Money and banking
Money is a commodity used as a medium of trade whereas banking on the other hand is the process of accepting and safe guarding money. Ten year treasury security is a long term security and therefore less volatile with very little if not nil risk. On the other hand a three month treasury security has a higher degree of risk given that it’s a short term asset and highly liquid.
On these grounds it is a safer investment to invest in the two securities but even safer with the ten year treasury security. Further, the five percent three month security is even more expensive given the short notice and the high liquid and volatility of such financial assets (Elmerald, 2006).
The loss on investors based on anecdotal evidence is explained to be based majorly on the fluctuation on the rates of return on the securities invested on by the investors. The rates of return in this case are majorly the rates of interest in the monetary and the securities market.
With expected inflation one would rather be a depositor than being a borrower because by being a depositor the investor is likely to receive returns in the future rather than losses in case of inflation. Being a borrower in this case would lead to payment of the loan at very high interest rates which would be very costly for the borrower. At the same time it’s also, when it’s appropriate for the borrower to borrow it’s also coincidentally appropriate for banks to lend expecting high returns in future if inflation occurs (Elmerald, 2006).
As shown above borrowers suffer the expense of high interest pay on borrowing s in case of inflation or change in interest rates against the borrower. With fixed interest rates, it may be at a trade off to both the borrower and the lender but to an extreme an advantage to the borrower because he would pay back the loan cheaply. To the banks as a result of fixed interest rates their profit margins are narrowed.
White- collar crime
According to Elmerald, P. (2006), “A white collar crime is, A crime committed by a person of respectably a high social status in case of his occupational duties” These are the criminal acts that are the financial crimes that are grossly committed by corporate heads in the course of their leadership and managerial duties accorded to them by the owners of the respective companies. The wrong acts committed may affect the companies negatively as the company itself or as the company and their shareholders who normally are the owners.
The crimes may include crimes like financial frauds, money laundering, embezzlement or even insider trading. Insider trading in this case explains a situation where a member or members of top management like the directors colluding in order to hide information from the rest of the stakeholders for personal gains.
The information hidden is normally likely to affect the shareholders in terms of reducing their wealth or the total loss of their shareholding in the company (Elmerald, 2006).
The views expressed as per the white collar crimes are highly unacceptable since they are majorly against company ethics. Such crimes also exposes the shareholders assets at very high risks of loss, the existence of the company also as an independent entity is also put at stake by the existence of such crimes.
Reference
Elmerald, P. (2006). Principles of Money and Banking. Toronto: General Books. White collar crime in contemporary society (4th ed.).