ACCT 405 Saudi Electronic University Changes in Interest Rates on Business Questions

User Generated

jrnz

Business Finance

Description

Unformatted Attachment Preview

College of Administrative and Financial Sciences Assignment 1 Course Name: Accounting of Financial Institutions Student’s Name: Course Code: ACCT 405 Student’s ID Number: Semester: II CRN: Academic Year: 2019-20-1440/1441 H For Instructor’s Use only Instructor’s Name: Students’ Grade: Marks Obtained/Out of / Level of Marks: High/Middle/Low Instructions – PLEASE READ THEM CAREFULLY • The Assignment must be submitted on Blackboard (WORD format only) via allocated folder. • Assignments submitted through email will not be accepted. • Students are advised to make their work clear and well presented; marks may be reduced for poor presentation. This includes filling your information on the cover page. • Students must mention question number clearly in their answer. • Late submission will NOT be accepted. • Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions. • All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism). • Submissions without this cover page will NOT be accepted. • The Answer should be within 1300-1500 words in length Assignment 1Question no 1- CASE STUDY a. What do you mean by intermediaries and its role in present scenario? b. What do you mean by status of bank regulation, with reference to the Saudi Arabian bank? c. What are the main kinds of liquid investment, which are being used, in the banking system in Saudi Arabia, relate with reference to the SAMA and Bank regulatory institutions of Saudi Arabia. Give detail information in your own words. Answer Question no 2As we know that, presently the local Saudi Arabian banks are helping in all respect to boost the economy, in spite of all, how the Saudi Arabian bank managers are managing the all kinds of risks involved in the local market liquidity as well as the international capital requirements to cover the risks? How it is going to ease and solve the current financial requirement of the markets? Explain in your own words. (Case study) Answer: Question no 3Recently ARAMCO, one of the leading petrochemical company has issued some kinds of bonds in the history of Saudi Arabia.– CASE STUDY a. What will be the effect of this kind of bond in local securities market? b. How will you correlate with business and industrial development in Saudi Arabica? c. How it is going to boost the economy? Give detailed information about the whole process in your own words.
Purchase answer to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

Attached.

Running head: ACCOUNTING ASSIGNMENTS

Accounting of Financial Institutions
Student’s name
Institution affiliation
Date

1

ACCOUNTING ASSIGNMENTS

2

Accounting of Financial Institutions
Assignment 1
An intermediary refers to a third party that provides intermediation services between two
parties. In finance, it can be referred to as a financial organization that connects between the
surplus and deficit agents. Banks act as an intermediary when they consolidate deposits and then
use the funds to transform them into loans or mortgages. The ultimate goal of the financial
intermediary is to link the mortgagors to investors (Sinha, 2019). Therefore, they bring together
commercial agents who are willing to lend out their surplus funds with those that face a shortage
of funds and want to borrow. Credit unions provide liquidity and minimize risks by diversifying
savings.
Bank regulation refers to government policies that subject financial institutions to
specific guidelines to create transparency between the banking organizations and the people or
corporations with whom they transact their daily businesses. In Saudi Arabia, SAMA has been
given the mandate to sets policies that banks need to meet in terms of capital adequacy, reserves,
lending, and liquidity ratios. Also, the banking control laws permit SAMA to issue and approve
licenses of banks or even take legal action against any bank that fails to meet the rules and
regulations (Bamakhramah, 2016). SAMA approves the dividends of each bank within the
kingdom before announcements and encourages them to build extra reserves to strengthen their
capital base.
Liquid investments refer to any investment that can easily be converted to substantial
money without having a significant impact on the current value. Liquid assets comprise cash and
due from financial entities, loans, and necessary bank advancements, trading securities, fair
income value, reverse cash warranties, etc. Deposits and short term funding entails total

ACCOUNTING ASSIGNMENTS

3

consumer credits i.e., current savings, long term savings, and short term borrowing such as
money market mechanisms. The implementation of the Mu...


Anonymous
Excellent resource! Really helped me get the gist of things.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4