7. Which of the following were NOT a cause of the 2008 financial crisis and recession? (a) Reduction of mortgage underwriting standards. (b) Securitization of sub-standard mortgages. (c) The growth of derivative financial instruments based on the sub-standard mortgages as well as the default-swap derivatives and failure to regulate the market for these derivatives. (d) Deregulation of banking by the Bush Administration.
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(a) Reduction of mortgage underwriting standards.
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(b) Securitization of sub-standard mortgages.
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(c) The growth of derivative financial instruments based on the sub-standard mortgages as well as the default-swap derivatives and failure to regulate the market for these derivatives.
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(d) Deregulation of banking by the Bush Administration.
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- 3. Which of the following statements about the characteristics of debt and equities is true? C 1) They can both be long-term financial instruments. 2) Bond holders are residual claimants. 3) The income from bonds is typically more variable than that from equities 4) Bonds pay dividends. 5) They both involve a claim on the issuer's income 6) More than one answer is correct.4. The Glass-Steagall Act, before its repeal in 1999, prohibited commercial banks from Question 4 options: a) purchasing any debt securities. b) engaging in underwriting and dealing of corporate securities. c) issuing equity to finance bank expansion. d) selling new issues of government securities.11. Interest rate risk is lower for bonds than treasury bills with the same tenor. Is this true or false? Why?
- 10-A financial institution that accepts deposits and gives loans to its members is categorised as: a.Investment bank b.Credit union c.Insurance company d.Underwriter 9-Mahnad invested in the mutual fund units of ABC Company. So, ABC Company is an: a.Underwriter b.Investment bank c.Insurance company d.Investment company 8) The type of Market in which Swap contracts can be bought: a.Inter-bank Market b.Money Market c.Derivative Market d.Forex MarketQUESTION 6 The benefit of establishing a long-term relationship with your banker is to: A. Reduce the likely of moral hazard B. Diminish problems with asymmetric information C. Improve loan terms for the customer D. All of the above8. The "mark to market" rule (a) Created an unrealistic picture of the financial health of some banks. (b) Required banks to recognize in their balance sheet decrease in value of assets as their price declined in the market, instead of waiting until the asset was sold. (c) Caused the net worth of some banks to decline significantly and making it impossible for the banks to make loans. (d) All the above. (e) Only (b) and (c) are true.
- 10 ***For upvote please do not provide copied answers..... What are the 3 conditions that bankers must ensure to manage their assets and liabilities? What is the basic equation that banks use to understand their financial statements? (hint: the answer is extremely close to the basic accounting equation). What are off-balance-sheet activities that banks engage in?.1.Which of the following is not a financial asset? a share of Coca-Cola stock a corporate bond an IOU a piece of real estate a Treasury bond7. 7. Secured loans mean there are usually no collateral or guarantees by a third party to secure the money lent by the bank to the borrowers in case of default. 8. A common fund trader says that the stocks of big listed companies have an equivalent liquidity as that of cash, so his fund should allocate all capital in stocks. True or false. No need explanation
- 1. Statement I. In the Philippines, financial intermediaries are restricted in what they are allowed to do and what assets they can hold.Statement II. Money supply is the availability of financial resources for deployment in the financial system. It is making the money available for use or for trade or investment. a. Both statements are true.b. Both statements are false.c. Statement I is true; Statement II is false.d. Statement I is false; Statement II is true. 2.A commercial paper is defined as, except: a. Unsecured promissory notes that are only issued by large and credit worthy enterprises. b. Directly issued to the buyer, no secondary market. c. May have stated interest rate or sold at discounted basis. d. None of the above2a) Self-regulation, regulation by the government and regulation by a governmental agency are three approaches to the regulation of financial markets. Discuss and explain their differences.19) Adverse selection is a problem associated with equity and debt contracts arising from A) the lender's relative lack of information about the borrower's potential returns and risks of his investment activities. B) the lender's inability to legally require sufficient collateral to cover a 100 percent loss if the borrower defaults. C) the borrower's lack of incentive to seek a loan for highly risky investments. D) none of the above.