User Account

All Pages

Explain how its investments in municipal bonds

Assignment Help Finance Basics
Reference no: EM131103045

Commercial banks moved heavily into equipment leasing during the early 1970s, acting as lessors. One major reason for this invasion of the leasing industry was to gain the benefits of accelerated depreciation and the investment tax credit on leased equipment. During this same period, commercial banks were investing heavily in municipal securities, and they were also making loans to real estate investment trusts (REITs). In the mid-1970s, these REITs got into such serious difficulty that many banks suffered large losses on their REIT loans. Explain how its investments in municipal bonds and REITs could reduce a bank's willingness to act as a lessor.

Reference no: EM131103045

Questions Cloud

What other means are there of communicating information : According to CON 1, ". . . financial reporting includes not only financial statements but also other means of communicating information." What other means are there of communicating information?
Why some restrictions should be imposed : Suppose there were no IRS restrictions on what constituted a valid lease. Explain, in a manner that a legislator might understand, why some restrictions should be imposed. Illustrate your answer with numbers.
Discuss the pros and cons of capitalizing leases : This raised the question of whether or not both the lease obligation and the asset involved should be capitalized and shown on the balance sheet. Discuss the pros and cons of capitalizing leases and related assets.
Find the maximum price : Use the variable-growth DVM and a required rate of return of 9% to find the maximum price you should be willing to pay for this stock.
Explain how its investments in municipal bonds : In the mid-1970s, these REITs got into such serious difficulty that many banks suffered large losses on their REIT loans. Explain how its investments in municipal bonds and REITs could reduce a bank's willingness to act as a lessor.
Find that lessees are in high or low income tax brackets : Would you be more likely to find that lessees are in high or low income tax brackets as compared with lessors?
Create brief job description for specific job of your choice : Create a brief job description for a specific job of your choice outlining the roles and responsibilities of this position. Next, design an employee-training program and outline its implementation for this position. Finally, provide an evaluation ..
Implement the sieve of eratosthenes : Implement the Sieve of Eratosthenes and use it to find all prime numbers less than or equal to one million. Use the result to prove Goldbach's Conjecture for all even integers between four and one million, inclusive.
What is the observed value of the f-ratio : If the null hypothesis were true, what would you expect the (approximate) value of the Fratio to be? If the alternative hypothesis were true, what would you expect the value of the Fratio to be? What is the observed value of the F-ratio (i.e., the ..

Reviews

Write a Review

Finance Basics Questions & Answers

  What is ciscos enterprise value

In June 2009, Cisco Systems had a market capitalization of $115 billion. It had A-rated debt of $10 billion as well as cash and short-term investments of $34 billion, and its estimated equity beta at the time was 1.27.

  Importance of time value of money concepts

Describe and discuss the significance of the following time value of money concepts including compounding (future value), discounting (present value) and annuities.

  Analyze the long-term solvency

Analyze the long-term solvency

  What is the adjusted seasonal index for quarter one

What is the adjusted seasonal index for Quarter 1 Answer %? What is the centred moving average that would correspond to Quarter 1 in 2006?

  Draw a diagram showing the possible outcomes

In your diagram, be sure to label the X and Y-axis, the put option strike price, and show the possible results for a money market hedge, a forward hedge, a put option hedge, and an uncovered position.

  What will your monthly payment be

You want to buy a new sports car from Muscle Motors for $43,000. The contract is in the form of a 60-month annuity due at a 6.25 percent APR.

  How should the cost of a non-current asset be decided

Why is depreciation said to cause an allocation problem in accounting? How should the cost of a non-current (fixed) asset be decided?

  Which of the following is generally not a good reason for

which of the following is generally not a good reason for using credit? answer a. to increase your consumption benefits

  Deductible expense for tax purposes

Question 1: Taxes provide an incentive to take on debt because interest paid on debt is a deductible expense for tax purposes, shielding income from taxation.

  What is the percentage of total profitablity analysis

Salaries and Wages at year one was 192,000, and year two was 197,760, and year three was 203,693. The Benefits at year one was 38,400, year two was 39,552, and year three was 40,739. what is the percentage of total profitablity analysis.

  What is the one-year forward rate for the period beginning

How does the liquidity premium theory of the term structure of interest rates differ from the unbiased expectations theory?  In a normal economic environment, that is, an upward- sloping yield curve, what is the relationship of liquidity premiums for..

  Risk of finance-portfolio-investments

What are unique risks associated with foreign investments? How might an investor protect his/her portfolio against these risks? Is it possible to protect a portfolio from all types of risk? Explain your answer.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd