–fiction book name The Big Short: Inside the
Doomsday Machine is written by Michael Lewis is about the subprime of mortgage and bond, and the work o f people like, Bear Stearns, Deutsche
bank and Steve Eisman of front point partner believes that the housing bubble will be break apart and the wall will be in debt. However, the ... Show
more content on Helpwriting.net ...
If individuals or countries are left unrestricted to pursue their own self–interest that will have an incentive to specialize to comparative advantage thus
making themselves and other better off. More commonly it referred as the advantage of a policy of Laisse Faire, benefits of a free market, allowing
the unrestricted exchange, and it is a capitalist market–based solution. The government leaves people free to choose and it is the best for economic
policy of wealth creation because are unrestricted so that they can create more money and become rich. It describes to The Big Short: Inside the
Doomsday Machine book because the author writes about capitalist economic which is free market and people can be rich on their own without any
political power to help people and it gives an example of people who were free and became wealthy. In fact, the policy or system which increases the
wealth is because of a do–nothing policy rule. This policy also referred to as a free market policy, capitalism, and letting the market to operate. Also, the
do–nothing policy is capitalism and has two ways to get people to comparative advantage and exchange. First leaving people free to pursue their
self–interest as they define it maximum freedom, which leaves people alone, not influences people's values and does not try to help people what is
good or bad they choose so it will lead to specialization according to comparative advantage and exchange. Finally, the united states political system is
uniquely configuring to favor of the "Do–Nothing Policy" and this is why the united states excel at wealth creation and equality. Also, the Big Short is
the story of how in a free market capitalist system people become rich by taking an in their

Lakeland Swaps Between Dry And Wet Season
Along with the rest of Florida, Lakeland swaps between dry and wet seasons. Between July and September, precipitation levels are very high. The
remaining months are drier than July and September. Florida does not experience very cold temperatures in the central region. The dry seasons are
typically on the warmer side regardless of lack of humidity. However, Floridian wet seasons cause very humid and hot temperatures.Precipitation
reaches up to seven and a half inches per month in parts of the summer (US Climate Data). Annual variability is low as similar conditions are expected
year after year despite the occasional winter resulting in harsher temperatures. On occasion, Lakeland is vulnerable to fog. Hurricanes, heat waves, high
winds, and

Bf Goodrich Bank Swap
B.F Goodrich/Rabobank interest rate swap case
By: Mitchell Gahan 13179537 James Grimard 13191612
Josh Hutchins 13220396
Lecturer: Colette Southam
Due Date: 17/06/13
The first key issue in the B.F Goodrich/Rabobank interest rate swap case was why they felt the swap was needed? B.F Goodrich was the fourth largest
U.S producer of tires and the largest U.S producer of polyvinyl chloride (PVC) resins and compounds. During 1982 Goodrich announced a $33million
dollar loss and needed to borrow 50 million to fund its ongoing financial needs. In addition Goodrich was disinclined to borrow the funds in the short
term as they didn't want to compromise its future flexibility by borrowing short term. The company also felt due to the ... Show more content on
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The floating rate is pegged to LIBOR – X therefore the interest rate risks would dependant on the London interbank rate (Refer to Exhibit A).
Conversely with Rabobank also known as the receiver in this transaction receiving fixed payments and paying a floating rate will make a profit if
interest rates decrease and a loss if interest rates increase. (Refer to Exhibit B)
Interest rate swaps are very popular due to the arbitrage opportunities they provide. Due to varying levels of creditworthiness in companies, there is
often a positive quality spread differential, which allows both parties to benefit from an interest rate swap. In the case of B.F. Goodrich and Rabobank
the QSD was +1.675% (Refer to Exhibit C), indicating that the swap of the interest rates is in the interest of both parties. The arbitrage in affect
between the two creditworthy firms moves the USD and the Euro currencies closer to purchasing power parity. This inturn contributes to the market
becoming more efficient as trading institutions take action on potential price mismatches.
Exhibit A
Exhibit B

Case Report of Swap Spreads, 2010 Essay example
The article Swap Spreads:2010 talks about a financial abnormity that the 30–year swap spread has kept negative since late 2008 for a long time, and an
arbitrage opportunity based on the bet that LIBOR would never fall below equivalent government bond interest rates.
Question1: Would you recommend that GIC do the bond/swap trade discussed in the case? Why or why not?
The arbitrage portfolio is to enter into a 30–year LIBOR swap to pay fixed and receive floating interest payment, to long a 30–year government bond,
and to take rolling short positions in 3–month T–bills. In practice, the 3–month T–bills are replaced by taking a rolling short position of repos daily and
entering into a 3–month OIS to receive floating and pay fixed (OIS rate) ... Show more content on Helpwriting.net ...
Finally, although the article says that the LIBOR–OIS spread is little changed, it cannot guarantee that the spread won't be volatile in the 30–year time.
To sum up, the trade is feasible, but there are still some things that need to be concerned.
Question2: What would be the internal rate of return on the trade over 30 years?
Suppose there are no transaction cost, the value of government bonds does not change very much, the notional amount is 1 billion US dollars.
The payment is delivered every 3 months, there are 120 deliveries in total. N=120.
Payment at time 0 is –1.5%*1,000,000,000=–15,000,000
Payment at each delivery time =[(3.875%–3.445%)+0.0025]*(1/4)*1,000,000,000=1,700,000
Thus, the IRR=11.33%*4=45.32%
Question3: Why do you think the 30–year swap spreads are negative? What type of financial institution would want to receive fixed versus paying
LIBOR at these rates?
There are two reasons why the swap spread is negative. First of all, people are more risky. The swap spread is the difference between LIBOR swap
rate and governmental bonds rate of the same horizon. So it can also been seen as the premium at which large financial institutions can borrow.
Investors now think sovereign credits as riskier than highly rated corporates. Second, liquidity is very low in the long end of swaps. The low liquidity
is mainly driven by hedging of exotic derivatives.
Pension funds would be

