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    NORTHCENTRAL UNIVERSITY ASSIGNMENT COVER SHEET Student: Terry Donnell McKinney   THIS FORM MUST BE COMPLETELY FILLED IN Follow these procedures: If requested by your instructor, please include an assignment cover sheet. This will become the first page of your assignment. In addition, your assignment header should include your last name, first initial, course code, dash, and assignment number. This should be left justified, with the page number right justified. For example: DoeJXXX0000-1 1 Save a copy of your assignments: You may need to re-submit an assignment at your instructor’s request. Make sure you save your files in accessible location. Academic integrity: All work submitted in each course must be your own srcinal work. This includes all assignments, exams, term papers, and other projects required by your instructor .  Knowingly submitting another person’s work as your own, without properly citing the source of the work, is considered plagiarism. This will result in an unsatisfactory grade for the work submitted or for the entire course. It may also result in academic dismissal from the University. FIN-7013   Dr. Riyad Abubaker Investment Portfolio Analysis Week 1 - Assignment: Evaluate Financial Markets, Securities, and Institutions Along with Associated Risks Faculty Use Only <Faculty comments here> <Faculty Name> <Grade Earned> <Date Graded>  McKinneyT_FIN7013-1   Week 1 - Assignment: Evaluate Financial Markets, Securities, and Institutions Along with Associated Risks FIN-7013 Investment Portfolio Analysis Week 1 Assignment 1 Terry D. McKinney Dr. Riyad Abubaker August 25, 2019  McKinneyT_FIN7013-1   Abstract Financial engineering has been disparaged as nothing more than paper shuffling. Critics argue that resources used for rearranging wealth (that is, bundling and unbundling financial assets) might be better spent on creating wealth (that is, creating real assets). This paper evaluates this criticism, and discusses any benefits realized by creating an array of derivative securities from various primary securities. The paper will also discuss why you would expect securitization to take place only in highly developed capital markets. Finally. The paper will touch on the relationship between securitization and the role of financial intermediaries in the economy, and the end results to financial intermediaries as securitization progresses.  McKinneyT_FIN7013-1   Introduction The managers of public firms are drawn to developmental transaction or financial interpretation of accounting standards, to  present management’s earnings, balance sheet , and cash flow requirements, though it may possible circumvent the true meaning of standard setters  by way of accounting-motivated financial engineering. When standard setters doctor up  predominant standards to combat prepared financial engineered predictions, it starts a turnabout reaction for preparers of financial engineering reports to respond, causing a back and forth game effect (Dye, 2015). As such, financial engineering has been disparaged as nothing more than paper shuffling. Critics argue that resources used for rearranging wealth (that is, bundling and unbundling financial assets) might be better spent on creating wealth (that is, creating real assets). This paper evaluates this criticism, and discusses any benefits realized by creating an array of derivative securities from various primary securities. The paper will also discuss why you would expect securitization to take place only in highly developed capital markets. Finally. The paper will touch on the relationship between securitization and the role of financial intermediaries in the economy, and the end results to financial intermediaries as securitization progresses. What is Financial Engineering Financial engineering incorporates the use of mathematical concepts as means to determine solutions to financial situations. Financial engineering includes resources from the areas of computer science, statistics, economics, and applied mathematics to address present financial issues, in addition to development of new and innovative products. Often referred to as quantitative analysis, financial engineering is a commonly used resource of commercial banks, investment banks, insurance agencies, and hedge funds (Tuovila, 2019).  McKinneyT_FIN7013-1   Financial industries constantly search for ways to establish and innovate investment tools and products to be used by their investors and companies. Most of these products are developed through methods in the area of financial engineering. By using mathematical modeling and computer engineering, financial engineers can exam and present newer tools and resources to  perform investment analysis, debt offerings, new investments, new trading strategies, new financial modeling, and so forth. In a nutshell, financial engineers operate quantitative risk models that predict how investment tools will perform and whether a new offering in the financial sector would result in long-term viability and profitability, as well as the specific types risk possibilities for each  product offering with regards to the volatility of the markets. Financial engineers I mostly found to be working a proprietary trading, risk management, portfolio management Camera microfinance departments from within the companies they work for. Criticism of financial engineering Financial engineering revolutionized financial markets as it played a major role in the 2008 financial crisis. While numerous defaults in subprime mortgage payments increased, an increase in credit events was also triggered. financial institutions we're unable to make payments on these swaps as the default regarding the situations were happening nearly simultaneously. As a result, corporate buyers that had invested in mortgage backed securities would realize they would become worthless. These encouraged losses We give them the excuse to reduce the value of assets on their balance sheets, which will lead to additional failures from a corporate standpoint , any subsequent economic recession (Tuovila, 2019). Because the 2008 global recession brought on by engineered structured products, Financial engineering is often regarded as a controversial field subject. Nonetheless, it goes without saying that this quantitative study
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