Explain how reverse repurchase agreements allowed Robert Citron to leverage the OCIP portfolio. Then explain how this leverage led to mammoth OCIP losses
What will be an ideal response?
Reverse repurchase agreements allowed Robert Citron to borrow by selling existing fixed-income assets with the obligation to repurchase them at fixed prices in the future. Using reverse repos, Citron purchased and sold investment assets many times, which increased OCIP's portfolio so that it had almost three times the assets as it had equity. When losses on these assets rose, the return on OCIP's equity plummeted.
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What does Moody's Analytics Portfolio Manager Model use to identify the overall risk of the portfolio?
A. Maximum loss as a percent of capital. B. Historical loan loss ratios. C. Default probability on each loan in a portfolio D. Market value of an asset and the volatility of that asset's price. E. Mean of the value of loans in a portfolio.
Putting "References available upon request" at the end of your résumé is
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