Sneaker Swap
The target segments for the service of Sneaker Swap will target are three segments where the financial situation of these individuals do not allow
them to participate in sporting activities. According to (Walker, 2013) 9 out of 10 children enjoy playing sport or other recreational activities.
However a majority of individuals cannot afford to fund their aspirations to try new sports. (Walker, 2013) Research into the area of sport
participation in New Zealand revealed a declining trend in individuals aged 10 – 18years old and the amount time spent on physical activity during
period of one week. The research demonstrated that as individuals grew older they participated in fewer sports and in some cases no sports at all.
Segments have been chosen

Swap Calculator
Contents: Interest rate swap basics 2
Excel work 4
References 8
Interest rate swap basics
Swaps, being highly liquid derivatives, are not traded on stock exchange, but facilitated by over–the–counter (OTC) trading. Interest rate swap is an
arrangement between two parties whereby they exchange one set of interest payment for another. The most widespread arrangement is when fixed–rate
interest payments are exchange for floating–rate interest payment on some notional amount over the time. This notional amount is generally not
exchanged between counterparties, but is used only for calculation of the size of cash flows to be exchanged, and what is more, usually only resulting
cash flow (difference between fixed and floating ... Show more content on Helpwriting.net ...
All the requirements imposed for the calculator are met.
Before we value the plain vanilla swap, we need to input the following parameters:
Notional
Contract period (Since the majority of interest rate swaps have a contract period between 1 year and 5 years, I decided to specify it within this interval.)
Fixed interest rate
Frequency of payments (1, 2 or 4 times a year)
After all the values of the required variables are entered, the button "Calculate" should be clicked to obtain the swap present value and such
intermediate values like PV of fixed CF and PV of floating CF, the difference of which is actually the swap present value.
The table below represents the logic of the swap calculator.
Explanation of columns:
Column (1) represents maturity in parts of the year. The scale interval is set as 0.25, since maximum possible payment frequency (for this calculator) is
4 times per annum.
Column (2): I set forward LIBOR rates as floating interest rates. Depending on payment frequency, 1–year, 6–month or 3–month LIBOR rates are set as

Pategonia's Expansion Strategy
1. Patagonia's Current Strategy: Key Processes and Customer Perception In the context of our business model our number one key process is our
Rules and Norms (a complete breakdown of Patagonia's current business model and a to–be–proposed business model are available for review in
Exhibit I). This ethos that started with the founding of Chouinard Equipment continued through the creation of Lost Arrow and indeed Patagonia. Our
self–proclaimed "dirtbag" culture has resulted in some unorthodox business practices over the years. We pride ourselves on our efforts to reduce the
social and environmental impact of the lifetime of the goods and services we produce. This is something that our competitors recognize but do not
focus efforts on; for... Show more content on Helpwriting.net ...
However, once again (as shown in Lost Arrow: Financials, Exhibit III) we have been operating in the black for the last decade. This may also be
explained by our company ethic. We focus on a curbing of consumption and that focus has limited how much we are willing to spend on
advertizing. Conversely our competition holds advertisement as a high priority when establishing sales and brand. This observation is not trivial
and could more than account for the balance between our costs and those of our competitors. 3. Moving Forward As discussed the current model
for Patagonia works. You can be a "dirtbag" and make make money. The question is how do we continue on with the goal of 10% growth per year
for the next five years? Whatever we choose we must operate within that moral fiber that helped us to achieve who we are today. Following are two
suggestions for how to move forward, one uses our current business model, the other proposes a change. Please reference Exhibit I for business model
analysis and Exhibit II for strategy. Strategy: Current Business Model Tactic One: A Focus on Retail– Our best margins are derived from retail sales
however this accounts for just one third of our sales volume. The best type of marketing asset we have are our retail employees. Our Dirtbag
Ambassadors are out there skiing, snowboarding, climbing, camping, bouldering, and living the life that Patagonia wants to be an

