SOLUTION MANUAL FOR # xp #xp
Fundamentals #xpOf #xpCorporate #xpFinance #xp11ce #xpStephen #xpA. #xpRoss, #xpRandolph #xpW.
#xpWesterfield, #xpBradford #xpD. #xpJordan, #xpJ. #xpAri #xpPandes, #xpThomas #xpHolloway
Chapter 1-26 #xp
CHAPTER 1 #xp
INTRODUCTION TO CORPORATE FINANCE #xp #xp #xp
Learning #xpObjectives
LO1 # x p The #xpbasic #xptypes #xpof #xpfinancial #xpmanagement #xpdecisions #xpand #xpthe #xprole #xpof #xpthe #xpfinancial #xpmanager.
LO2 # x p The #xpfinancial #xpimplications #xpof #xpthe #xpdifferent #xpforms #xpof #xpbusiness #xporganization.
LO3 # x p The #xpgoal #xpof #xpfinancial #xpmanagement.
LO4 # x p The #xpconflicts #xpof #xpinterests #xpthat #xpcan #xparise #xpbetween #xpmanagers #xpand #xpowners.
LO5 # x p The #xproles #xpof #xpfinancial #xpinstitutions #xpand #xpmarkets.
LO6 # x p Types #xpof #xpfinancial #xpinstitutions.
LO7 # x p Trends #xpin #xpfinancial #xpmarkets.
Answers #xpto #xpConcepts #xpReview #xpand #xpCritical #xpThinking #xpQuestions
1. (LO1) #xpCapital #xpbudgeting #xp(deciding #xpon #xpwhether #xpto #xpexpand #xpa #xpmanufacturing #xpplant),
#xpcapital #xpstructure #xp(deciding #xpwhether #xpto #xpissue #xpnew #xpequity #xpand #xpuse #xpthe #xpproceeds #xpto
#xpretire #xpoutstanding #xpdebt), #xpand #xpworking #xpcapital #xpmanagement #xp(modifying #xpthe #xpfirm‘s
#xpcredit #xpcollection #xppolicy #xpwith #xpits #xpcustomers). #xp(LO1)
2. (LO2) #xpDisadvantages: #xpunlimited #xpliability, #xplimited #xplife, #xpdifficulty #xpin #xptransferring
#xpownership, #xphard #xpto #xpraise #xpcapital #xpfunds. #xpSome #xpadvantages: #xpsimpler, #xpless #xpregulation,
#xpthe #xpowners #xpare #xpalso #xpthe #xpmanagers.
3. (LO2) #xpThe #xpprimary #xpdisadvantage #xpof #xpthe #xpcorporate #xpform #xpis #xpthe #xpdouble #xptaxation #xpto
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#xpliability, #xpease #xpof #xptransferability, #xpability #xpto #xpraise #xpcapital, #xpunlimited #xplife, #xpand #xpso
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4. (LO4) #xpThe #xptreasurer‘s #xpoffice #xpand #xpthe #xpcontroller‘s #xpoffice #xpare #xpthe #xptwo #xpprimary
#xporganizational #xpgroups #xpthat #xpreport #xpdirectly #xpto #xpthe #xpchief #xpfinancial #xpofficer. #xpThe
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5. (LO3) #xpTo #xpmaximize #xpthe #xpcurrent #xpmarket #xpvalue #xp(share #xpprice) #xpof #xpthe #xpequity #xpof #xpthe
#xpfirm #xp(whether #xpit‘s #xppublicly-traded #xpor #xpnot).
6. (LO4) #xpIn #xpthe #xpcorporate #xpform #xpof #xpownership, #xpthe #xpshareholders #xpare #xpthe #xpowners #xpof #xpthe
#xpfirm. #xpThe #xpshareholders #xpelect #xpthe #xpdirectors #xpof #xpthe #xpcorporation, #xpwho #xpin #xpturn #xpappoint
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7. (LO5) A #xpprimary #xpmarket
#xp transaction.
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Ross #xpet #xpal, #xpFundamentals #xpof #xpCorporate #xpFinance #xp11th #xpCanadian #xpEdition
#xpSolutions #xpManual © #xp2022 #xpMcGraw-Hill
SCHOL
#xpEducation -A
Ltd.
#xp7 1
#xp RVAULT
,#xp the #xpsale #xpbetween #xptwo #xp3rd #xpparties #xp(i.e. #xpnot #xpthe #xpcorporation).
