Based on the business model that First American Bank’s (FAB) Credit Derivatives business unit follows, it should go ahead and take credit exposure to CapEx Unlimited (CEU). Pros of undertaking such an exposure include a periodic fee payment from Charles Bank International (CBI) to FBI in exchange for credit protection. The amount of periodic fee charged to CEU should reflect adequately reflect the inherent credit risk that FAB is exposed to. Additionally, FBI will be able to strengthen its customer relationship with CBI for future business activities. Downside includes exposure FAB to high counterparty and credit risk. The CDS that FBI is entering into with CBS is unsecured without any underlying collateral increasing counterparty risk for FBI. Also CEU’s publically traded debt was already below investment grade (B2 rating from Moody’s) with average recovery rate of 40% of loan if CEU were to enter default. This leaves FBI exposed to high credit risk on their balance sheet that they need to hedge to prevent any losses in event of default. In case the $ 50 million loan to CEU is syndicated to reduce the inherent risk FAB will still be the primary syndicator and will take on the maximum exposure of risk. The low credit quality of CEU with a total debt market value of $4.1 billion, representing an average yield of 9.6% with a credit spread of 5.1% means there is high probability that CEU might default during the life of contract which increases credit risk exposure. There are two ways in which FAB can manage credit risk on its balance sheet. First, if it decides to keep the credit risk it might have to set aside some capital as collateral to hedge the inherent risk involved. The amount of capital set aside depends on the risk adjusted return that it can earn by keeping the credit risk and credit risk tolerance (risk averse or risk taker) of FAB. If the return from capital set aside as collateral is greater than the return FAB would generate if it passes on the risk than it should keep the credit risk in house. Second, if FAB decides not to keep the credit risk on its balance sheet it can transfer the risk to two low rated banks and hedge funds mentioned in the case. One of the ways it can do that is entering into a CDS transaction with low rated bank and hedge fund. The issue with this CDS transaction is that it involves high counterparty risk. It FAB were to purchase credit protection from low rated bank and hedge fund it will be exposed to high default risk that credit protection sellers have because of their low credit ratings. They might enter into default before the CDS the end of life of the CDS contract and will not be able to fulfill their obligation if CEU faces any financial distress. Also important is the fact that this CDS will be unfunded by any capital. Thus in order to minimize its counterparty risk FAB would want protection sellers to set aside significant amount of capital as collateral so that they can meet their obligation…
Correctional Health Care
Increasing Staff Motivation and Satisfaction
MGMT 591: Leadership and Organizational Behavior
Professor Brett Gordon
December 17, 2012
The organization that will be the topic of discussion in my final project paper is Georgia Health Sciences Universities (GHSU), Georgia Correctional Healthcare (GCHC) division. GHSU is both a hospital and teaching institution based in Augusta, Georgia. GHSU was founded in 1828. Georgia Health Sciences University is home to…
Learning activity Term Paper
Test for Hidden Bias
The Implicit Association Test, tests for unconscious biases. I chose this learning activity to see if I have any hidden biases. I have always believed that I was a straight shooter never putting on a facade or giving a false presentation of myself. To prepare for taking this activity, I made sure that I was in a quiet room, away from any distractions. I concentrated on each activity as they appeared on my computer screen. I chose six categories…
companies use shady accounting practices to enflate revenue or hide losses, the public can’t get an accurate picture of what they are investing in. The public demanded that something be done, so in 2002 the U.S. govt passed the Sabex-Oxly act. For my term paper I will examine some the corporate scandals that led to the creation of the act.
Deragulation was lobbied for hard on wall street during the Bush Presidency. The public was lead to believe that loosing the rules on corporate practices would lead…
who understand these concepts grow as well. These talented individuals can be looked at from several different viewpoints and depending on who that person may be could in fact determine whether it is a positive viewpoint or a negative one. In this paper I will prove why it is necessary to have Ethical Hackers in today’s security models and how they have come a long way to improve how our information systems operate in a more secure manner.
Hacker’s for years have been able to do things that the…
Final Term Paper
CRIM 130: Intro to Corrections
Professor: Joseph M. Jacobs
May 9, 2014
The first phase of the criminal process is the crime. Once a crime is committed law enforcement official decided the type of offense committed which can be categorized into two types of offense (any violation of the criminal law). Felony: The more serious of the two types of offense, bearing a possible penalty of 1 year or more in prison. Misdemeanor: Lesser of the two basic types of crime…
practices, impacts, and issues of linking agency data
globally is critical. Since the focus in this paper is on the impact
of global data interchange, the difficult technical issues surrounding user authentication, security, and privacy are not discussed in
the depth they require.
KEYWORDS automation, human service administration, infrastructure, interoperability
Interoperability is a term that is not commonly understood by most human
service professionals, although most understand the trends…
unidentified flying objects flew from behind Arnold and passed him. The aircrafts did not have tails and did not leave any sort of trail behind them. Arnold compared the movement of the objects to “saucers skipping on water”, and here is where the term “flying saucer” came to be. Arnold was truly astounded by the movement of the saucers as he witnessed them fly through valleys and close to the edges of the mountain. He suspected them to be new military aircrafts being tested, but was not convinced…
Carlo Olkeriil, Graduated School of Education Department, Portland State University
This Research Paper was written in part of the Grading and Course Requirements of the COUN 507: Addiction Pharmacology taught by Terry Alan Forrest, LPC, LMFT
DOES A TWO-DRUG COMBINATION HAVE THE POTENTIAL TO FIGHT COCAINE ADDICTION?
This paper explores a published article and a book that detail the results from a recent study showing that a fine-tuned…
measured by examination.
Evaluation and Grading: A weighted course average will be calculated using the following weights for assignments:
Highest score on Exams 1-3 25%
Second highest score on Exams 1-3 25%
Term Paper 15%
Final Exam 25%
Grades will be earned according to the following scheme:
Below 60 F
Exams: The exams will allow the student to…
Phil 263: The Idea of God
December 5, 2014
Spiritual Dreams & Christianity
"Hear now my words: If there be a prophet among you, I the Lord will make myself known unto him in a vision, and will speak unto him in a dream"
Religion was the first field of dream analysis. According to Wendy Doniger and Kelly Bulkley, “the earliest writings we have on dreams are primarily texts on their religious and spiritual significance.” Since the very beginning…