Expanding Paradigms for Nursing Research
Expanding Paradigms for Nursing Research NU 820
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This 6 page Class Notes was uploaded by Caterina Langworth on Saturday October 3, 2015. The Class Notes belongs to NU 820 at Boston College taught by Staff in Fall. Since its upload, it has received 16 views. For similar materials see /class/218040/nu-820-boston-college in Nursing and Health Sciences at Boston College.
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Date Created: 10/03/15
072 Answer Key MF 820 Week 2 Exercise Answer Key 1 Please diagram the contracts and information exchanged in each of the following activities a intermediation services b credit enhancement Diagrams are in the notes Intermediation Services are characterized by the issuance of the indirect debt of a nancial institution to the SU This indirect debt is typically more liquid and because of diversi cation and ownership capital less subject to default risk than the direct or primary debt of DUs that the institution holds as assets A range of economies of scale or economies of specialization in any aspects of information handling and deal making is suf cient to allow intermediation services to earn a net return over all but the largest SUs can hope to extract on their own Credit Enhancement puts the credit of a f39mancial institution alongside or behind the credit of a DU In a highquality credit enhancement the SU faces virtually no risk of default The enhancer accepts the loss exposure and expertly manages the risk by diversi cation monitoring and adaptive post loan deal making A range of economies of scale 0r of specialization for these activities would mean that low wealth SUs and DUs that are not well known could be made better off by contracting via a credit enhancer 2 Please list what you regard to be the major events in a The corporate life of the mortgage lender now known as Countrywide Financial Corporation In 1969 Angel Mozilo and David Loeb started a Califomia chartered mortgage company called Countrywide By 1980 the company had over 40 of ces and in 1981 it formed Countrywide Securities Corporation a brokerdealer subsidiary that would sell securities backed by loans made 072 Answer Key In 1981 Countrywide Securities Corporation was formed to sell passthrough securities In 1984 Countrywide built a wholesale loan origination department and computerized homeloan origination In October 1985 Countrywide was listed on the New York Stock Exchange Through the 1990s Countrywide expanded its mortgagerelated activities and securitization operations and added securities and insurance subsidiaries to complement its mortgage products During this period it became the leading homemortgage lender in the US and it started operations in Britain In 1996 Countrywide Capital Markets was formed as an umbrella for Countrywide Securities Corporation the brokerdealer Countrywide Servicing Exchange the broker of bulk loan servicing rights and Countrywide Asset Management Corporation a manager of distressed residential real estate assets In the latter half of the 1990s Countrywide Insurance Services Inc expanded its insurance product offerings to include homeowners home protection condo life health disability and auto insurance In November 1999 Countrywide solidi ed its presence in the insurance industry by acquiring Balboa Life amp Casualty an insurer offering a wide range of products and services designed exclusively for nancial institutions and their customers In addition DirectNet Insurance Agency was formed as an outsourcing solution providing insurance brokerage and comprehensive technical and operational resources to nancial institutions On April 10 2001 Countrywide received conditional approval to acquire a 100 millionasset Washingtonarea institution that would bring Countrywide a national bank subsidiary to be regulated by the OCC The acquisition made Countrywide a BHC subject to Federal Reserve Regulations Countrywide began to use the Internet to expand into checking savings and other consumer banking services The acquisition also allowed Countrywide to move 45 billion in escrow deposits into its own bank from other depository institutions On November 13 2002 the company adopted its new corporate name Countrywide Financial Corporation On January 15 2004 Countrywide s securities unit was recognized as a US government securities primary dealer by the Federal Reserve Bank of New York This move allowed Countrywide to buy and sell US Treasuries directly with the Fed Access to the treasury market gave the exibility to lengthen or shorten the duration of the portfolios in mortgage lending April of 2004 Enters commercial realestate nancing business 072 Answer Key March 2005 7 Expands globalization strategies Countrywide announced plans to open a mortgage banking business in the UK Also it established an office in Tokyo and was awaiting approval to operate securities business there and was opening a second office in India Countrywide is continuing to expand globally Early 2007 Officers began to unload huge amounts of CFC stock February 13 2007 Countrywide agreed to buy the assets of CCM Futures LLC moving into the futures brokerage and extended a capital markets operation that had gained a higher pro le at the company Acquisition of CCM Futures LLC allowed Countrywide to acquire seats on the Chicago Board of Trade and the Chicago Mercantile Exchange This move allowed the rm to expand the revenue stream from its capital markets arm but more importantly provided the company with an opportunity to trade futures to help control their dealings with The Fed as a primary dealer In March 2007 Countrywide Bank converted its nationalbank charter to a federal thrift This moved CFC to the regulatory jurisdiction of the Office of Thrift Supervision rather than the tougher regulatory jurisdiction of the Federal Reserve and OCC On April 28 2007 it reported that Countrywide