Ross #xpet #xpal, #xpFundamentals #xpof #xpCorporate #xpFinance #xp11th #xpCanadian #xpEdition
#xpSolutions #xpManual © #xp2022 #xpMcGraw-Hill
SCHOL
#xpEducation -A
Ltd.
#xp7 2
#xp RVAULT
,8. (LO5) In auction markets like the Toronto Stock Exchange (TSX), brokers and agents meet at a
central location (the exchange) to match buyers and sellers of assets. Physical locations for stock
markets are disappearing as trading becomes more electronic. Dealer markets like Nasdaq consist of
dealers operating at dispersed locales who buy and sell assets themselves, communicating with other
dealers either electronically or literally over-the-counter. Dealer markets are less transparent than
auction markets where trades are reported publicly almost immediately. The auction market run by
the TSX is where the stocks of larger Canadian companies are traded; the TSX also operates a dealer
market called the Venture Exchange for companies too small to qualify for the TSX auction
exchange.
9. (LO3) Such organizations frequently pursue social or political missions, so many different goals are
conceivable. One goal that is often cited is revenue minimization; i.e., provide whatever goods and
services are offered at the lowest possible cost to society. Another would be to best serve the
maximum possible number of stakeholders at the lowest cost. A better approach might be to observe
that even a not-for-profit business has equity. Thus, one answer is that the appropriate goal is to
maximize the value of the equity.
10. (LO3) Presumably, the current stock value reflects the risk, timing, and magnitude of all future cash
flows, both short-term and long-term. If this is correct, then the statement is false.
11. (LO3) An argument can be made either way. At the one extreme, we could argue that in a market
economy, all of these things are priced. There is thus an optimal level of, for example, ethical and/or
illegal behavior, and the framework of stock valuation explicitly includes these. At the other extreme,
we could argue that these are non-economic phenomena and are best handled through the political
process. A classic (and highly relevant) thought question that illustrates this debate goes something
like this: ―A firm has estimated that the cost of improving the safety of one of its products is $30
million. However, the firm believes that improving the safety of the product will only save $20
million in product liability claims and lost customer goodwill. What should the firm do?‖
12. (LO3) The goal will be the same, but the best course of action toward that goal may be different
because of differing social, political, and economic institutions.
13. (LO4) The goal of management should be to maximize the share price for the current shareholders. If
management believes that it can improve the profitability of the firm so that the share price will
exceed $35, then they should fight the offer from the outside company. If management believes that
this bidder or other unidentified bidders will actually pay more than $35 per share to acquire the
company, then they should still fight the offer. However, if the current management cannot increase
the value of the firm beyond the bid price, and no other higher bids come in, then management is not
acting in the interests of the shareholders by fighting the offer. Since current managers often lose their
jobs when the corporation is acquired, poorly monitored managers have an incentive to fight
corporate takeovers in situations such as this.
14. (LO4) We would expect agency problems to be less severe in other countries, primarily due to the
relatively small percentage of individual ownership. Fewer individual owners means that each
individual owner has a greater incentive to monitor and control the firm—i.e. there is less free-riding.
The high percentage of institutional ownership might lead to a higher degree of agreement between
owners and managers on decisions concerning risky projects. In addition, institutions may be better
able to implement effective monitoring mechanisms on managers than can individual owners, based
on the institutions‘ deeper resources and experiences with their own management. The increase in
institutional ownership of stock in Canada and in the United States and the growing activism of these
large shareholder groups may lead to a reduction in agency problems for Canadian and U.S.
corporations and a more efficient market for corporate control.
Ross #xpet #xpal, #xpFundamentals #xpof #xpCorporate #xpFinance #xp11th #xpCanadian #xpEdition
#xpSolutions #xpManual © #xp2022 #xpMcGraw-Hill
SCHOL
#xpEducation -A
Ltd.
#xp7 3
#xp RVAULT
, 15. (LO5) #xpMajor #xpinstitutions:
Chartered #xpbanks #xp-accept #xpdeposits #xpand #xpissue #xpcommercial #xploans, #xpcorporate #xploans,
#xppersonal #xploans #xpand #xpmortgages.
Trust #xpcompanies-accept #xpdeposits #xpand #xpmake #xploans, #xpbut #xpalso #xpengage #xpin #xpfiduciary
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Insurance #xpcompanies #xp-engage #xpin #xpindirect #xpfinancing #xpby #xpaccepting #xpfunds #xpin #xpa #xpform
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Pension #xpfunds #xp-invest #xpcontributions #xpfrom #xpemployers #xpand #xpemployees #xpin #xpsecurities
#xpoffered #xpby #xpfinancial #xpmarkets.
