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Question
Banks use financial derivatives for all of the following except:a. hedge asset yields.
b. adjust maturities by creating synthetic liabilities.
c. adjust the sensitivity of earnings to changes in interest rates.
d. lock-in the cost of liabilities.
e. Banks use financial derivatives for all of the above.
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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Banks can effectively improve their portfolios by:
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c. reducing diversification when the economy is slowing down.
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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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The static spread is:
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Eurobonds are subject to fewer regulations than U.S. issued bonds.
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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.
d. a product for a foreign currency in the future at a specified time.
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Q:
Non-performing international loans do not completely reflect potential losses because:
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The risk that a foreign government will suspend debt service payments is known as:
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The first type of international office that a bank forms outside its home country that is exploratory in nature is known as:
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Historically, what has prevented universal banks from operating in the United States?
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a. France
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Q:
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a. 1.6%.
b. 2.0%.
c. 4.0%.
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e. 8.6%.
Q:
Prior to the Basle Agreement, primary capital included all of the following except:
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c. undivided profits.
d. perpetual preferred stock.
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Q:
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b. required reserves.
c. FDIC insurance premiums.
d. lost interest income.
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Q:
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b. it reduces required reserves.
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e. it decreases interest income.
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b. It now has excess reserves in the amount of $10,000,000.
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a. start-up capital loans.
b. mezzanine financing.
c. automobile financing.
d. seed money.
e. staff financing.
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What are the firm's estimated working capital needs?a. $90b. $540c. $630d. $1,170e. $2,034
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.
e. often result in the lender's bankruptcy.
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In the credit process, which of the following activities falls under Credit Execution and Administration?
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a. International risk
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c. Continent risk
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.