What calculations are need to produce a figure for any of the following types of risk?:...

What calculations are need to produce a figure for any of the following types of risk?:

- Credit risk

- Foreign exchange risk

- Liquidity Risk

I have key financial data, balance sheet and profit and loss figures for UK banking industry, just not sure how to apply it. Any help would be appreciated, thank you.

Expert Solution

ANS: Credit risk is a loss of Principal Amount due to the borrower's Failure of repaying of loan.

Credit Risk is directly proportional to the Overall Re-paying capacity of the buyer to repay the loan

Calutations

Calculate the FICO score - It helps to determine the Credit worthiness of consumer by analysing the Reapayment History
Demand CIBIL from bank in any loan is availed by him during previous year
Calculate Debt to Income ratio : ratio below 35% is considered as Acceptable risk

Foreign Exchange risk is risk caused due to Foreign exchange rate fluctuations. As per Accounting Standard - 11 " THE EFFECT OF CHANGES IN FOREIGN EXCHANGE RATES" the loss & gain shall be recognised depending upon the difference between Buying & Selling rates, which must be recognised as Income or Expense

Liquidity risk Helps the investors to sell the assets or convert to cash. Liquidity risk is the difference between Bid & Ask Spread (Bid rate - Ask Rate )* number of shares.

Note: All above Risk are discussed, you can apply above information to calculate those risks depending upon the data available in your Financial Statements.

jeff jeffy answered 1 year ago

Banks are exposed to various types of risk. Discuss any SIX (6) types of risk that...

Banks are exposed to various types of risk. Discuss any SIX (6) types of risk that could effect the bank’s position. 5 paragraph with examples . TQ

what are calculations that can be used to figure out replenishment of items? how do i...

what are calculations that can be used to figure out replenishment of items? how do i figure out how many weeks/days on hand i have/need. an example is if i ordered 1069 cases of a product and sold 728 in the last 7 days with the stores having 9 days of inventory and 7 days of inventory in a wherhouse. would 1069 cases be to much?

(a) Given that any given meiosis will produce two types of gametes one with two sex...

(a) Given that any given meiosis will produce two types of gametes one with two sex chromosomes and one with only one, what combinations of sex chromosomes would you find in the sperm of a Klinefelter's man and in what proportion? (b) If a Klinefelter’s man mates with a typical (XX) female, what would you expect for the genetic composition of their children? What genotypes would you expect for all their possible children? Indicate the relative proportions of the genotypes...

Need step by step solutions and calculations The following is a set of data from a...

Need step by step solutions and calculations The following is a set of data from a sample of 11 items X: 7 5 8 3 6 0 2 4 9 5 8 Y: 1 5 4 9 8 0 6 2 7 5 4 a. Construct a scatter plot using the sample data. b. Calculate the mean, median variance and coefficient of variation and z-scores for X. c. Determine the outliers. d. Determine the quartiles of X. e. Construct a...

Using the following data, financial ratios need to be determined for the calculations at the bottom....

Using the following data, financial ratios need to be determined for the calculations at the bottom. STARBUCKS CORP CONSOLIDATED BALANCE SHEETS (HORIZONTAL ANALYSIS) Oct 1, Oct 2, Sep 27, % Change % Change 2017 2016 2015 2017-2016 2016-2015 ASSETS Current assets: Cash and cash equivalents $ 2,462.30 $ 2,128.80 $ 1,530.10 15.67% 39.13% Short-term investments 228.60 134.40 81.30 70.09% 65.31% Accounts receivable, net 870.40 768.80 719.00 13.22% 6.93% Inventories 1,364.00 1,378.50 ...

Which of the following types of risk is the least important risk for a diversified investor?...

Which of the following types of risk is the least important risk for a diversified investor? A:) systematic risk B:) Undiversifiable risk C:) market risk D:) idiosyncratic risk

what are the typical types of risk faced by a firm

According to the following article? What types of structural problems need to be resolved when the...

According to the following article? What types of structural problems need to be resolved when the two organizations are merged? Both A and B are two large sales companies, and B was acquired by Company A due to poor management. Both companies have a similar organizational structure - function-based design.However, after the acquisition of the new company, it suddenly increased a lot of shops and employees.After the completion of the acquisition of the new company, get an increase of many...

Consider the following different types of risks: Credit risk, Liquidity risk, Interest Rate risk, Market risk,...

Consider the following different types of risks: Credit risk, Liquidity risk, Interest Rate risk, Market risk, Off-Balance-Sheet risk, Foreign Exchange risk, and Insolvency risk. What types of risks from the above do you think are particularly timely items for financial institutions to worry about today? What are some items you think might become a bigger issue in the future but are not a major concern today?

Critically discussing any two types of ports (types, what they do, their mandates?

Question