Mutual #xpfunds #xp-pool #xpindividual #xpinvestments #xpto #xppurchase #xpa #xpdiversified #xpportfolio.
Hedge #xpfunds #xp-cater #xpto #xpsophisticated #xpinvestors #xpand #xpseek #xphigh #xpreturns #xpby #xpusing
#xpaggressive #xpfinancial #xpstrategies #xpprohibited #xpby #xpmutual #xpfunds.
Note #xpthat #xplarger #xpfinancial #xpinstitutions #xpmay #xpembody #xpmany #xpof #xpthese #xpdifferent
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Major #xpmarkets:
Money #xpmarket #xp-financial #xpmarkets #xpwhere #xpshort-term #xpdebt #xpinstruments #xpare #xpbought #xpand #xpsold.
Capital #xpmarkets #xp-financial #xpmarkets #xpwhere #xplong-term #xpdebt #xpand #xpequity #xpsecurities #xpare
#xpbought #xpand #xpsold. #xpDerivatives #xpmarkets #xp– #xpwhere #xpoptions #xpand #xpfutures #xpare #xptraded #xpon
#xpfinancial #xpinstruments #xpand #xpcommodities #xpPrimary # x p markets # x p are # x p where # x p securities
# x p are # x p sold # x p for # x p the # x p first # x p time; # x p secondary # x p markets # x p are # x p where
#xpoutstanding #xpsecurities #xptrade.
16. (LO5) #xpSpread #xpversus #xpFee #xpIncome:
Banks #xpearn #xpspread #xpor #xpinterest #xpincome #xpby #xpborrowing #xpfrom #xpdepositors #xpand #xplending #xpto
#xpborrowers #xp(at #xpa #xphigher #xpyield). #xpAn #xpexample #xpis #xpa #xpretail #xpdeposit #xpand #xpa #xpmortgage. #xpBanks
#xpmake #xpnon-interest #xpor #xpfee #xpincome #xpwhen #xpthey #xpcharge #xpcommissions #xpor #xpfees #xpfor #xpservices.
#xpAn #xpexample #xpis #xpan #xpoverdraft #xpfee #xpor #xpATM #xpfee, #xpor #xpthe #xpexample #xpin #xpthe #xptext, #xpthe
#xpstamping #xpfee #xpon #xpa #xpbanker‘s #xpacceptance #xp(which #xpis #xpa #xpform #xpof #xpinsurance #xpand #xparranging
#xpfee).
17. (LO5) #xpTrends:
Financial #xpengineering #xp-the #xpcreation #xpof #xpnew #xpsecurities #xpor #xpfinancial #xpprocesses. #xpThis
#xpengineering #xpcould #xpbe #xpused #xpto #xppackage #xpand #xpsell #xprisky #xpassets #xpto #xpinvestors; #xpfor
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#xpand #xpsell #xpthese #xpon #xpto #xpother #xpinvestors.
Derivative #xpsecurities #xp-options, #xpfutures, #xpforwards, #xpand #xpother #xpsecurities #xpwhose #xpvalue #xpis
#xpderived #xpfrom #xpthe #xpprice #xpof #xpanother, #xpunderlying #xpasset. # x p For #xpexample, #xpa #xpfutures
#xpcontract #xpto #xppurchase #xpoil #xpsets #xpa #xpfixed #xppurchase/selling #xpprice #xpfor #xpa #xpfuture #xpdate, #xpbut
#xpits #xpvalue #xpdepends #xpon #xpthe #xpprice #xpof #xpoil. #xpThese #xpderivatives #xpcan #xphelp #xpbusinesses
#xpdivest #xprisks #xpthat #xpare #xpnot #xpcore #xpto #xptheir #xpbusiness, #xpsuch #xpas #xpforeign #xpexchange #xpand
#xpinput #xpprice #xp(like #xpoil) #xprisk.
Regulatory #xpdialectic #xp-the #xppressures #xpthat #xpfinancial #xpinstitutions #xpand #xpregulatory #xpbodies
#xpexert #xpon #xpeach # x p other. # x p For #xpexample, #xpwhen #xprestrictions #xpare #xpremoved, #xpgrowth
#xpopportunities #xpmay #xpincrease. # x p However, #xpthe #xpabsence #xpof #xpregulatory #xprestrictions #xpmay
#xpalso #xplead #xpto #xpproblems #xpsuch #xpas #xpthe #xpglobal #xpfinancial #xpcrisis #xpstarting #xpin #xp2007 #xpcaused
#xpby #xpexcessive #xpfinancial #xpleverage, #xpso #xpit #xpis #xpimportant #xpthat #xpthere #xpbe #xpan #xpappropriate
#xplevel #xpof #xpregulatory #xpoversight.
