In our initial analysis of the effect of firm-specific risk on incentives we assume there is no market risk, so that WACC equals the riskless
The interpretations and exemptions involve derivatives, intraday extensions of credit, and transactions involving depository institution loans made to a customer who uses the loan's proceeds (1) to purchase a security or other asset through a depository institution broker-dealer affiliate that acts as a riskless
principal or (2) to purchase a security from a depository institution broker-dealer affiliate when the loan was made pursuant to a pre-existing line of credit that was not entered into in contemplation of the purchase of securities from the depository institution affiliate.
* claims that trading medium term notes (MTNs), prime bank notes, or any other bank instruments, on a riskless
basis, will yield above market average returns; and
designed to affect share prices and returns," and that these actions, the object of which was to convince investors that bank shares were riskless
, caused the subsequent collapse.
They will find it difficult to get loans as banks prefer riskless
investments in government securities in a high-interest rate environment.
These claims are treated as riskless
in the risk management of banks despite the Greek haircut of 2012.
This typically sees the purchase and sale — at the same time — of the stocks of two merging companies to create what a fund may consider to be "riskless
Specifically, consider a household that finds it's best to split its wealth 50-50 between risky and riskless
investment at any age.
The positive effect from a guaranteed depreciation allowance can therefore be valued by discounting it at the riskless
rate and adding it to the present value of the other cash flows.
FINRA also requires substantial recordkeeping by firms of principal and of riskless
* Julian Kozlowski, New York University and Laura Veldkamp and Venky Venkateswaran, New York University and NBER, "The Tail that Keeps the Riskless
Rate Low" (NBER Working Paper No.