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2 years ago

What is a step a bank can take to protect itself from loan defaults which can lead to recessions?

1 answer:

5 0

Diversifying its loans is a step a bank can take to protect itself from loan defaults which can lead to recessions.

By opting to diversify their loan portfolios or to maintain a larger percentage of their assets in bonds and reserves, banks can safeguard themselves against these risks. The full sum of the new deposits can be lent out by the bank. - Only the amount of the bank's excess reserves may be lent. - Only 25% of the deposits deposited by clients are lent by banks. In banking, asset/liability management is also employed. A bank is required to charge interest on loans as well as pay interest on deposits. Bankers monitor the net interest margin, or the difference between interest received on loans and interest paid on deposits, to control these two factors.

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You might be interested in

The price elasticity of demand, E, is defined as the:

Over [174]

Answer:

The correct answer is "Percentage change in quantity demanded divided by the percentage change in price of that good".

Explanation:

The elasticity of demand is a measure used in economics to show the degree of response of the quantity demanded of a good or service to changes in the price it presents. It grants the percentage change of the quantity demanded about a unitary percentage change in the price, with the other variables considered constant.

The E is a measure of the sensitivity of the quantity demanded of a good or service to changes in its price. Its formula normally produces a negative result due to the inverse nature of the relationship between the price and the quantity demanded.

Have a nice day!

6 0

3 years ago

Splish Brothers Inc. reported net income of $394000 for the year. During the year, accounts receivable increased by $29000, acco

Scilla [17]

Answer:

$414000

Explanation:

Calculation to determine what Net cash provided by operating activities for the year is

Net income $394000

Less Receivable increased ($29000)

Less Accounts payable decreased ($12000)

Add depreciation expense $61000

Net Net cash provided by operating activities $414000

Therefore Net cash provided by operating activities for the year is $414000

6 0

3 years ago

Joanette, Inc., is considering the purchase of a machine that would cost $570,000 and would last for 9 years, at the end of whic

arsen [322]

Answer:

The NPV of the project is -$68,870

Explanation:

- We have the cash flows from the investment and its timing as listed below:

+ Year 0 : - (Initial Machine investment cost + working capital) = -$573,000;

+ Year 1 - Year 8, each year: Labor and other cost reduction = $117,000;

+ Year 9: Labor and other cost reduction + Working capital recovery = 117,000 + 3,000 = $120,000.

- Thus, net present value of the project is all the above cash flows discounted at required rate of return 18%, calculated as followed:

-573,000 + [ (117,000/0.18) / ( 1 - 1.18^-8) ] + (120,000/1.18^9) = -$68,870.

- So, the answer is NPV of the project is -$68,870.

4 0

3 years ago

In the workplace today, more emphasis is being put on mental health. But sometimes, employees don't want to be seen as being una

AleksandrR [38]

Answer:

I believe it would be a lot easier to argue organization's ethical responsibility to help employees deal with stress.

Here's some ideas:

INTRO

--> Introduce your topic/argument

(make sure to include a thesis statement!!)

First, show the reader how damaging stress can be to the employee by explaining it's negative impact on the employee's wellbeing:

Symptoms of stress and ways that it negatively impacts employees specifically.
Mention how stress reduces productivity and site research about it.

Point out how common stress is within the workplace by using stats or current day examples:

Statistics about the huge percentage of people who report feeling stressed out from work.
Use the current day example of how the current pandemic has had a massive impact on the stress especially on healthcare workers.
Main point: stress is a very common and serious problem among employees.

BODY

Argue how organizations DO have an ethical responsibility to help employees deal with stress:

Point out how it's a very serious problem.
Argue that an organization who chooses not to help is a bad organization.
Show examples in history where organizations did not take good care of their employees.

To further strengthen your argument, mention how beneficial it is for the organization itself to provide resources for employees to help them manage their stress:

Provide statistics on the usefulness of stress-management programs within the workplaces (example: INCREASES PRODUCTION).
Argue how happier employees also tend to function better in the workplace because they feel supported.

CONCLUSION

--> Summarize your essay

Summarize your main points and restate your thesis statement here.

5 0

3 years ago

One of the most valuable sources firms have at their disposal is a rich cache of customer information and purchase history from

ohaa [14]

One of the most valuable sources firms have at their disposal is a rich cache of customer information and purchase history from their day-to-day operations, which is a type of Internal secondary data

Explanation:

Internal secondary data: It is the data that is obtained from within the organization.

A company's internal data, such as the sales and marketing data , customer information system , product purchasing and usage data are few example of Internal secondary Data

5 0

3 years ago