ESG #xp–Investors #xpand #xpcorporations #xp(and #xptheir #xpmany #xpstakeholders) #xpare #xpincreasingly #xpfocused #xpon
#xpEnvironmental, #xpSocietal, #xpand #xpGovernance #xpissues. #xpThis #xpincludes #xpemployee #xpand
#xpcustomer #xpwelfare #xpas #xpwell #xpas #xpclimate #xpchange #xpand #xppollution.
Ross #xpet #xpal, #xpFundamentals #xpof #xpCorporate #xpFinance #xp11th #xpCanadian #xpEdition
#xpSolutions #xpManual © #xp2022 #xpMcGraw-Hill
SCHOL
#xpEducation -A
Ltd.
#xp7 4
#xp RVAULT
Fundamentals #xpOf #xpCorporate #xpFinance #xp11ce #xpStephen #xpA. #xpRoss, #xpRandolph #xpW.
#xpWesterfield, #xpBradford #xpD. #xpJordan, #xpJ. #xpAri #xpPandes, #xpThomas #xpHolloway
Chapter 1-26 #xp
CHAPTER 1 #xp
INTRODUCTION TO CORPORATE FINANCE #xp #xp #xp
Learning #xpObjectives
LO1 # x p The #xpbasic #xptypes #xpof #xpfinancial #xpmanagement #xpdecisions #xpand #xpthe #xprole #xpof #xpthe #xpfinancial #xpmanager.
LO2 # x p The #xpfinancial #xpimplications #xpof #xpthe #xpdifferent #xpforms #xpof #xpbusiness #xporganization.
LO3 # x p The #xpgoal #xpof #xpfinancial #xpmanagement.
LO4 # x p The #xpconflicts #xpof #xpinterests #xpthat #xpcan #xparise #xpbetween #xpmanagers #xpand #xpowners.
LO5 # x p The #xproles #xpof #xpfinancial #xpinstitutions #xpand #xpmarkets.
LO6 # x p Types #xpof #xpfinancial #xpinstitutions.
LO7 # x p Trends #xpin #xpfinancial #xpmarkets.
Answers #xpto #xpConcepts #xpReview #xpand #xpCritical #xpThinking #xpQuestions
1. (LO1) #xpCapital #xpbudgeting #xp(deciding #xpon #xpwhether #xpto #xpexpand #xpa #xpmanufacturing #xpplant),
#xpcapital #xpstructure #xp(deciding #xpwhether #xpto #xpissue #xpnew #xpequity #xpand #xpuse #xpthe #xpproceeds #xpto
#xpretire #xpoutstanding #xpdebt), #xpand #xpworking #xpcapital #xpmanagement #xp(modifying #xpthe #xpfirm‘s
#xpcredit #xpcollection #xppolicy #xpwith #xpits #xpcustomers). #xp(LO1)
2. (LO2) #xpDisadvantages: #xpunlimited #xpliability, #xplimited #xplife, #xpdifficulty #xpin #xptransferring
#xpownership, #xphard #xpto #xpraise #xpcapital #xpfunds. #xpSome #xpadvantages: #xpsimpler, #xpless #xpregulation,
#xpthe #xpowners #xpare #xpalso #xpthe #xpmanagers.
3. (LO2) #xpThe #xpprimary #xpdisadvantage #xpof #xpthe #xpcorporate #xpform #xpis #xpthe #xpdouble #xptaxation #xpto
#xpshareholders #xpof #xpdistributed #xpearnings #xpand #xpdividends. #xpSome #xpadvantages #xpinclude: #xplimited
#xpliability, #xpease #xpof #xptransferability, #xpability #xpto #xpraise #xpcapital, #xpunlimited #xplife, #xpand #xpso
#xpforth.
4. (LO4) #xpThe #xptreasurer‘s #xpoffice #xpand #xpthe #xpcontroller‘s #xpoffice #xpare #xpthe #xptwo #xpprimary
#xporganizational #xpgroups #xpthat #xpreport #xpdirectly #xpto #xpthe #xpchief #xpfinancial #xpofficer. #xpThe
#xpcontroller‘s #xpoffice #xphandles #xpcost #xpand #xpfinancial #xpaccounting, #xptax #xpmanagement, #xpand
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#xpand #xpcredit #xpmanagement, #xpcapital #xpbudgeting, #xpand #xpfinancial #xpplanning. #xpTherefore, #xpthe
#xpstudy #xpof #xpcorporate #xpfinance #xpis #xpconcentrated #xpwithin #xpthe #xptreasury #xpgroup‘s #xpfunctions.
