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What are the characteristics of credit?
1. it is a bipartite contract 2. the contract is personal in nature 3. the contract has a pecuniary nature 4. there is the presence of trust and confidence 5. credit is risk 6. futurity 7. creation of legal obligation 8. the transfer of ownership or title
How can derivatives be used to reduce risk?
A derivative contract is a form of abstract alternative investment, and includes options, futures, and swaps. The establishment of the derivative was caused by government intervention into capital markets in the form of exccess laws, regulations, and subsidies; when this occured, it made the marketplace more unstable by adding the variable of government policy and action. When government is able to usurp control over equities, portfolio's, and other tangible assets, traders developed abstract alternative investements as a hedge against this risk by allowing bets on the movement and health of said assets.The derivative allows the user to hedge or mitigate risk in an underlying asset, wether it be equities, foreign exchange, interest, commodity, or credit.
How does one apply for a Chase credit card?
First, contact Chase and give them your information. Then they will contact the credit people to determine whether or not you are a credit risk. Then they will decide whether you are worth the risk. Usually, the will give you a card, allow you to charge up a great deal of debt, and then sell this debt as part of a derivative security on the open market. When you default, the market will crash.
What does insuffiecient credit means?
That there is not enough information reported to the credit bereau yet to calculate a rating or risk. It usually applies to young adults who have not yet had a credit card, auto loan, or other contract which requires payment under specified criteria.
What are potential security risks in online credit card processing?
The greatest risk is personal identity theft, which is when an individual can take your credit card number and use it for their own purposes. You need to make sure your site is secure before entering any credit information.
What is a basic risk when entering into a derivative contract?
Basis Risk. This is the spot (cash) price of the underlying asset being hedged, less the price of the derivative contract used to hedge the asset.
What is a market risk when entering into a derivative contract?
Market Risk. This is the potential financial loss due to adverse changes in the fair value of a derivative. Market risk encompasses legal risk, control risk, and accounting risk.
What has the author Manuel Ammann written?
Manuel Ammann has written: 'Credit risk valuation' -- subject(s): Credit, Credit ratings, Management, Risk management 'Pricing derivative credit risk' -- subject(s): Derivative securities, Prices, Mathematical models, Credit, Risk
What does a credit derivative refer to?
A credit derivative is a financial instrument which separates and transfers some of the credit risk of a loan. Some examples of credit derivatives are credit linked notes or credit default swaps.
What is an embedded derivative?
A component of a hybrid security that is embedded in a non-derivative instrument. An embedded derivative can modify the cash flows of the host contract because the derivative can be related to an exchange rate, commodity price or some other variable which frequently changes. For example, a Canadian company might enter into a sales contract with a Chinese company, creating a host contract. If the contract is denominated in a foreign currency, such as the U.S. dollar, an embedded foreign currency derivative is created. According to the International Financial Reporting Standards (IFRS), the embedded derivative has to be separated from the host contract and accounted for separately unless the economic and risk characteristics of both the embedded derivative and host contract are closely related.
What has the author Bernd Schmid written?
Bernd Schmid has written: 'Credit risk pricing models' -- subject(s): Bonds, Credit, Derivative securities, Management, Mathematical models, Prices, Risk management
What are the characteristics of credit?
1. it is a bipartite contract 2. the contract is personal in nature 3. the contract has a pecuniary nature 4. there is the presence of trust and confidence 5. credit is risk 6. futurity 7. creation of legal obligation 8. the transfer of ownership or title
In finance what is antonym of risk taker?
Risk shedder. For example, in a CDS contract one party buys credit protection (the risk shedder) while the other one sells the protection (the risk taker).
How can derivatives be used to reduce risk?
A derivative contract is a form of abstract alternative investment, and includes options, futures, and swaps. The establishment of the derivative was caused by government intervention into capital markets in the form of exccess laws, regulations, and subsidies; when this occured, it made the marketplace more unstable by adding the variable of government policy and action. When government is able to usurp control over equities, portfolio's, and other tangible assets, traders developed abstract alternative investements as a hedge against this risk by allowing bets on the movement and health of said assets.The derivative allows the user to hedge or mitigate risk in an underlying asset, wether it be equities, foreign exchange, interest, commodity, or credit.
Why is a credit check required for contract phones?
Signing up for a contract phone is a binding agreement between two parties. The customer is expected to make monthly payments, per the contract. Poor credit scores indicate the customer may pose a risk to not pay these monthly bills.
How does one apply for a Chase credit card?
First, contact Chase and give them your information. Then they will contact the credit people to determine whether or not you are a credit risk. Then they will decide whether you are worth the risk. Usually, the will give you a card, allow you to charge up a great deal of debt, and then sell this debt as part of a derivative security on the open market. When you default, the market will crash.
Can a 17 year old get a department store credit card?
Not without a co-signer. You must be 18 to contract and few, if any, credit card companies would be willing to take the risk.
