Financial Crisis Flashcards
0
Q
Detecting financial bubbles
A
1 lending standards
2 bank leverage
3 other measures of risk taking
1
Q
Ex. What signifies the beginning of a financial crisis
A
Aug. 9th 2007, BNP Paribas France’s largest bank halts redemptions on 3 investment funds
2
Q
3 factors in determining future growth, with example?
A
1 real growth rise of companies earnings and dividends (1.5%)
2 inflationary growth (2.4%)
3 dividend yield on stocks (1.9%)
Stocks can be expected to grow at 5.8% = 1.5 + 2.4 + 1.9
3
Q
Location of Financial Distress Ratios (Altman)
A
P. 167 auditing text
4
Q
Detecting fraud risk
A
Auditing text p. 230
