Deneme Sınavı Soruları

Diminshing credits

Closure of workplace

Bankruptcy of banks

Increasing money supply

Firing of workers

The payments system collapsed and the securities and money markets transactions stopped, especially because the state banks could not fulfill their obligations in the money markets. 

The crisis in Turkey didn’t lead to diminishing credits and  closure of workplaces.

The crisis in Turkey caused bankruptcy of banks. 


Rising public debts.

The banking sector was very fragile.

Vulnerability or fragility of banking industry

Excessive borrowing of government

Budget deficits

Deterioration of cash flows

Deterioration in the balance sheets of financial institutions

Economic downturn

Deterioration in the balance sheets of businesses

Mismanagement of financial liberalization

A problem investment banking firms face with initial public offerings is how to price them.

The reputation of the investment-banking firm is never at stake when it attempts to place the stock of the issuing firm.

In secondary common stock offerings, there is no prior market price on which to base the offering price.

If securities are priced too high, there may not be sufficient demand for them as expected.

For traditional bond offerings, the gross spread mostly is even lower than for a secondary common stock offering.

Investment bankers only serve target corporations.

Target corporations may hire investment bankers to help avoid undesired takeover attempts.

Target corporations require help in soliciting stockholders to sell their stocks in a process called a tender offer.

Target corporations require help in locating attractive corporations to pursue.

Target corporations require help in raising the required capital to complete the transaction.

The Tulip Madness occurred in a time when the Netherlands lived in the Golden Age. 

18. Century is called the era of stock market balloons.

The 1772 credit crisis was an indirect consequence of the bankruptcy of the Mississippi Company.

Companies and institutions that influenced sovereignty and commercial factors were the main causes of the bankruptcy of the East India Company.

The panic in 1873 turned into an international economic crisis in many parts of the world, including the USA and Europe. 

a financial security such as a bond or note, which is collateralized by a pool of assets

excess reserves held in the Central Bank and currency in ATMs

short-term borrowings in the interbank money market

reserves held by commercial banks above the reserves held to meet reserve requirements of the Central Bank

large denomination time deposits

Developed economies are also not transparent enough and it is also necessary to redefine the definition and criteria of “transparency”.

One of the most important examples of this was the conflict of interest between rating agencies and companies.

The liquidity risk must also be measured. Customers of ratings agencies are not aware of this narrow scope of rating services.

It started to market the mortgage loans for low-income households in order to earn more profits and was the lack of transparency.

Consumer spending and investment dropped, causing steep declines in industrial output.

A firm commitment 

A best efforts practice

Standby underwriting 

A back stop 

A market out clause 

Revenues down

Debt 

Downgrade

Discrimination

The Tulip Madness

The bankruptcy of the South Sea Company

The 1796-1797 panic

Henry Ford’s mass production

The Great Depression

5.57%

5.40%

5.52%

6.75%

4.32%

I and II

III, IV and VI

II, III, IV and VI

I, II, III, IV and V

I, II, III, IV, V and VI

Payoff to long forward

Payoff to short forward

Payoff to short option

Payoff to long option

Payoff to long futures

Right to preemption

Right to liquidation surplus

Right to vote and right to participate in management

Right to demand information

Common stock

Preferred stock

Voting stock

Non-voting stock

Cumulative stock

Swaps slightly more default risk than futures contracts which a performance bond is not required in swaps contracts.

The counterparty in swaps contracts are generally a commercial or investment bank, whereas in futures contracts have the clearinghouse.

Futures contracts are daily marked-to-market and the entire gain or loss is settled from day to day, whereas the settlement in swaps contracts are longer payments is longer.

The riskiness of a swaps contracts increases somewhere over the riskiness of futures contracts.

Swaps are traded in OTC, while future contracts are traded on the exchange.

Interest Rate

Financial System

Financial Markets

Financial Instrument

Financial Intermediary