What level of gain or loss would you consider normal

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Reference no: EM133751412

Citigroup Case
Material: You should read Case 6.2 from the Whalen text, which is on pages 374-381.
This case contains a number of facts related to Citigroup in 2008. This was the year when it was most affected by the 2007 Financial crisis and the Great Recession.
Instead of the "Required" part of the case on page 381, answer the following questions:
1. Principal transactions
a. What are they?
b. Are they a normal part of Citi's business?
c. What level of gain or loss would you consider normal for principal transactions? Defend you answer, even though it may be a shaky estimate
d. What level of gain or loss on principal transactions would you predict for Citi for 2009?
e. What information (not in the case) might be relevant to investing 2009 gains or losses from principal transactions?
2. Gains or losses from sales of investments
a. What are they?
b. Are they a normal part of Citi's business?
c. What level of gain or loss would you consider normal for principal transactions? Defend you answer, even though it may be a shaky estimate
d. What level of gain or loss on investments would you predict for Citi for 2009?
e. What other information might be relevant to estimating the future gains or losses on investments?
3. Provisions for loan losses
a. What are they?
b. Are they a normal part of Citi's business?
c. What level of loan losses would you consider normal for principal transactions? Defend you answer, even though it may be a shaky estimate
d. What level of gain or loss on loan losses would you predict for Citi for 2009?
e. What other information might be relevant to estimating the future gains or losses on investments?
4. Restructuring charges
a. What are they?
b. Are they a normal part of Citi's business?
c. What level of gain or loss would you consider normal for restructuring? Defend you answer, even though it may be a shaky estimate
d. What level of gain or loss on restructuring would you predict for Citi for 2009?
e. What other information might be relevant to estimating the future gains or losses on investments?
5. Goodwill impairments
a. What are they?
b. Are they a normal part of Citi's business?
c. What level of gain or loss would you consider normal for goodwill impairments? Is this a one-time event?Defend you answer, even though it may be a shaky estimate
d. What level of goodwill impairment would you predict for Citi for 2009?
e. What other information might be relevant to estimating the future gains or losses on goodwill impairments?
6. Discontinued operations
a. What are they? Which operations were discontinued?
b. Are they a normal part of Citi's business?
c. What level of gain or loss from discontinued operations would you predict for Citi in 2009? Defend you answer, even though it may be a shaky estimate
d. What other information might be relevant to estimating the future impact of discontinued operations?
7. Commissions and fees --2008 revenues from this source were about $9 billion below the 2007 level
a. To what extent does this seem to be due to write downs or fair value adjustments of mortgage servicing assets and finance commitments?
b. Do you expect these write downs to continue at similar levels in 2009? Why or why not?
c. What additional information might be relevant to estimating future levels of commissions and fees?

Reference no: EM133751412

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