Dissertation Creation - The UK's original provider of custom dissertations and dissertation help...

Free Dissertations - Finance Dissertations

The Foregoing, Illiquid Cash Flow Sources Can Be Commercial, And Or Home ...

The foregoing, illiquid cash flow sources can be commercial, and or home loans, credit card accounts, vehicular loans, consumer loans, illiquid bonds, aircraft leases, and corporate home loans.

Chapter 3 Impact of Credit Derivatives and Other Derivatives
An while the spectacular losses that have occurred in the credit derivatives market have garnered headlines, what gets lost in the translation is that the market continues to grow at phenomenal rates! That seemingly signals other facets that are inherent within the credit derivatives market fueling the growth. Profits represent one aspect, however, without a sound business related underpinning firms could not really utilize the methodology without such seemingly looking like market gambling. The benefit of credit derivatives to corporations, investors, and the economy is that they provide investors with opportunities that otherwise might not be available in terms of derivative securities, credit, options, forwards, and futures Bank for International Settlements (2000).
The risks that are attributed to derivatives represent the manner in which they are utilized in the market. In equating the manner in which credit derivatives impact upon international finance, a survey conducted by the International Swaps and Derivatives Association (2004) among finance professors at the top fifty business schools in the United States resulted in a response from 84 professors at 42 institutions. The following are the responses to that questionnaire (International Swaps and Derivatives Association, 2004):
Managing financial risk more effectively is a way for companies to build shareholder value
98% of the respondents to the survey agreed with this statement
44% strongly agreed,
47% indicating that they agreed,
7% stating that they somewhat agreed,
2% of the respondents somewhat disagreed
Derivatives help companies manage financial risk more effectively
100% of the respondents agreed with the preceding statement as represented in the following manner:
1). 49% strongly agreed,
2). 43% agreed
3). 8% somewhat agreed
Respondents commonly cited the benefit provided represented the ability of companies to utilize derivatives to enable them to customize the risk profile of companies and assume those risks which added value.
Derivatives will continue to grow in use and application
54% strongly agreed,
38% agreed,
8% somewhat agreed
In their responses, a majority of the respondents stated that credit risk represented the area that in the future would most likely benefit from innovations.


Derivatives have not created new types of risk, they simply allow existing risks to be managed better
55% agreed overall with the preceding statement, in the following manner:
1). 15% strongly agreed
2). 23% agreed
3). 17% somewhat agreed
4). 18% somewhat disagreed
5). 27% disagreed
The impact of derivatives on the global financial system is beneficial.

Please note: The above dissertation snippet was written by a student and then submitted to us to display and help others. Thanks to all the students who have submitted their work to us.