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Question
A savings and loan that sold off their junk bond holdings and issued consumer auto loans with the proceed would most likely be:a. decreasing their market risk.
b. increasing their capital risk.
c. decreasing their legal risk.
d. increasing their operating risk.
e. reducing their credit risk.
Answer
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Related questions
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Which of the following is not true regarding collateralized mortgage obligations (CMOs)?
a. Interest earned on CMOs is exempt from state income taxes.
b. CMO yields are generally higher than comparable Treasury yields.
c. CMOs exhibit little default risk.
d. All of the above are true.
e. Only a. and c. are true.
Q:
Regulators generally prohibit banks from purchasing ____________ for income purposes.
a. Treasury bills
b. commercial paper
c. common stock
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b. A Lubbock County general obligation bond to build a new sewer plant.
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b. obtaining less call protection when rates are expected to fall.
c. reducing diversification when the economy is slowing down.
d. increasing bond quality when quality yield spreads are low.
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An investor can invest in either a tax-exempt security that pays 5% or a taxable corporate security of comparable risk and maturity that pays 8%. At what marginal tax rate will the investor be indifferent between these two securities?
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Q:
Eurobonds are subject to fewer regulations than U.S. issued bonds.
Q:
A forward market exchange in foreign currencies is an agreement to exchange:
a. currencies in the future at an unspecified time at an exchange rate determined at the time the contract is agreed to.
b. currencies in the future at a specified time at an unknown exchange rate.
c. currencies in the future at an unspecified time at an unknown exchange rate.
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Q:
Non-performing international loans do not completely reflect potential losses because:
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b. banks often loan borrowers funds to make payments on existing loans.
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The risk that a foreign government will suspend debt service payments is known as:
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Q:
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Historically, what has prevented universal banks from operating in the United States?
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b. The Glass-Stegall Act
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Q:
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Q:
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a. 1.6%.
b. 2.0%.
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Q:
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c. undivided profits.
d. perpetual preferred stock.
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When increasing liabilities to meet liquidity needs, a bank should consider all of the following except:
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Q:
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Q:
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c. automobile financing.
d. seed money.
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Q:
Loan covenants:
a. protect the borrower from lender interference in management.
b. are limited to "negative" provisions.
c. may limit discretionary cash outlays by borrowers.
d. are seldom enforced.
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Q:
In the credit process, which of the following activities falls under Credit Execution and Administration?
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d. Country risk
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a. a good faith deposit.
b. a loan against the repurchase agreement.
c. a risk-free guarantee.
d. the difference between the market value of the collateral and the amount of the loan.
e. all of the above.