Superfood Swap Diet
On Thursday night, viewers fell in love with the new show My Diet Is Better Than Yours. One diet that everyone was impressed with was the
Superfood Swap Diet by Dawn Jackson Blatner. With the Superfood Swap Diet, you still get to eat things you love, but you have to be smart about
everything. New York Post shared about this new hot diet the Superfood Swap that everyone wants to know about after seeing it on the new show My
Diet Is Better Than Yours. Cheering for my friend @djblatner on tonight's premiere of #MyDietIsBetterThanYours. Go Dawn!! ????????
pic.twitter.com/a5AQ1qOyPN – Erica Strama (@ericastrama) January 8, 2016 In the Superfood Swap, you change out things you crave for other
things that are better for you. On the show, she... Show more content on Helpwriting.net ...
This shows you a list of things that you can swap really easy and still feel satisfied. In the Superfood Swap Diet, Dawn recommends having
pistachios instead of pretzels and zucchini noodles instead of pasta. You can have a dark chocolate square instead of eating a chocolate chip
cookie. These superfoods can replace things in your diet without making you feel like you are not getting what you want to eat. She also
recommends eating a frozen banana with a bit of cocoa powder on it or almonds dipped in honey for your sweet tooth. On this new show, there are
five different diets and it is easily proven that different diets work for different people. If you are interested in the Superfood Swap Diet, then you
can learn more as she teaches this diet on the show. Do you think that the Superfood Swap Diet could be the perfect diet for you? Will this help
you to lose the weight and be able to stick with this diet? Sound off in the comments below on your thoughts and don't miss learning more about the
Superfood Swap Diet every week on Thursday night on My Diet Is Better Than Yours. This show is going teach you all about the Superfood Swap
Diet as long as Dawn Jackson Blatner is able to stick around, but so far things are looking good for

The Swap In Okay For Now By Gary Schmidt
The Swap
Through the novel Okay for Now, Gary Schmidt uses the motif of the flight jacket, a successor to Joe Pepitone's jacket, to portray Doug's turn to
adulthood.
When Doug came home after receiving the jacket from Mr. Ballard, he describes that "[the jacket] was the only thing [he] own[s] that hasn't belonged
to some other Swieteck before [him]" (274). This demonstrates that none of his other family members have had a flight jacket in the way that Doug has
and haven't acted like mature adults, thus the flight jacket symbolizing (Doug's) adulthood.
Later on, Doug went to see Mr. Ballard again. There he saw Ernie Eco sitting with his father wearing "[Doug's] Yankee jacket from Joe Pepitone"
(280). This goes to show how Ernie Eco is unlike

Credit Default Swap
Credit default swap
In 2008, the financial crisis hit, which resulted some large financial institution faced the threat of collapse as well as downturns in stock markets
around the world. The credit default swap plays a significant role in the financial crisis, especially the failure of AIG.
Credit default swap (CDS )is a financial instrument that is designed to trade credit risk that a reference entity has credit events, and it is a credit
derivate that is traded over–the–count. There are two sides in a CDS contract –the buyer and the seller. Generally, the buyer needs to pay a periodical
premium to the seller , and in return, if the credit events occur, the seller pay the compensation to the buyer. The credit events refer to defaults of
corporations or debts. The credit default swap was introduced in 1994 and started to be prevalent from 2001. According to the ISDA Market Survey (
2010 ), at the end of 2007, the CDS market size had increased to 62 trillion from 919 billion in 2001.
I. The risk of CDS
CDS a type of credit risk management tool, but it also introduces another dimension of risk–the counterparty risk and systemic risk of the market (
Deutsche Bank Research 2009). The counterparty risk is the risk coming from the default of a counterparty in the CDS. For example, if the reference
entity has the credit events, the buyer can get a payment from the seller. However, if the payment is too large or the seller already has

Goodrich Rabobank Interest Rate Swap Essay example
1.How large should the discount (X) be to make this an attractive deal for Rabobank?
2.How large must the annual fee (F) be to make this an attractive deal for Morgan Guaranty?
3.How small must the combination of F and X be to make this an attractive deal for B.F. Goodrich?
4.Is this an attractive deal for the savings banks?
5.Is this a deal where everyone wins? If not, who loses?
Introduction:
Players: Morgan Bank, Rabobank, and B.F. Goodrich, Salomon Brothers, Thrift Institutions and Saving Banks
Goodrich:
In early 1983, Goodrich needed $50 million to fund its ongoing financial needs. However, Goodrich was reluctant to borrow (short term debt) from its
committed bank lines because of the following reasons:
1.It ... Show more content on Helpwriting.net ...
Invest in short term treasury bills, large CD's of commercial banks.
Floating rate notes of major US banks whose yields were tied to the Treasury bill notes.
Buy Goodrich floating rate notes with a yield tied to the LIBOR.
Structuring of the Swap:
In the swap depicted above the following can be calculated:
1.Goodrich receives the following amount semi annually:
–(LIBOR+0.5%)+(LIBOR–x1)–10.7% = x1+11.2%
2.Morgan receives the following amount as fees: –(LIBOR–x1)+(LIBOR–x2)+10.7%–10.7% = x1–x2.

Note: As stated in the case (footnote #2 on page 362) this fee can be anywhere between 8 basis points and 37.5 basis points.
3.Rabobank receives following amount semi annually: –(LIBOR–x2)+10.7%–10.7% = x2–LIBOR i.e. it will give out LIBOR – x2.
From exhibit 3 the following is also given:
4.Since Goodrich has BBB– credit rating it could raise capital at a fixed rate probably at 12.5% for 7–10 years.
5.Also, Rabobank could raise floating rate debt at LIBOR – 1/8% (LIBOR + Вј% – 3/8%) since it is an AAA rated bank.
Therefore,
6.From (1), and 4, Goodrich saves the following amount in semiannual interest payments : 12.5% – (x1+11.2%) = 1.3%–x1.
7.From (2), and (5) Rabobank saves the following amount in semiannual interest payments: LIBOR – 1/8% – (LIBOR –x2) = x2 – 1/8%.
8.For this deal to occur,

