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    FM201 Tutorial 4

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    Miss Slayer
    The stock market rebounded strongly post-COVID despite economic uncertainty due to the pandemic. Low-income customers rely on payday lenders for basic needs due to high bank fees, but reducing fees could improve financial health. A study found that large businesses, small businesses, and consumers were differently affected by bankruptcy filing rates during the COVID-19 crisis. It is important to account for differences between asset-based loans, cash flow loans, trade financing, and leasing when analyzing disruptions to credit markets.

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    FM201 Tutorial 4

    Uploaded by

    Miss Slayer
    29 views2 pages
    The stock market rebounded strongly post-COVID despite economic uncertainty due to the pandemic. Low-income customers rely on payday lenders for basic needs due to high bank fees, but reducing fees could improve financial health. A study found that large businesses, small businesses, and consumers were differently affected by bankruptcy filing rates during the COVID-19 crisis. It is important to account for differences between asset-based loans, cash flow loans, trade financing, and leasing when analyzing disruptions to credit markets.

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    FM201 Tutorial 4

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    The stock market rebounded strongly post-COVID despite economic uncertainty due to the pandemic. Low-income customers rely on payday lenders for basic needs due to high bank fees, but reducing fees could improve financial health. A study found that large businesses, small businesses, and consumers were differently affected by bankruptcy filing rates during the COVID-19 crisis. It is important to account for differences between asset-based loans, cash flow loans, trade financing, and leasing when analyzing disruptions to credit markets.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    29 views2 pages

    FM201 Tutorial 4

    Uploaded by

    Miss Slayer
    The stock market rebounded strongly post-COVID despite economic uncertainty due to the pandemic. Low-income customers rely on payday lenders for basic needs due to high bank fees, but reducing fees could improve financial health. A study found that large businesses, small businesses, and consumers were differently affected by bankruptcy filing rates during the COVID-19 crisis. It is important to account for differences between asset-based loans, cash flow loans, trade financing, and leasing when analyzing disruptions to credit markets.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    FM201 – Financial Institutions and Markets

    Tutorial 4
    COVID and the Market : A Case Study
    1. The stock market normally leads the economy, but what happens when the economy's path
    isn't clear? Study the two graphs and using your recent understanding of stock markets provide an
    explanation to reflect the performance of the stock market and the stock prices post Covid 19 from the
    perspective of the global economy.

    A.The S&P 500 index has rebounded strongly post COVID

    B. A reopening economy shuffles the deck


    2. Low-income customers turn to payday lenders and check cashers for basic financial needs
    when traditional banks push them out of the system through high overdraft fees and other
    penalties. Reducing overdraft fees improves consumers’ overall financial health and access to
    cheaper credit. Discuss
    3. Analyzing the impact of the COVID-19 crisis on bankruptcy filing rates from across the South
    Pacific Region, this study finds that large businesses, small businesses, and consumers
    experience very different effects of the crisis.
    Discuss the merits of this statement
    4. Practitioners commonly refer to four distinct loan types: asset-based loans, cash flow loans,
    trade financing, and leasing. It is important to account for these differences in loan type in order
    to analyze the economic significance of credit market disruptions.
    Discuss the validity of such statement
    5.Private equity buyouts are a major financial enterprise that critics see as dominated by rent-
    seeking activities with little in the way of societal benefits. This study of 6,000 US buyouts
    between 1980 and 2013 finds that the real side effects of buyouts on target firms and their
    workers vary greatly by deal type and market conditions.
    Discuss the merits of this statement
    5. Since 1990, new stock exchanges geared toward fast-growing, entrepreneurial companies have
    proliferated around the world. This analysis shows that exchanges in countries with better
    shareholder protection allowed younger and less profitable companies to raise more capital. These
    markets alone cannot boost entrepreneurial activity but need enabling institutions.
    Analyze and discuss this statement
    6. Mutual fund managers solve their complex “search problem” for superior investable returns by
    tracking—and trading—on very particular sets of firms and insiders. These sets are chosen
    strategically and remain very persistent over time, as does the outperformance these insiders’
    trades afford to the given fund managers.
    Do you support this claim? Discuss
    7. Between 2008 and 2014, the Top 4 banks sharply decreased their lending to small business.
    There is a lasting economic consequences of this contraction, finding that a credit supply shock
    from a subset of lenders can have surprisingly long-lived effects on real activity.
    Explain further
    8. New research by Associate Professor Shawn A. Cole, Martin Kanz, and Leora Klapper explores
    how various compensation incentives affect lending decisions among bank loan officers. They find
    that incentives have the power to change not only how we make decisions, but how we perceive
    reality Discuss

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