US$,$ UK$,$ and other Western European countries passed comprehensive sanctions on Russia.

One important type of such sanctions includes freezing assets of Russian individuals, and businesses in US$/$UK$/$European owned banks, or freezing assets of Russian banks in those countries altogether.

Let's focus on large US banks with operations in Russia such as Citibank or JP Morgan Chase.

What impact will these sanctions likely have on those banks?

Question $17$ Answer

a$.$

Drop in revenues, drop in stock price, increased losses from default $($non$-$payment of debt$),$ higher beta, higher ERP.

b$.$

Drop in revenues, drop in stock price, increased losses from default $($non$-$payment of debt$),$ lower beta, higher ERP.

c$.$

No change in revenues, increase in stock price, increased losses from default $($non$-$payment of debt$),$ no change in beta, no change in ERP

d$.$

No change in revenues, no change in stock price, increased losses from default $($non$-$payment of debt$),$ no change in beta, higher ERP.

Give your reasons