Asset Swaps and Swap Spreads: Interest Rate Strategy
MORGAN STANLEY FIXED INCOME RESEARCH
Morgan Stanley & Co. International Limited
Giles Gale
Primary Analyst Giles.Gale@morganstanley.com +44 (0)20 7677 7121
European Interest Rate Strategy Group
+44 (0)20 7677 7528
July 12, 2005
Interest Rate Products Europe
Asset Swaps and Swap Spreads
Interest Rate Strategy
The spread between swaps and bonds can be traded in many different ways. In this note we describe asset swapping methodologies in detail with
particular emphasis on calculation of spreads, risks, and tracking of trades. The spread of bond yields to swaps is also commonly used to evaluate
richness and cheapness of bonds of differing maturities. In markets where the analytical power of players is ever growing, ... Show more content on
Helpwriting.net ...
An asset swap is an agreement to swap the form of the stream of future cash flows or benefits generated by an asset, typically from fixed to a market
based floating rate such as Libor. The buyer of a bond may prefer floating cashflows as a match for expected future
liabilities, for example. They may also wish to swap a fixed coupon asset in order to reduce the interest rate risk associated with it or to ensure it
better matches liabilities expected to be linked to market interest rates. Similarly, a borrower may issue a fixed coupon bond for demand reasons, but
prefer floating liabilities. This is common, for example with financials.
Organisation Of This Paper

This note has three main sections. In the first part, we detail the mechanics of different asset swapping techniques seen in the market. In the second
part, we assess the value of the information that different methodologies provide on the richness and cheapness of bonds. In the third part of the
note, we explain what we view as the drivers underlying the dynamics of swap spreads. We then discuss how these factors may serve to explain the
differences in swap spreads observed between markets. Finally, we quantify the roles of some of the factors, and illustrate their interrelationships in a
series of simple empirical models based on US and European data.
See additional important disclosures at the end of this report.
2
MORGAN STANLEY FIXED INCOME RESEARCH July 12, 2005 Asset Swaps and Swap

Notes On Vanilla Interest Rate Swaps
Introduction
VANILLA INTEREST RATE SWAPS
It is estimated that about 75% of American companies use derivatives. The main risk remains that most companies do not monitor their position
frequently (Operational) and only few really understand the instruments (Intellectual). Moreover, as an off–balance–sheet item it reduces the public
awareness of such items (accounting). This is the first case that there was a ruling by a judge for derivative instruments. P&G had to pay only $35
million out of the $175 expected losses.
P&G, a leader in cosmetics, infant products, and grocery industries, offered almost 250 products to 5 billion consumers in 130 countries (Procter &
Gamble, Form 10–K 2–3 (1998)).
Liquidating the two contracts cost the company $157 million which is one of the largest losses incurred for an American company. In comparison ,
Metallgesellschaft AG lost 1.36 billion in oil futures. The downside risks involved in these contracts are not fully understood, even by sophisticated
investors.
Chronology
August 1993: As the maturity of an interest rate swap approached what P&G had paid, that is an interest rate approximately equal to CP Federal Funds
Rate – 0.40%, P&G relied on BT for a swap contract replacing the interest rate swap in order to maintain BT's financing structure. Although BT
proposed a swap contract similar to the previous swap structure, P&G refused on account of its inconsistency with P&G's risk factors. (Jongho Kim,
"Lesson From Modern Debacles".)

The Theme Of Nike Foreign Exchange Exposure Essay
I. Introduction
The purpose of this report is to analyze the theme of NIKE foreign exchange exposure. In this research, NIKE financial report 2014 will be used a
fundamental source to analyse the break down of revenue according to market or segments of Nike.
Nike Enterprise possesses heaps of segments all over the world such as North America, Central & Eastern Europe, Greater China, Japan, and Emerging
Markets. In addition, there are also manifold merchandises manufactured and distributed beyond the United States. Hence, large amount of purchase
and sale transactions in different currencies are executed by Nike enterprise. If foreign currency exchange rates and interest rates waver, Nike
enterprise may suffer a decline in revenues, growth in cost, and lower margins and earnings.
There are lots of methods to solve the changes in foreign currency and interest rates issue, however, derivative financial instruments are the major tunes
Nike enterprise has used to tackle this issue. Despite the fact that this approach does not wipe out comprehensively the risk of foreign exchange, Nike
enterprise still utilize it to minimize or delay the negative consequences. Specifically, the derivative financial instruments comprise embedded
derivatives, interest rate swap, and foreign exchange forwards and options contracts (Nike annual report, 2014).
Research questions: To begin with, I would like to analyze NIKE foreign exchange exposure management using foreign currency derivative by the

