Risk Management at Wellfleet Bank: All That Glitters Is Not Gold

3034 Words13 Pages
31. The _______ is the party that lends the funds in a commercial bill transaction. A: acceptor B: discounter C: drawer D: endorser B 32. In relation to a commercial bill, the acceptance fee is: A: the discounter’s fee for taking on the risks associated with discounting the bill B: the fee for drawing up the bill C: the fee for taking the liability for paying the holder at maturity D: the drawer’s fee for taking on the risks associated with drawing the bill. C 33. When a party endorses a bank bill, it: A: repays the face value of the bill to the holder at maturity B: creates a liability for payment of the bill C: provides the funds to the seller D: provides the funds to the discounter of the bill. B 34. A company…show more content…
A 48. Under the expectations theory, if market participants expect future short-term rates to be higher than current short-term rates, the yield curve will: A: be upward sloping B: be downward sloping C: be flat D: slope upward or downward or be flat, depending on risk and liquidity considerations. A 49. If the yield curve is observed to be flat, then according to the liquidity premium theory, this in-dicates that the market is predicting: A: a small rise in short-term rates in the near future and a small decline further out in the fu-ture B: constant short-term interest rates in the near future, and further out in the future C: a small decline in short-term interest rates in the near future, continuing to decline slowly further out in the future D: constant short-term interest rates in the near future and a small decline further out in the future. A 50. Which of the following statements about segmented markets theory is correct? A: It assumes that lenders always lend for short periods. B: It assumes that borrowers have particular periods for which they want to borrow. C: It gives a good explanation of why yield curves usually slope upward. D: It assumes that all bonds are perfect substitutes for each other. B 51. Most of the foreign exchange transactions are conducted: A: by governments B: by tourists C: in the over-the-counter market D: on the Australian Stock Exchange. C 52. If

More about Risk Management at Wellfleet Bank: All That Glitters Is Not Gold

Open Document