BMGT 445 lecture 1

BMGT 445 lecture 1 - BMGT 445 Professor Ethan Cohen-Cole...

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BMGT 445 Professor Ethan Cohen-Cole Lecture 1: Introduction
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Sample 1 http://www.youtube.com/watch?v=YsSlNFTjxss
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Sample 2 http://www.youtube.com/watch?v=ZBKU9WU_wLo
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What class are we in?
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??? Both David Bowie and Dreamworks (makers of Cowbows and Aliens) Securitized their cash flows
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What’s securitization? Dreamworks gets paid each month for use of their videos What if they want to get paid in advance?
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Securitization, cont Enter the bank Today: Bank pays dreamworks for all future revenues .
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Securitization, Cont. Tomorrow: Bank gets all the payments from viewers
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Works with loans too… Bank issues 100 mortgages Each month earns 100x monthly payment Can sell loans to another bank or investor for cash today Buyer receives future cash flows in place of bank Securitization is a modern method of reducing (or increasing) risk.
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Securitization was core component of current crisis CRISIS in a nutshell: Lots of banks issued ‘ sub-prime ’ loans
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This note was uploaded on 02/28/2011 for the course BMGT 445 taught by Professor Malmquist during the Spring '09 term at Maryland.

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BMGT 445 lecture 1 - BMGT 445 Professor Ethan Cohen-Cole...

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