• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

Congratulations to Jamil from Pakistan and Jeeva from Malaysia - Global Prize winners!
see all ACCA December 2022 Genius Hunt Competition winners >>

Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>

economic environment

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › economic environment

  • This topic has 1 reply, 2 voices, and was last updated 11 months ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • February 20, 2022 at 3:30 am #648923
    johnbriane
    Member
    • Topics: 170
    • Replies: 160
    • ☆☆☆

    Which TWO of the following statements are correct?
    1 Securitisation is the conversion of illiquid assets into marketable securities
    2 The reverse yield gap refers to equity yields being higher than debt yields
    3 Disintermediation arises where borrowers deal directly with lending individuals
    4 Demand-pull inflation will occur when there are increases in production costs
    independent to the state of demand

    sir im finding it hard to understand the statement 1 and 3

    thank you sir

    February 20, 2022 at 9:47 am #648961
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51576
    • ☆☆☆☆☆

    A good example of securitisation is David Bowie, who was a pop singer. He was getting income from his records but it was an illiquid asset (it was not an asset that could be easily bought and sold). He sold bonds so that he got the money from the sale of the bonds (which were then marketable) and the people who bought the bonds got the income from his records instead of interest. The illiquid assets had been converted into marketable securities.

    An example of disintermediarisation is (as I explain in my lectures!!), suppose you want to borrow money (for which you will pay interest) and I want to invest money (to earn interest). Usually you would go to a bank to borrow the money, and the money that the bank is lending is money that other people (like me) had deposited with them. So they charge you more interest than they are paying me, so that they can make a profit. The bank is the intermediary. Disintermediariation is where instead of going via a bank, I lend money to you directly. That way we can both save money (but there is more risk involved because there is the risk that you never repay me the money). Doing it through a bank means that they have the risk and not me.

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

ACCA News:

 

ACCA My Exam Performance for non-variant Applied Skills exams is available NOW

NEW! Download the ACCA Pass Guide

FREE Verifiable CPD for ACCA Members

ACCA mock exams and debrief videos

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

Donate

If you have benefited from OpenTuition please donate.

ACCA CBE 2023 Exams

Instant Poll * How was your exam, and what was the result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Specially for OpenTuition students

20% off BPP Books

Get BPP Discount Code

Latest comments

  • Iby2012 on Introduction to Financial Accounting – ACCA Financial Accounting (FA) lectures
  • Iby2012 on Introduction to Financial Accounting – ACCA Financial Accounting (FA) lectures
  • Iby2012 on Introduction to Financial Accounting – ACCA Financial Accounting (FA) lectures
  • baraka42 on PM Chapter 13 Questions Standard Costing and Basic Variance Analysis
  • baraka42 on PM Chapter 13 Questions Standard Costing and Basic Variance Analysis

Copyright © 2023 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in


We use cookies to show you relevant advertising, find out more: Privacy Policy · Cookie Policy