Podcast
Questions and Answers
What was a significant consequence of the Stock Crash of 1929?
What was a significant consequence of the Stock Crash of 1929?
Which factor is commonly associated with causing banking panics?
Which factor is commonly associated with causing banking panics?
The Asian Financial Crisis of 1997–1998 is an example of what type of economic event?
The Asian Financial Crisis of 1997–1998 is an example of what type of economic event?
What was a common feature of the financial crises of the 19th, 20th, and 21st centuries?
What was a common feature of the financial crises of the 19th, 20th, and 21st centuries?
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Which of the following is NOT a direct example of a financial crisis?
Which of the following is NOT a direct example of a financial crisis?
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What can a rapid selloff in the stock market lead to?
What can a rapid selloff in the stock market lead to?
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What impact did rumors of bank failures typically have on individuals?
What impact did rumors of bank failures typically have on individuals?
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Which of the following financial events is most directly linked to a recession?
Which of the following financial events is most directly linked to a recession?
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What is typically reflected as a low credit score?
What is typically reflected as a low credit score?
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What characterizes subprime lending?
What characterizes subprime lending?
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Which country was NOT significantly affected during the Asian financial crisis of 1997–1998?
Which country was NOT significantly affected during the Asian financial crisis of 1997–1998?
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What happens to borrowers with bad credit when seeking loans?
What happens to borrowers with bad credit when seeking loans?
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What was a significant economic consequence of the Asian financial crisis?
What was a significant economic consequence of the Asian financial crisis?
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Which lending practice has contributed to financial crises in the past?
Which lending practice has contributed to financial crises in the past?
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During the Asian financial crisis, which region experienced significant economic impacts?
During the Asian financial crisis, which region experienced significant economic impacts?
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Which of the following is a feature of borrowers identified as subprime?
Which of the following is a feature of borrowers identified as subprime?
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What typically happens during a financial crisis?
What typically happens during a financial crisis?
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Which of the following is NOT commonly associated with a financial crisis?
Which of the following is NOT commonly associated with a financial crisis?
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Which of the following factors does NOT contribute to a financial crisis?
Which of the following factors does NOT contribute to a financial crisis?
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What best describes a situation that might lead to a financial crisis?
What best describes a situation that might lead to a financial crisis?
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Which scenario illustrates herd behavior that can cause a financial crisis?
Which scenario illustrates herd behavior that can cause a financial crisis?
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Which economic outcome may result from a financial crisis?
Which economic outcome may result from a financial crisis?
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What type of market behavior is characterized by overvaluation of assets?
What type of market behavior is characterized by overvaluation of assets?
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Which of the following is a potential result of a financial crisis on a global scale?
Which of the following is a potential result of a financial crisis on a global scale?
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Study Notes
Course Code and Title
- KOC3436: Practice Ethics and Financial Communication (Prinsip dan Etika Komunikasi Kewangan)
Financial Crisis/Krisis Kewangan
- In a financial crisis, asset prices fall sharply, businesses and consumers struggle to pay debts, and financial institutions face liquidity issues.
- A financial crisis is often linked to a panic or bank run where investors sell assets rapidly due to fear of devaluation.
- Other possible causes include bursting financial bubbles, stock market crashes, sovereign defaults, and currency crises.
- Financial crises can impact individual banks, a single economy, a region, or multiple economies.
What Causes a Financial Crisis?
- Overvalued institutions or assets
- Irrational investor behavior, like rapid sell-offs leading to lower asset prices
- Banking panics dating back to the 19th, 20th, and 21st centuries, frequently linked to recessions or depressions
- Stock market crashes, credit crunches, bursting bubbles, currency crises
Financial Crisis Examples
- Stock Crash of 1929: A speculative boom followed by a sharp decline in share prices, leading to the Great Depression. Oversupply of commodities triggered this decline.
- Asian Crisis of 1997–1998: The Thai baht's collapse triggered massive devaluation across East Asian economies, affecting Indonesia, South Korea, and Thailand.
- 2007–2008 Global Financial Crisis: A subprime mortgage crisis in the US spread globally, leading to bank failures and a severe recession. This was the worst economic crisis since the 1929 crash.
Value Investing
- Value investing is a method of buying undervalued stocks based on good fundamentals, trading below their intrinsic value.
- Value stocks are often found in large, stable companies with strong fundamentals, good products, and a leading market position.
Warren Buffett Investment Tips
- Develop an investment mindset
- Understand what an investment truly is
- Invest in what you understand
- Buy better-performing companies than glamorous ones
- Don't panic during economic downturns
- Buy high-performing companies
- Buy undervalued stocks (cheap)
- Invest long-term
Warren Buffett Techniques for Investing in Stocks
- Avoid companies experiencing significant changes in their business model or product offerings.
- Avoid companies requiring extensive research and development to keep pace with evolving technology.
- Focus on companies offering products/services in high demand, regardless of economic conditions.
- Ensure the company has a clear competitive edge, allowing it to increase its market value.
How Benjamin Graham Chooses High Value Shares
- Identify companies with positive earnings per share (EPS) that have grown over the last 5 years, without incurring losses.
- Prioritize companies that consistently pay dividends.
- Don't always seek the "best" company, aiming instead for solid, reasonably priced options.
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Description
Explore the key factors leading to financial crises in this quiz. Understand the role of asset valuation, investor behavior, and historical banking panics intimately linked to economic downturns. Test your knowledge on the events and theories surrounding financial communication ethics.