The Financial Meltdown Of 2008
The Lehman Brothers scandal is what many consider to be the catalyst that started the financial meltdown of 2008. This paper is meant to look at
what took place during the start of the meltdown and what caused Lehman to fail. Who was involved? What caused one of the largest banking
institutions in history to fail? What could have been done differently? These are a few of the questions I'd like to address in the next few pages. In
the Fall of 2008 things were starting to look bad for Lehman Brothers. Much of their investments were in the housing market which was beginning to
fall, and fall hard. On Friday September 12, Hank Paulson the US Treasury Secretary under President George W. Bush, flew to New York for a
meeting regarding ... Show more content on Helpwriting.net ...
Fulds goals were essentially to "overtake rivals" like Goldman or Merrill who had been in the game for a long time, using borrowed money was his
solution to this. In 1994, right around when Dick Fulds was appointed CEO, Lehman shares were valued at $4/share, by 2007 at Lehman 's peak,
shares were valued at a staggering $84/share. This massive growth was primarily attributed to Lehman's expansion into other more complex
investments, including credit default swaps. As defined by Investopedia, "A credit default swap is a particular type of swap designed to transfer the
credit exposure of fixed income products between two or more parties. In a credit default swap, the buyer of the swap makes payments to the swap's
seller up until the maturity date of a contract. In return, the seller agrees that, in the event that the debt issuer defaults or experiences another credit
event, the seller will pay the buyer the security's premium as well all interest payments that would have been paid between that time and the security's
maturity date." At the time this was seen as a normal practice, but firms began to speculate with these swaps and this is what ultimately caused many
large financial firms like AIG to collapse. Risk was the name of the game and was how Lehman began to operate under Fuld. It was believed that the
firms creating these complicated risky investments were distributing risk wide

The Swap: A Fictional Narrative
The Swap "Come on, guys, we will be late for class!" Sydney complained. As the six friends were sprinting down the hall, nearly late for class at Peace
Lutheran, Johanel tripped on a hidden metal latch.
"What was that?" Kaitlyn asked, stopping to help Johanel up from the floor.
"I have no idea," Ava responded.
"Should we open it?" Nikolette questioned.
Sydney exclaimed, "No! It looks super dangerous!"
Johanel, looking slightly frightened, added, "What would even be down there? Think about how much trouble we would get ourselves into."
With a small grin, Ava shouted, "We should open it! I call going in first!"
"Not before me!" Kaitlin Lewis exclaimed.
"I was going to go first, Lewis!" sighed Ava.
With a deep breath, Lewis opened the trapdoor. She peered down at the dark abyss below her. "Woah," she whispered in awe,"I never knew you could
find something like this in a dumb school." Sydney shifted around to get a glance, and accidentally nudged Kaitlyn forward. With a shriek, she slipped
into blackness, her figure disappearing in a millisecond. ... Show more content on Helpwriting.net ...
Are you okay?" Her normally quiet voice bounced around underneath, but there was no answer.
A sudden realization hit Nikolette, and she began to speak. "Guys, this means it's a tunnel! It seems to slope downwards, so it's more of a slide..." She
drifted off into her own thoughts. "We need to find Kaitlyn!" Ava interrupted, her face a mixture of excitement and a small twinge of fear. With a gulp,
Sydney slid down the mysterious tunnel, followed by Ava, Lewis, Nikolette, and

An Analysis Of The Trading Of Derivatives
Kevin Cone and Madison Schaefer
Professor Nutting
Management 6
December 12, 2014
"An Analysis of Trading in Derivatives"
12 years ago, Warren Buffett warned that derivatives were "financial weapons of mass destruction" (Lenzner). 6 years after he made this statement,
derivative traders helped induce the biggest financial crisis in America since the Great Depression. Derivatives are highly complex financial instruments
that have fundamentally changed the way we perceive finance. Trading these derivatives has caused a financial revolution that has generated both a
huge amount of potential, and an an equally huge amount of risk. Derivatives, in a nutshell, are highly complex financial instruments whose values are
dependent on, calculated ... Show more content on Helpwriting.net ...
Because companies have the ability to swap an extensive variety of things, swaps are often overarchingly defined as "an exchange in future cash
flows" (IP). One common type of swap is an interest rate swap. In this case, a company agrees to swap some or even all of their interest rate
payments with another company. Interest rate swaps can occur because companies with different backgrounds and reputations will usually generate
different credit ratings. These credit ratings often correspond to differing interest rates charged by lenders. For example, an established and reliable
company may experience a high credit rating and receive a fixed interest rate, while a newer and more opaque company may experience lower credit
ratings and receive a variable interest rate. These companies can opt to swap interest rate payments if each believes that the opposing party's interest
rate setup will eventually turn out to be more advantageous in the long–run. In effect, these companies are utilizing a comparative advantage in order to
achieve their financial goals.
Another example of a swap is a credit default swap (CDS). By selling CDS contracts, banks offer an extremely attractive option to people who are
lending money to major companies. A credit default swap contract basically ensures a lender that a bank will financially cover all of his/her losses if
his/her lent credit were to somehow default. The bank will do this in exchange for regular payments

Inside Job 2010 Directed By Charles Ferguson
International business is the most desirable and vital phenomena in today's modern world. Most individuals know that International Business is the
necessity for the prosperity of our world. No one can prosper without performing business internationally. When learning of how other countries
conduct International Business, a company can expand their market to appeal to citizens of these places. However, being as close knit as we are to
other countries, not everyone holds the same values. Every business' goals is to make profit and if one company acts in an unethical matter, that will
create a downfall domino effect. This statement holds truth for the result of the financial/banking crisis that occurred in 2008 because of many errors
that were made unethically and eventually affected many other countries around the world and their living conditions. The documentary Inside Job
2010 directed by Charles Ferguson is without a doubt a very effective film documentary. It did an outstanding job of giving more insight on the
banking crisis in 2008 and how it created a domino effect leading to global recession. In all honesty, this film did not shock me at all in terms of how
corrupt the financial industry in the United States is. What I found humorous in this documentary, were the moments throughout the film where most
of the important questions to be answered followed with the next screen that said "____ declined to be interviewed for this film". However, besides the
partial humor,

