High grade and the enhanced leverage hedge funds

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A financial institution is permitted to use leverage up to a maximum debt to equity ratio of 20. Currently the bank finances its $ 100 of assets with $10 of equity.

The current debt to equity ratio is 11. True or false why?

In the 10-K filed by Bear Stearns and Company for the fiscal year ending November 30, 2007,management fails to mention the civil suits filed against BSAM stemming from the failure of the High Grade and the Enhanced Leverage hedge funds. true or false why?

Gorton implies in the last paragraph of chapter 4 that the asset-backed securities backing short term debt were much less liquid than lenders had believed prior to the collapse of the subprime market. true or false?

In the 10-K filed by Bear Stearns and Company for the fiscal year ending November 30, 2007, management indicates that credit ratings are a function of many factors including the amount of leverage the firm uses. True or false?

According to Gorton the crisis of 2007-2009 was unique in the history f the United States since it was the first financial crisis lied to the collapse of real estate values. True or false ?

Reference no: EM13927789

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