Case study questions
Case study Requirements:
- The Due date of the group case is on April 8th, 2020, at 4:00 PM.
- Only Soft Copy is required, and submission should be through the safe assignment link on Blackboard.
- Direct Copy and Paste from the case is NOT allowed. If plagiarism were detected, your total assignment grade would be affected. The instructor may decide on further disciplinary actions.
From the case titled as “THE WEEKEND THAT CHANGED WALL STREET,” answer the following questions:
QUESTION 1:
What were the causes of Lehman Brothers’ failure? (20% Points)
(You need to search the internet to answer this question.) Suggested readings:
- https://journal-of-insurance-and-financial-management.com/index.php/JIFM/article/download/36/pdf
- http://www.iiste.org/Journals/index.php/RJFA/article/viewFile/11290/11598
QUESTION 2:
Giving real-life examples differentiate between the different types of derivatives and their usage? (20% Points)
QUESTION 3:
Why didn’t the government interfere and bail out Lehman Brothers as it did with Bear Stearns? (20% Points)
(You need to highlight the issue of moral hazard in the banking sector)
QUESTION 4:
Examine the importance of the commercial paper market? Why did the Lehman Brothers failure have an impact on it? (20% Points)
QUESTION 5:
Discuss the role that Lehman Brothers played in the CDS (Credit Default Swap) market at the time? (20% Points)