The Big Short ' Is A Financial Crisis Movie Directed By...
"The big short" is a financial crisis movie directed by Adam McKay and released in 2015. It bases on a truth story that some smart investors bet
against the United State mortgage market in 2006 to 2008. Michael Burry, an eccentric hedge fund manager, discovered with his own research that the
United State housing market was a bubble about to burst within in a couple years. He started to bet against the United State mortgage backed securities
market by convincing some large banks to create a credit default swap market, which was kind of a bond insurance police, and he invested about $1,3
billion in the credit default swap market. If he was right about the market collapse, his fund would bust up very high and make a hug profit. On the
other hand, his fund would be gone if the market stay stable.
Through Michael Burry's idea and action, the banker Jared Vennett who worked at Deutschebank quickly learned and understood that Burry's
predictions was likely true, and he made himself an opportunity of earning fees on selling those credit default swap to the firms, which the firms could
earn profit when the underlying mortgage bonds fail. He came to Mark Baum office and tried to convince him to buy credit default swaps. His
explanation about the market collapse would being more perpetuated by the packaging of subprime loans into collateralized debt obligations (CDOs).
Through Vennett's convincing, Mark Baum and his associated started to investigate the Miami housing market. He first

Wishful Thinking Meets Reality : Rhetorical Analysis
Wishful Thinking Meets Reality:
Rhetorical Analysis
Everyone can relate to a time in their life when they desired a "picture–perfect" life with lots of friends and all the material things they could wish for
themselves. However, they realize that maybe the "picture–perfect" life isn't what they expected once it becomes reality. In the films Freaky Friday and
13 Going on 30, the audience follows the lives of the protagonists as they face their wishes to have a "better life". Throughout the essay, we will
examine the audiences, goals, and strategies of these two films, in which we will decide what movie demonstrated the finest job of using the elements
to convey the story.
The remake of the original film, Freaky Friday, was released in 2003. The movie is filled with drama and laughter as the main character Anna
Coleman must live her life in her mother's body as her mother lives as the daughter, due to a spell cast on them from a fortune in a fortune cookie.
Anna's mother, Tess Colman, and she must learn to adapt to each other's everyday lives and figure out how to get back to their normal life. The
movie 13 Going on 30 follows main character, Jenna Rink, as she makes a wish at her thirteenth birthday party to become an adult. The next morning,
Jenna finds herself as an adult and she attempts to live as a responsible adult. In both movies the audience will follow the characters as they discover
that sometimes what you wish for may come true, in which it may not

Questions On Mortgage Backed Securities And Credit Default...
Mortgage backed securities and credit default swaps are words we often hear in reference to the Great Recession of 2008. In this paper, I will be
discussing and analyzing an analogy Tim Harford uses to discuss the probability of buying a carton of eggs with an egg having a double–yolk to what
mortgage–backed securities and credit–default swaps meant and represented. In chapter 6 of the updated book, The Undercover Economist, a lady
named Fiona Exon is mentioned. In early 2010 she bought half a dozen eggs and discovered all 6 of them had double yolks. According to the
British Egg Information Service the chance of any given egg having two yolks is one in a thousand and for each one of the 6 eggs you keep
multiplying this probability and get a probability of one in a quintillion (thousand raised to the power of 18). This was reported to the media and
surprisingly more people called in to report discoveries of half a dozen double yolk eggs. This event that was known to be very rare was not really
that rare. The calculation, in reality, was wrong as they had made a wrong assumption that eggs with double yolks only come in clusters, increasing
the chance of seeing 6 double yolk eggs by a million billion fold with this simple assumption. So knowing that there was a really high probability of
ending up with half a dozens of double yolk eggs, Fiona Exon's friendly local egg retailer came up with a clever marketing wheeze and offered a
million–pound jackpot to any customer who

What Are The Differences And Similarities Between FX And...
Swap
Q1: Where did the swap market originate? And why?
The earliest SWAP market originated in the United Kingdom in the 1970s. The main purpose of this market is to circumvent the foreign exchange
controls adopted by the British government. The first swap is a change in the currency swap. The British government taxes foreign exchange
transactions involving sterling. This makes it more difficult for capital to leave the country, thereby increasing domestic investment.
Q2: Why Swaps are so popular? What is their economic rationale?
Interchanges help to limit or manage the volatility of interest rates, and swap yields lower interest rates than would have been available to the company.
Swaps are used because domestic companies usually get better ... Show more content on Helpwriting.net ...
Interest rate swaps include the exchange of interest payments, while currency swaps include the exchange of the same amount of cash in one currency.
Interest rate swaps are financial derivative contracts where both parties agree to exchange interest rate cash flows
Q8: What is the combination of FX and interest rate swap called? How many swap types can you construct by mixing the basic flavors?
The combination of FX and interest rate swaps is called CIRCUS. In terms of their magnitude importance, the five common types of swaps are:
interest rate swaps, currency swaps, credit swaps, commodity swaps and stock swaps. There are many other types of swaps
Q9: Swaps are important risk management tools. How would you use swaps in the following situations (give an example and describe the swap type)
For example, consider an ordinary fixed interest rate floating interest rate swap, Party A pay a fixed rate, Party B pay a floating rate. In such an
agreement, the fixed interest rate should be such that the present value of the future fixed interest rate paid by Party A is equal to the present value (ie,
the net present value is zero) paid by the expected future variable interest rate. If this is not the case, then arbitrator C

