risk management , Financial Institutions and Markets

part 1

Q1. “The more risk-averse people are, the more likely they are to diversify.” Is this statement true, false, or uncertain? Explain your answer.

Q2. Define the concept of Standard Deviation and how to help to evaluate different investment choices?

Q3. Explain the relation between Interest rate and Bonds quantity level?

300 – 500 word for each Q

part 2

Writ a critical analysis on subprime crisis that had hit the United State financial market in 2007-2008 and had severely affected powerful economies of the world. Please include the following points in your writing.

• Introduction of the crisis
• Causes of the crisis
• Whom to blame, Basel II, rating agency, the regulators or the banks themselves?
• Conclusion.

Your answer should be in approximately 1000 words.

for all parts

Your answers MUST include outside references