Government-Sponsored Enterprises (GSEs), Naked Shorting, Short Squeeze, and Currency

Project Questions
1. Fannie Mae and Freddie Mac are GSEs. Define GSE with
a brief explanation. (10%)
2. To slow the decline of market values of Fannie Mae, Freddie Mac, and 17 other financial firms, the Securities and Exchange Commission (SEC) suspended naked shorting for a short period.
a. What is a long position in a stock? (5%)
b. What is a short position in a stock? (5%)
c. What is a naked short position in a stock?
(Distinguish between a short and a naked short.) (10%)
d. Are retail investors or traders permitted to naked short a stock? (10%)
e. Who is permitted to naked short a stock (assuming there has been no suspension of this practice)? (5%)
3. a. Following the first SEC suspension of naked shorting (post–June 2008), did other nations follow this practice? (5%)
b. If not, explain why. If so, list a few. (5%)
4. When the temporary suspension of naked shorting was imposed by the SEC, stock prices increased, due to a “short squeeze.” Explain the term “short squeeze.” (10%)
5. The problems with Fannie Mae, Freddie Mac and other financial institutions were said to have been caused by the securitization of risky mortgages issued to uncreditworthy borrowers along with credit default swaps to insure these risky mortgages. The credit default swaps weren’t capitalized—there was nothing available to pay off on these credit default swaps, so when the borrower defaulted on the mortgage and the credit default swap was to be “cashed in,” there was nothing available and these securitized mortgages became worthless. 108 Graded Project
a. Worldwide, what’s the approximate value of credit default swaps in circulation during this period? (5%)
b. How did this amount compare to U.S. and worldwide gross domestic product (GDP) during this period? (5%)
6. a. In what currency is oil traded? (5%)
b. In what currency are credit default swaps traded? (5%)
7. a. Will the U.S. dollar remain the currency of choice? (5%)
b. Have any nations called for a switch from the U.S. dollar? (10%)
Writing Guidelines
1. Type your submission, double-spaced, in a standard print font, size 12. Use a standard document format with 1-inch margins. (Do not use any fancy or cursive fonts.)
2. Include the following information at the top of your paper:
a. Name and complete mailing address
b. Student number
c. Course title and number (International Business, BUS 430)
d. Project number 
3. Read the assignment carefully and answer each question.
Use proper citation in either APA or MLA style.
4. Be specific. Limit your submission to the questions asked and issues mentioned.
5. Include a reference page in either APA or MLA style. On this page, list Web sites, journals, and all other references used in preparing the submission.
6. Proofread your work carefully. Check for correct spelling, grammar, punctuation, and capitalization.
Grading Criteria
Your project will be evaluated according to the following criteria:
Content 80 percent
Written communication 10 percent
Format 10 percent
Here’s a brief explanation of each of these points.
Content
The student
Provides clear answers to the assigned questions
Addresses the questions in complete sentences, not just simple yes-or-no statements
Supports his or her opinion by citing specific information from Web sites and any other references using correct APA or MLA guidelines for citations and references
Stays focused on the assigned issues
Writes in his or her own words and uses quotation marks to indicate direct quotations
Written Communication
The student
Answers each question in one or more complete sentences
Uses correct grammar, spelling, punctuation, and sentence structure
Provides clear organization when necessary (for example, uses words like first, however, on the other hand, and so on, consequently, since, next, and when)
Makes sure the project contains no typographical errors
Format
The paper is double-spaced and typed in font size 12.
It includes the student’s
Name and complete mailing address
 Student number
Course title and number (International Business,
Submitting Your Assignment
Submit your research assignment online using the
following procedure:
1. On your computer, save a revised and corrected version of your project.
2. Go to http://www(dot)pennfoster(dot)edu and log in.
3. Go to Student Portal.
4. Click on Take Exam next to the lesson you’re working on.
5. Enter your e-mail address in the box provided. (Note: This information is required for online submission.)
6. Attach your file or files as follows:
a. Click on the Browse box.
b. Locate the file you wish to attach.
c. Double-click on the file.
d. Click on Upload File