322-4

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Author:
SAngell3
ID:
222406
Filename:
322-4
Updated:
2013-06-04 13:31:23
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322
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322-4
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  1. In April 2009, the unemployment rate in the U.S. had climbed to nearly 11%, a number not seen in the previous 30 years.  

    A) True  
    B) False
    B) False
  2. A traditional mortgage contract requires 20% of the sale price of the house to be paid upfront by the borrower.  

    A) True  
    B) False
    A) True  
  3. CDOs are variants of the MBS and have pools of mortgages with several tranches designed to share risk among investors with differing risk preferences.  

    A) True  
    B) False
    B) False
  4. Investment banks are regulated by the Federal Reserve.  

    A) True  
    B) False
    B) False
  5. The proposed Consumer Financial Protection Agency would be designed to consolidate consumer protection in financial markets into one agency.  

    A) True  
    B) False
    A) True  
  6. The decline in the stock market and the housing market accounted for about _______ of the loss of the collective net worth of households between September 2007 and December 2008.  

    A) one-third  
    B) two-thirds  
    C) three-quarters  
    D) one-half  
    E) none of the above
    C) three-quarters  
    (this multiple choice question has been scrambled)
  7. In 2007, the volume of new issues of mortgage-backed securities had risen to:  

    A) $6.81 trillion.  
    B) $7.27 trillion.  
    C) $8.53 trillion.  
    D) $9.20 trillion.  
    E) none of the above
    B) $7.27 trillion.
    (this multiple choice question has been scrambled)
  8. A financial instrument that acts as "insurance" against default on a bond, but which does not require "insurable interest" by the purchaser in the entity being insured, is called:  

    A) a CDO.  
    B) false insurance.  
    C) a naked CDS.  
    D) an ABS.  
    E) none of the above
    C) a naked CDS.
    (this multiple choice question has been scrambled)
  9. Assets with high levels of poorly-understood risk are known as:  

    A) ABSs.  
    B) bad money.  
    C) toxic assets.  
    D) financial derivatives.  
    E) none of the above
    C) toxic assets.
    (this multiple choice question has been scrambled)
  10. Hidden risk that links many areas of a sector or economy together is called:  

    A) systematic risk.  
    B) symptomatic risk.  
    C) toxic risk.  
    D) pervasive risk.  
    E) none of the above
    E) none of the above

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