CEO Angelo Mozilo took home 120 million last year and 284 million over the past two years The Countrywide Foreclosure blog reported Countrywide owns 7610 foreclosed houses On July 24 Countrywide reported a 33 decline in profits signaled that defaults were spreading beyond subprime borrowers slashed its profit outlook for the rest of the year and predicted the housing market would not recover until 2009 During August 2007 amid the turmoil in the credit markets and problems with subprime mortgages its stock price fell about 50 and the company issued convertible preferred stock to the Bank of America for 2 billion b WalMart s many efforts to enter the banking business June 1999 7 Applied to the OTS to buy a unitary thrift holding company October 1999 7 the GrammLeachBliley Act of 1999 banned nonfinancial firms from buying unitaries September 2001 7 Announced plan to partner with TorontoDominion to offer banking services at stores Bank lobbyists argued that this would violate ban on mixing of banking and commerce April 2002 7petitioned the state of California to let it take over the charter of Franklin Bank of California an industrial loan bank August 2002 7 Bank lobbyists won a New California law that bans nonfinancials from buying industrial banks 072 Answer Key April 2003 7 TorontoDominion officials said WalMart deal had been shelved This event represented the end of WalMart s attempts to enter the narrow banking business with its own employees From this point forward it took a much more innovative approach to offering its customers banking products In June and July of 2004 WalMart found a way to let customers cash checks and buy online In 2005 WalMart applied to establish an industrial loan company in Utah On Jan 29 2007 Rep Barney Frank DMass and Rep Paul Gillmor ROhio introduced HR 698 prohibiting new ILCs March 2007 7 WalMart withdrew its application to charter an industrial loan company in Utah and instead would expand its financial services offerings indirectly Without the charter WalMart would be unable to go forward with its plan to process its own debit and credit transactions which it currently does through insured depository institutions for a small fee However just by attempting to become an ILC WalMart was able to get the depository institutions to lower their fees helping them to realize much of the savings they would have gotten had they become an ILC themselves In 2007 WalMart has extended its offerings of financial services through partner institutions including GE Money Offerings include prepaid debit cards and check cashing bill paying and money order services Issuance of the WalMart MoneyCard will allow customers to transfer funds from their paycheck directly onto a prepaid Visa debit card WalMart is initially targeting customers that do not use banks WalMart hopes that this move will increase instore traffic as many customers will make it a regular routine to stop by WalMart after getting paid Expansion of WalMart MoneyCenters currently offer check cashing bill paying and money order services into at least 1000 stores up from 225 MoneyCenters allowed WalMart to take an additional step beyond the prepaid MoneyCard by offering customers checkcashing services money orders bill payments and money transfers This move further expands WalMart s move into the banking industry and allows it to put further pricing pressures on financial institutions while continuing to increase the number of reasons its customers have for coming to the store In late 2006 the Mexican Finance Ministry issued its final approval for a bank which will be called Banco WalMart de Mexico Adelante The start of operations has been planned for the second half of 2007 offering savings accounts debit cards and credit lines to its individual and smallbusiness customers Boston College MF 820 Week 9 Exercise Answer Key Question 1 a UN 9 DN 10357 912 35 7 45 305 years pvpr 7305115 10m 0001 2652173 b No it is not An Arbitrage strategy is riskless Eagle is highly exposed to interestrate risk and possibly to default risk as well It is also wrong to describe the strategy as taking liquidity risk Strictly speaking Liquidity problems arise merely from nonsynchronicity between offers made by buyers and sellers of assets Leverage produces high returns on this SIV s strategy when interest rates are stable or falling But when asset values decline leverage works adversely and equity can be quickly exhausted c To answer this question we rst need to calculate the value F the assets will pay at maturity from the quotion 100mil Crossmultiplying we get 10553 F 100ml0553 or 12061 m The assets are now 3year bullet notes promising 93 percent of 12061 million in 3 years At the new yields Eagle s assets are worth only 11217 mil1063 9418 mil If it were not for the hedge Eagle would have lost more than half of its net worth But the hedge did not cover default risk and such a large movement in asset yields makes probable differences in convexity between the swap and equity positions important too Whenever insolvency eXists or threatens an SIV s sponsor would feel pressure to support the fund both for reputational reasons in a repeat business and because implicit or explicit recourse arrangements might force the assets and the losses imbedded in the Z position back onto the sponsor s balance sheet The threat that offbalancesheet SIVs pose to their sponsors represents a form of reputation risk that regulators should recognize by imposing a capital requirement on backup credit lines whatever their maturity In July 2007 a rush of redemption demand led hedge funds to disinvest in structured products several sponsors had trouble funding their SIV credit lines The line to one SIV from the German Bank IKB had to be rescued by stateowned KFW Another one of its SIVs limped along and finally went into default around Oct 17 Difficulties that became evident at very highly levered SIVs made rollovers difficult for all SIVs