Imagine you are the Chief adviser to the Australian Prime Minister.
1) Clearly explain to him the meaning of 'subprime debt'? What are the risks and advantages of such financial instruments?
a) What is a CDO?
b) What is LIBOR and what are the advantages and limitations of the LIBOR?
c) What drives interbank rates?
In answering the questions for this project, you will be required to use a variety of references and the international finance concepts learnt in this unit.