5. (LO3) #xpTo #xpmaximize #xpthe #xpcurrent #xpmarket #xpvalue #xp(share #xpprice) #xpof #xpthe #xpequity #xpof #xpthe
#xpfirm #xp(whether #xpit‘s #xppublicly-traded #xpor #xpnot).
6. (LO4) #xpIn #xpthe #xpcorporate #xpform #xpof #xpownership, #xpthe #xpshareholders #xpare #xpthe #xpowners #xpof #xpthe
#xpfirm. #xpThe #xpshareholders #xpelect #xpthe #xpdirectors #xpof #xpthe #xpcorporation, #xpwho #xpin #xpturn #xpappoint
#xpthe #xpfirm‘s #xpmanagement. #xpThis #xpseparation #xpof #xpownership #xpfrom #xpcontrol #xpin #xpthe #xpcorporate
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#xpthe #xpshare #xpprice #xpof #xpthe #xpequity #xpof #xpthe #xpfirm.
7. (LO5) A #xpprimary #xpmarket
#xp transaction.
#xp #xp A #xpsecondary #xpmarket #xp transaction #xp would #xpentail
Ross #xpet #xpal, #xpFundamentals #xpof #xpCorporate #xpFinance #xp11th #xpCanadian #xpEdition
#xpSolutions #xpManual © #xp2022 #xpMcGraw-Hill
SCHOL
#xpEducation -A
Ltd.
#xp7 1
#xp RVAULT
,#xp the #xpsale #xpbetween #xptwo #xp3rd #xpparties #xp(i.e. #xpnot #xpthe #xpcorporation).
Ross #xpet #xpal, #xpFundamentals #xpof #xpCorporate #xpFinance #xp11th #xpCanadian #xpEdition
#xpSolutions #xpManual © #xp2022 #xpMcGraw-Hill
SCHOL
#xpEducation -A
Ltd.
#xp7 2
#xp RVAULT
,8. (LO5) In auction markets like the Toronto Stock Exchange (TSX), brokers and agents meet at a
central location (the exchange) to match buyers and sellers of assets. Physical locations for stock
markets are disappearing as trading becomes more electronic. Dealer markets like Nasdaq consist of
dealers operating at dispersed locales who buy and sell assets themselves, communicating with other
dealers either electronically or literally over-the-counter. Dealer markets are less transparent than
auction markets where trades are reported publicly almost immediately. The auction market run by
the TSX is where the stocks of larger Canadian companies are traded; the TSX also operates a dealer
market called the Venture Exchange for companies too small to qualify for the TSX auction
exchange.
9. (LO3) Such organizations frequently pursue social or political missions, so many different goals are
conceivable. One goal that is often cited is revenue minimization; i.e., provide whatever goods and
services are offered at the lowest possible cost to society. Another would be to best serve the
maximum possible number of stakeholders at the lowest cost. A better approach might be to observe
that even a not-for-profit business has equity. Thus, one answer is that the appropriate goal is to
maximize the value of the equity.
10. (LO3) Presumably, the current stock value reflects the risk, timing, and magnitude of all future cash
flows, both short-term and long-term. If this is correct, then the statement is false.
11. (LO3) An argument can be made either way. At the one extreme, we could argue that in a market
economy, all of these things are priced. There is thus an optimal level of, for example, ethical and/or
illegal behavior, and the framework of stock valuation explicitly includes these. At the other extreme,
we could argue that these are non-economic phenomena and are best handled through the political
process. A classic (and highly relevant) thought question that illustrates this debate goes something
like this: ―A firm has estimated that the cost of improving the safety of one of its products is $30
million. However, the firm believes that improving the safety of the product will only save $20
million in product liability claims and lost customer goodwill. What should the firm do?‖
12. (LO3) The goal will be the same, but the best course of action toward that goal may be different
because of differing social, political, and economic institutions.
