Will Defaults Rise Along With Interest Rates in 2015?

Will Defaults Rise Along With Interest Rates in 2015?

Assessment

Interactive Video

Business

University

Hard

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The video discusses structural issues in various industries, focusing on the oil and gas sector's distress and restructuring. It highlights the role of credit default swaps and derivatives, which create perverse incentives for investors. The discussion extends to financial engineering and its impact on bankruptcy processes. The video concludes with potential future economic implications, considering interest rates, global growth, and the rising dollar's effect on U.S. exporters.

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7 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a key reason why oil and gas exploration companies are experiencing distress?

High interest rates

Structural issues

Lack of investors

Government regulations

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What role do opportunistic investors like Blackstone play in restructuring?

They focus on court protection

They provide lifelines to distressed companies

They increase default rates

They discourage restructuring

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How do credit default swaps create challenges for restructuring bankers?

They eliminate the need for court protection

They create perverse incentives for investors

They align the interests of all creditors

They simplify the restructuring process

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Why might some companies not be eligible for credit default insurance?

They are too diversified

They are too small

They have too much cash

They are too risky

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a potential consequence of a rising dollar for U.S. companies?

Higher oil prices

Lower interest rates

Decreased export competitiveness

Increased profitability

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What factor is NOT a primary driver of defaults according to the transcript?

Economic downturns

Credit default swaps

Looming maturities

Higher interest rates

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What might happen if economic growth reverses, according to the transcript?

Interest rates will decrease

The Fed will pump more liquidity

Oil prices will rise

Export-driven companies will thrive