Advantages And Disadvantages Of Futurisation
Introduction
Swaps in simple language means, the act of exchanging one thing for another. In financial terms it means an agreement in which two parties agree to
exchange series cash flows at some future times according to terms stated in the agreement (Chance and Brooks 2012). They are derivatives because
their value is ascertained from some other financial instrument, such as a loan or bond. Swaps are generally priced based on a notional value, which
is the dolВ¬lar value of a contract. The most common type of swap is the interest rate swap in which the two parties agree to enter into an agreement
which involve the exchange of payments of fixed rate interest for the payments of floating rate interest or vice versa in the same currency calculated by
reference to a mutually agreed notional ... Show more content on Helpwriting.net ...
For examples this disparity may arise in fixed coupon rates. The company may be exposed to other risk, if it does not have an exact or close enough
match for the risk being hedged. In realty these futures contract may not adequately hedge risk and this would lead increase in earnings volatility and
the company may face greater risk (Banwait 2013).
Increased risk for clearing house
The margins on swap contract are calculated differently and are higher than futures contract which has led to the migration of swaps to futures. The
volume of transactions cleared by futures clearing house has risen significantly as the movement of swaps to futures take place. But as this volume
increases, the futures clearing house can be exposed to a greater risk of failure (Litan 2013).
Lack of

Making Of A Melodram Style Swap
Making of a Melodrama: Style Swap
Like a true symbolist drama, the goal of Interior was to put on stage what could not be expressed purely through rational language. In addition,
Symbolist theater put focus on the atmosphere as opposed to the plot which is evident in Maeterlinck's play Interior. Since symbolist theater is
interested in the internal landscape of the subconscious, mood and atmosphere were more important than exciting reversals and climaxes The major
conflict in the plot of Interior by Maurice Maeterlinck, the Old Man is working up the courage to tell the family that one of the daughters has drown.
The plot of the play is fairly simple because Maeterlinck's intention for the play was to peer into ordinary life and focus on the elements that people
tend to overlook in day–to–day life. This is one of the major elements that makes this play purely symbolists and not close to a melodrama. In order to
make this play into a melodrama three major elements would need to change: addition of spectacle in the presentation of the play, comedic relief to
offset the serious plot, and the addition of background music.
Adding Spectacle
The play Interior is driven by the death of one of the families daughters. One way to add spectacle to this play to swap the style from symbolist to a
melodrama, would be to add a prologue that details the daughter's death. The purpose of spectacle is to animate the desired audience emotional
response. By having a brief prologue that shows

Eisman Assisted Suicide Chapter Summary
In the beginning of the book it begins with an introspective look at the analyst equity in Wall Street. Shortly after Eisman had working as a broker,
a sublime mortgage crisis had happened with Aames Financial and it went public. The lenders of this company's purpose was to give home equity
loans to customers with low credit. As Eisman soon discovered that these companies weren't even making any money, basically just shuffling around
paper, so it appears as if they do. He hired a guy named Vincent Daniel and had him do some digging in the paper work. Six months later Daniel
comes to a find that the Sublime loans are prepaying prematurely, Eisman took it public in 1997. Around 2004 Michael Burry a stock market investor
was determined to sell... Show more content on Helpwriting.net ...
He also had help from a colleague and on secondary source, a undergraduate students thesis paper. These sources supported the Lewis's thesis because
they are factual. The whole book is evident on the sources he used. The sources are also evident on pages 312–325, in the acknowledgments. One these
pages Lewis shows his gratification to their cooperation and shows evidence he used throughout his book. Lewis diving so deep into these men's lives
and using his own exposure to write such a captivating book conveys an outstanding impression on how his thesis is successfully

The Impact of Financial Derivatives Market on the Uk...
Research Proposal:
1–Provisional title: The impact of Financial Derivatives market on the UK economy–: Before, during and after the 2008 Financial crisis.
2–Rationale
The operations of the derivative market has become a rising concern today in the world and in the UK in particular as this market could destabilize
the efficiency of the financial market and the economy at large if not managed properly by its users or if a major fault occurs in the derivative market, as
it plays a vital role as a risk management instrument in the economy. Financial derivatives had been introduced in the financial markets as an instrument
to help manage risk cause by fluctuations in exchange rates, interest rates and stock market prices in the financial ... Show more content on
Helpwriting.net ...
He based his research on what was he called the real and behavioural triggers of the 2008 financial crisis. He then went on to say that the real triggers
of the crisis had to do with the systematic environment of high leverage in the financial markets, corporate and household sectors and the international
nature of finance and banks balance sheets. He classified the underestimation of risk by almost all agents in the economy as a behavioural trigger to
the crisis. He specified on the underestimation of risk in the newly issued assets and also in the corporate sector leverage that began in the 21st
century. According to him, new and complex derivatives instruments were not mostly regulated before the crisis of 2008, which he suggested could
have been the trigger to the crisis. He concluded that some of the triggers like the behavioural trigger could only be incorporated into the new bank
regulations as they would not change.
Another study carried out by Shiu Yung–Ming et. al. (2005), examined the determinants and the impact of derivative usage on bank risk. In their
study, they said derivatives had proved to be an efficient tool in the management of risk as it was an easy instrument for which residual risk from
commercial operations was hedged. They agreed with most researchers by saying that derivative usage was a primary instrument used by both financial
and non–financial firms for the management of their financial risks. Thus they came to a realisation that the use of