13. (LO4) The goal of management should be to maximize the share price for the current shareholders. If
management believes that it can improve the profitability of the firm so that the share price will
exceed $35, then they should fight the offer from the outside company. If management believes that
this bidder or other unidentified bidders will actually pay more than $35 per share to acquire the
company, then they should still fight the offer. However, if the current management cannot increase
the value of the firm beyond the bid price, and no other higher bids come in, then management is not
acting in the interests of the shareholders by fighting the offer. Since current managers often lose their
jobs when the corporation is acquired, poorly monitored managers have an incentive to fight
corporate takeovers in situations such as this.
14. (LO4) We would expect agency problems to be less severe in other countries, primarily due to the
relatively small percentage of individual ownership. Fewer individual owners means that each
individual owner has a greater incentive to monitor and control the firm—i.e. there is less free-riding.
The high percentage of institutional ownership might lead to a higher degree of agreement between
owners and managers on decisions concerning risky projects. In addition, institutions may be better
able to implement effective monitoring mechanisms on managers than can individual owners, based
on the institutions‘ deeper resources and experiences with their own management. The increase in
institutional ownership of stock in Canada and in the United States and the growing activism of these
large shareholder groups may lead to a reduction in agency problems for Canadian and U.S.
corporations and a more efficient market for corporate control.
Ross #xpet #xpal, #xpFundamentals #xpof #xpCorporate #xpFinance #xp11th #xpCanadian #xpEdition
#xpSolutions #xpManual © #xp2022 #xpMcGraw-Hill
SCHOL
#xpEducation -A
Ltd.
#xp7 3
#xp RVAULT
, 15. (LO5) #xpMajor #xpinstitutions:
Chartered #xpbanks #xp-accept #xpdeposits #xpand #xpissue #xpcommercial #xploans, #xpcorporate #xploans,
#xppersonal #xploans #xpand #xpmortgages.
Trust #xpcompanies-accept #xpdeposits #xpand #xpmake #xploans, #xpbut #xpalso #xpengage #xpin #xpfiduciary
#xpactivities #xpsuch #xpas #xpmanaging #xpassets #xpfor #xpestates, #xpregistered #xpretirement #xpsavings #xpplans,
#xpetc.
Investment #xpdealers #xp-non-depository #xpinstitutions #xpthat #xpassist #xpfirms #xpin #xpissuing #xpnew #xpsecurities.
Insurance #xpcompanies #xp-engage #xpin #xpindirect #xpfinancing #xpby #xpaccepting #xpfunds #xpin #xpa #xpform
#xpsimilar #xpto #xpa #xpdeposit #xpand #xpmaking #xploans.
Pension #xpfunds #xp-invest #xpcontributions #xpfrom #xpemployers #xpand #xpemployees #xpin #xpsecurities
#xpoffered #xpby #xpfinancial #xpmarkets.
Mutual #xpfunds #xp-pool #xpindividual #xpinvestments #xpto #xppurchase #xpa #xpdiversified #xpportfolio.
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Note #xpthat #xplarger #xpfinancial #xpinstitutions #xpmay #xpembody #xpmany #xpof #xpthese #xpdifferent
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Major #xpmarkets:
Money #xpmarket #xp-financial #xpmarkets #xpwhere #xpshort-term #xpdebt #xpinstruments #xpare #xpbought #xpand #xpsold.
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#xpbought #xpand #xpsold. #xpDerivatives #xpmarkets #xp– #xpwhere #xpoptions #xpand #xpfutures #xpare #xptraded #xpon
#xpfinancial #xpinstruments #xpand #xpcommodities #xpPrimary # x p markets # x p are # x p where # x p securities
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#xpoutstanding #xpsecurities #xptrade.
16. (LO5) #xpSpread #xpversus #xpFee #xpIncome:
Banks #xpearn #xpspread #xpor #xpinterest #xpincome #xpby #xpborrowing #xpfrom #xpdepositors #xpand #xplending #xpto
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#xpstamping #xpfee #xpon #xpa #xpbanker‘s #xpacceptance #xp(which #xpis #xpa #xpform #xpof #xpinsurance #xpand #xparranging
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#xpengineering #xpcould #xpbe #xpused #xpto #xppackage #xpand #xpsell #xprisky #xpassets #xpto #xpinvestors; #xpfor
#xpexample, #xpbanks #xpcan #xppackage #xpand #xpsell #xpmortgages #xpinto #xpmortgage #xpbacked #xpsecurities
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#xpits #xpvalue #xpdepends #xpon #xpthe #xpprice #xpof #xpoil. #xpThese #xpderivatives #xpcan #xphelp #xpbusinesses
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SCHOL
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Ltd.
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#xp RVAULT
