Financial Markets, Institutions & Instruments

Running head: FINANCIAL MARKETS AND INSTITUTES
Financial Markets and Institutes
Name of the Student:
Name of the University:
Author Note

1FINANCIAL MARKETS AND INSTITUTES
Table of Contents
Assignment One:........................................................................................................................4
Question 1:.................................................................................................................................4
a) Providing confirmation on the share price of Rentokil should be purchased:.......................4
b) Indicating whether investments in the organisation is viable after analysing the beta:.........4
c) Explaining whether there is a probability for the off-setting capital gains:...........................4
d) Stating the significance of financial ratios while making investment decisions and
detecting different models that could be used:...........................................................................5
Question 2:.................................................................................................................................5
a) Calculating the five-year average expected inflation rate:.....................................................5
b) Indicating the nominal yield of Central Bank of Egypt that can be offered on 5-year
Treasury Bonds:.........................................................................................................................5
c) Providing the yield curve and indicating about the maturity premium to increase sentiment
might the force:..........................................................................................................................6
d) Stating how the yield curve have shifted if the inflation rate is 10%:...................................7
e) Highlighting the sort of yield curve that would be observed if the rate falls by 10% per
year:............................................................................................................................................7
f) Explaining the impact of Pure Expectations theory may not hold and its factors:.................8
Assignment Two:.......................................................................................................................9
Question 1:.................................................................................................................................9
a) Indicating why sensitivity analysis if assets and liabilities in a financial institutions:..........9

2FINANCIAL MARKETS AND INSTITUTES
b) Depicting the actions that would be taken when the time-weighted value of assets is
different from that of liabilities:.................................................................................................9
c) Stating the meaning of Liquidity Matching and the important to an institution:...................9
d) Stating whether financial futures as a method of hedging should be used by Nationwide: 10
Question 2:...............................................................................................................................10
a) Stating the Index Option contracts, where it hedges the entire portfolio:............................10
b) Stating the ways in which the portfolio could be prepared, where losses are not more than
2%:...........................................................................................................................................10
c) Indicating the ways in which different measures could be used for covering the cost of
purchasing the options:............................................................................................................11
Assignment Three:...................................................................................................................12
a) Identifying the additional measures that need to be imposed for regulating such
institutions:...............................................................................................................................12
b) Indicating whether the regulations, where sufficient capital to protect solvency:...............12
c) Indicating whether there is emphasis capital adequacy and controlling risk:......................13
d) Stating relevant regulations for addressing the “to big to fail” problem:............................13
e) Stating whether commercial and investment banking should be separated:........................13
f) Stating whether shadow banking and even entry by the Tech giants (Alibaba, Amazon,
Google) be allowed:.................................................................................................................13
g) Stating whether “risk-weighting” of assets, the correct approach or does it have unintended
consequences:...........................................................................................................................14
h) Stating whether minimum capital requirements, promoting market discipline and
supervisory review:..................................................................................................................14

3FINANCIAL MARKETS AND INSTITUTES
i) Stating whether the supervisor regulation and prudential regulation correct:......................15
References:...............................................................................................................................16