Social Observation : Swap Meet
Social Observation: Swap Meet The social observation took place in Kam Swap meet in Pearlridge. Kam Swap meet is an open market where
farmers can rent booths to sell their products. The swap meet is not only for produce, some sellers also sell their old household and personal items
for bargain prices similar to a garage sale. My grandpa has a booth and he sells bananas, every weekend my mom and I assist my grandpa with the
booth. I observed and took notes for half an hour on the customers that came to buy in our banana booth. During the observation, there were 27
individuals who came into our banana booth. There were a family of five; a family of three with a toddler boy. I noticed that these two families both
have younger children. The family of five had a baby in a stroller and two girls around the age of 9–11, while the family of three has toddler boy. The
family of five, only the mother came inside the tent to pick bananas while the father stayed outside with the children. The family of three, both parents
and the toddler came in and they collectively picked a banana bunch to purchase. The parents also encouraged their son to participate in choosing which
banana to buy. There were also singular parents who came with only their children and not their spouses. There were two mothers, one of them has
two sons and the other mother has a son and a daughter. The mother with two sons, (one teenager boy and one boy between the age of 7–9) both sons
carried the equal amount

Fair Value Hierarchy
Memorandum to: Accounting department of family finance co. from: Daisy subject: fair value hierarchy date: december 15, 2012
Introduction
Family Finance Co. (FFC), a publicly traded commercial bank, invests in a variety of securities in order to enhance returns greater than interest paid on
bank deposits and other liabilities. The primary investments of FFC are collateralized debt obligation, mortgage–backed securities, auction–rate
securities, equity securities in nonpublic companies, interest rate swaps, and a fuel swap for gasoline. FFC measures the derivative at fair value,
presenting the portion of the fair value change by using the fair value hierarchy. This memo will present the appropriate classification in the fair value ...
Show more content on Helpwriting.net ...
Also, as of the measurement date, there is lack of recent and relevant transactions. Thus, the fair value measurement of this CDO should be classified as
Level 3. By analyzing the market changes, FFC determined that the CDO's market was not active and there has been a significant decrease in the
volume and level of activity. FFC used an income approach valuation technique which is present value technique to make measurement. Because this
approach can maximize the use of relevant observable inputs and minimizes the use of unobservable inputs to reflect the fair value more
representatively.
Instrument 2 –Mortgage–Backed Security The fair value measurement of the Mortgage–Backed Security investment shall be categorized within Level 2
of the fair value hierarchy. According to ASC 820–10–35–52, "Level 2 inputs include the following: a. Quoted prices for similar assets or liabilities in
active markets". These inputs included quoted prices in active markets for similar MBSs with insignificant adjustments for differences between the
MBS held by FFC and similar securities. In Q4 of 2012, the prices for transactions didn't reduce the relevant to the fair value measurement. Therefore,
the fair value measurement of this MBS should be classified into Level 2 of fair value hierarchy. The market of Mortgage–Backed Security

Essay on Bank One / Rabobank
Bank–one / Rabobank
1.What is the problem? Why might investors be so concerned about the bank's derivative use?
The problem is that Banc One's stock price has gone down nearly 25% due to analyst and investor concern that increased derivative use has inflated key
accounting margins and ratios. The derivatives (interest–rate swaps) do not show up on the balance sheet as assets/liabilities, but do show up on the
income statement. Therefore, metrics such as ReturnOnAssets may not accurately reflect the underlying business.
Derivative use was concerning to investors mainly because they did not fully understand the complex swaps, and saw them as risky. Banks had not
typically invested so heavily in swaps, so investors felt that Banc ... Show more content on Helpwriting.net ...
3.Why is Banc One liability–sensitive? Should it be?
Banc One is liability sensitive in that earnings are impacted conversely to interest rate movement. They chose to balance this way because CIO Dick
Lodge felt that banks, due to a normally upward–sloping yield curve, are paid to be liability–sensitive.
The decision to position itself as liability–sensitive does make sense. As interest rates fall, the banks tend to lose revenue (due to prepayment of
loans), even though this is when the more people will want to take loans and fewer will want to purchase CDs. So to put itself in a position to
increase earnings in this case is correct to me. But the bank should not leave itself exposed to major interest rate risk, so should be close to neutral.
4.What are the bank's alternatives for managing interest–rate exposure?
Then bank could:
a)Add fixed–rate assets to it books. For example, they could purchase fixed–rate municipal bonds or Mortgage Backed Securities.
b)Add floating–rate liabilities to its balance sheet. This may be in the form of offering floating rate bonds to customers.
c)Invest in interest swap derivatives. These synthetic investments would allow Banc One to receive fixed–rate payments, while paying out floating–rate.
d)Structure its acquisitions incorporate more liability–sensitive banks to

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