How do rating agencies come to their findings and which institutes do they focus on?

 


 

  Lovemore - Harare

Posted: October 20 2012


 NDBS Answers:

 

The ratings agencies run credit checks on companies, countries and financial products.  What they do is assess how likely a borrower is to be able to repay its debts and help those trading debt contracts in the secondary market. Credit ratings are used by investors, issuers, investment banks, broker-dealers, and governments. For investors, credit rating agencies increase the range of investment alternatives and provide independent, easy-to-use measurements of relative credit risk; this generally increases the efficiency of the market, lowering costs for both borrowers and lenders. This in turn increases the total supply of risk capital in the economy, leading to stronger growth. It also opens the capital markets to categories of borrower who might otherwise be shut out altogether: small governments, startup companies, hospitals, and universities.


 

  What determines the wealth of a person, the money the person has or the assets? 

Peter Mbalula - Cape Town

Posted: October 20 2012


NDBS Answers:

 

Wealth of a person is measured against what the person owns both in liquid assets, meaning any accessible money or assets that can be sold to get money.  The other measure is value of possessions; these are items that cannot be exchanged quickly for cash.  Also the debts one has can be used as the more debts one has that may affect the entire wealth since debts are on arranged payments and creditors can apply for liquidation if they are not paid as per agreement, and if the person is owed that is still counted in the personal wealth is the money is recoverable.  If a person owns a company the assets in the name of the company as not counted as personal wealth.


 

  Is Quid Pro Quo type of contract worth entering into? 

NewdiscoveryBS Reader

Posted: October 19 2012


NDBS Answers:

 

This is a Latin phrase meaning "something for something". This term is used mostly in business circle where company A enters into agreement with company B whereby A provide services or goods to B in return for goods or services that will benefit either party.  The risk in this kind of arrangement you may not quantify the exact value of the goods you are receiving or service versus the service or goods you are providing.   Win-win situation is seldom.

 


 

  How does a country get into current account deficit? 

NewdiscoveryBS Reader

Posted: October 19 2012


NDBS Answers:

 

The country gets into current account deficit when it imports more than it can export.  By importing more than exporting makes that country a debtor to the other countries than a supplier.  It absorbs through consumption, investment and government spending without producing much.  That country ends up relying much on direct investment, bond and portfolio investment.  But if the country is able to invest abroad and produce more than it is importing and export what it produces that becomes current account surplus, however current account deficit may encourage productivity in a country that is still finding its feet economically  in a short term and attract direct foreign investment also but should not be left unchecked as it may grow wider and make country indebted and become a continuous borrower.                


 

FAQs:

 

 

Top Asked Questions:  

 What Determines Petrol Price in SA

 Procedure To Follow When Registe ring Company In SA

 


 

alt

 



Are you looking for the best web hosting? Be a smart buyer and read hosting reviews before choosing a suitable host.

      New DiscoveryBS (Pty) Ltd ©2011-2015  Terms Of Usel NewsBrand Engage l Advisory-Mentorship l Events l NDBS Services l NDBS FAQs l Contact Us l back to top button

                                                                                                                               Content Management and Designs Proudly Done Inhouse By: New DiscoveryBS

 

             

Joomla Themes designed by Joomla Hosting Reviews