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What is a credit risk when entering into a derivative contract?
Credit Risk. Credit risk or default risk evolves from the possibility that one of the parties to a derivative contract will not satisfy its financial obligations under the derivative contract.
Advantages of operating in forward market?
Forward market allows the dealers to concentrate on their core line of business because they don't bother themselves with the risk of currency exchange. There is no premium paid upfront on forward contract as compared to futures and options.
Does a T-Bond have a default risk premium?
yes
What are the main terms of a first mortgage?
The Keywords or main terms of a first mortgage are "Mortgage", "Lender", "default", "liens", "property", "borrow", "collateral", "risk", "contract" and secondary words for the matter could be "Agent", "Money" and "banks".
Brief information about voluntary assumption of risk?
To voluntarily assume a risk is to agree to take on some potential cost which may arise.
What is a credit risk when entering into a derivative contract?
Credit Risk. Credit risk or default risk evolves from the possibility that one of the parties to a derivative contract will not satisfy its financial obligations under the derivative contract.
What strategy the Indian importer needs to follow to hedge the exchange risk?
it is better to go for forward contract
What are the advantages and disadvantages of forward contract?
Forward Contracts:Advantages- Can be written for any amount and term- Offers a complete hedgeDisadvantages- Difficult to find a counterparty (no liquidity)- Requires tying up capital- Subject to default riskFutures Contracts:Advantages- Lots of liquidity- Position can be reversed easily- Doesn't tie up much capitalDisadvantages- Written for fixed amounts and terms- Offers only a partial hedge- Subject to basis risk (bond issuer can default)
Advantages of operating in forward market?
Forward market allows the dealers to concentrate on their core line of business because they don't bother themselves with the risk of currency exchange. There is no premium paid upfront on forward contract as compared to futures and options.
What are amount of payments before reposseion takes place?
Read your contract. It should specify what results will happen when the contract is in DEFAULT. Legally, ONE (1) DAY in default. DONT GAMBLE. Face the facts and plan for a future based in REALITY. TECHNICALLY AFTER ONLY ONE DAY YOU ARE IN DEFAULT OF YOUR CONTRACT, USUASALLY A FINANCE COMPANY WILL WAIT UNTIL YOU ARE 30 DAYS PAST DUE. UNLESS YOU ARE A HIGH RISK CUSTOMER, THEN REPOSSESSION USUALLY OCCURS WITHIN 15-20 DAYS. THIS IS IN MICHIGAN
What is forward premium How does the forward market help in reducing currency risk in international business?
The forward premium arises due to interest differentials between two currencies. In order that the two currencies have the same intrinsic values as they have today and avoid interest arbitrage, the premium/discount comes into effect.The forward rate includes the forwrd premium/discount and so the risk of spot market moving in the wrong way is minimised by entering into a forward contract.
Having contractor take accountability for the risk by using a firm-fixed price contract?
By using a firm-fixed price contract, the contractor is held accountable for any unforeseen risks or additional costs that may arise during the project. This type of contract specifies a set price that the contractor must adhere to, regardless of any fluctuations in the market or unexpected circumstances. It ensures that the contractor bears the responsibility for managing risk and delivers the project within the agreed-upon budget.
Does a T-Bond have a default risk premium?
yes
What is Interest rate on mortgage?
It will depend on the lender and the risk of default.
What are the main terms of a first mortgage?
The Keywords or main terms of a first mortgage are "Mortgage", "Lender", "default", "liens", "property", "borrow", "collateral", "risk", "contract" and secondary words for the matter could be "Agent", "Money" and "banks".
How does financial risk arise?
When you spend too much money on philipeno hookers
How risky are junk bonds mutual funds?
Extremely Risky. Some of the risks involved in investing in Bonds are: 1. Interest Rate Risk 2. Re-investment Risk 3. Call Risk 4. Default Risk & 5. Inflation Risk The Default Risk is the highest risk factor wherein you may not get your money back and in case of Junk Bonds this is extremely high, that is why they are called Junk Bonds Junk Bonds refer to Bonds issued by company's with low creditworthiness and past history of default in payments
