Description
- 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 answers 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.
Assignment Question(s):
Q.1 Accounting for Securitization under SFAS No. 140 (2000) is a limited attempt to describe complex transactions that are structured to yield desired economic and accounting outcomes. This accounting raises three issues for users of financial reports. State these three issues.
(3 Marks)
Answer:
- 2 Mortgage banks are exposed to interest rate risk on their mortgage-related asset through prepayment and discounting effects that are not entirely distinct. Discuss the Prepayment and Discounting Effects of Mortgage Banks in detail..(4 Marks)
Answer:
- 3 A bank to accept credit risk, it must expect to be paid either interest at a sufficiently large premium above the risk-free rate or an actuarially fair fee. The required credit risk premium or fee depends upon four determinants. Explain these determinants in detail. (4 Marks)
Answer:
- 4 SFAS No. 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between marketplace participants at the measurement date. Fair Value Accounting is argued to be conceptually and practically preferable to Amortized Cost Accounting for most financial instruments. But there are some arguments that are against fair value accounting. Understanding these arguments are important because they speak directly to the strength and weakness of fair value accounting. You are required to discuss these arguments in detail.(4 Marks)
Answer:
Assignment (2)
Deadline: Saturday 19/04/2025 @ 23:59
Course Name: Accounting of Financial
Institutions
Student’s Name:
Course Code: ACCT 405
Student’s ID Number:
Semester: 2 second
CRN:
Academic Year: 2024-2025
For Instructor’s Use only
Instructor’s Name:
Students’ Grade:
/15
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 answers 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.
Restricted – مقيد
College of Administration and Finance Sciences
Assignment Question(s):
Q.1 Accounting for Securitization under SFAS No. 140 (2000) is a limited
attempt to describe complex transactions that are structured to yield
desired economic and accounting outcomes. This accounting raises three
issues for users of financial reports. State these three issues.
(3 Marks)
Answer:
Restricted – مقيد
College of Administration and Finance Sciences
Q. 2 Mortgage banks are exposed to interest rate risk on their mortgagerelated asset through prepayment and discounting effects that are not entirely
distinct. Discuss the Prepayment and Discounting Effects of Mortgage Banks
in detail.
Marks)
Answer:
Restricted – مقيد
.
(4
College of Administration and Finance Sciences
Q. 3 A bank to accept credit risk, it must expect to be paid either interest at
a sufficiently large premium above the risk-free rate or an actuarially fair fee.
The required credit risk premium or fee depends upon four determinants.
Explain these determinants in detail. (4 Marks)
Answer:
Restricted – مقيد
College of Administration and Finance Sciences
Q. 4 SFAS No. 157 defines fair value as the price that would be received to
sell an asset or paid to transfer a liability in an orderly transaction between
marketplace participants at the measurement date. Fair Value Accounting is
argued to be conceptually and practically preferable to Amortized Cost
Accounting for most financial instruments. But there are some arguments
that are against fair value accounting. Understanding these arguments are
important because they speak directly to the strength and weakness of fair
value accounting. You are required to discuss these arguments in detail.
(4 Marks)
Answer:
Restricted – مقيد
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