Financial Institutions Week IV NOTES
Financial Institutions Week IV NOTES BU.231.710.W4.SP16
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This 2 page Class Notes was uploaded by Kwan on Tuesday April 12, 2016. The Class Notes belongs to BU.231.710.W4.SP16 at Johns Hopkins University taught by Roger Staiger in Spring 2016. Since its upload, it has received 42 views. For similar materials see Financial Institutions in Finance at Johns Hopkins University.
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Date Created: 04/12/16
Institutions IV Tuesday, April 12, 2016 13:34 Quizzes: weights higher for Quiz 2&3, different questions; cumulative: all covered 1. Lec: Bank Performance Underwrite the bank when applying for jobs: cash flows (to the peers/industry), risks, where revenues come from Eg. Enron?, investing banks/banks now?, rating agencies? Econometrics Look at what Yellen says and writes! Eg. Risk-‐free interest rate: FFR/Prime -‐-‐US; 30-‐day LIBOR -‐-‐international CFA! 2016 recession? -‐-‐ no, cuz election year 2012: Danish bank invests negative interest rates Banking: the largest cost is the human capital; now less compensation, more work Deregulation of banks: 1999 by Bill Clinton (in the short term very profitable) 500 trillion: derivatives market (forward/future -‐driven, expectations) 15%: physical markets Option: right to do something Meaning of derivatives and each derivative Project risk: systematic & unsystematic Portfolio risk: double sums S & L crisis in 1980s-‐1990s: interest went up Talent pools lake transferring Project risk: systematic & unsystematic Portfolio risk: double sums S & L crisis in 1980s-‐1990s: interest went up Talent pools lake transferring Over-‐levered CDS: eg. life insurance (life -‐ death) 2. Lec: Bank Management People behave as they are compensated, percentage of CEO's salary Board of Directors: Long-‐term/short term? Benchmarking compensation Buy 10 shares of top 10 equity: info emailed to u (good for job interviews) Real estate -‐-‐ three soft skills: pool, golf, gamble The equation of the duration What is duration Regression analysis “Cashless” collarnot costless (book's) Portfolio variance
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