Question 1

"Nonbank" financial institutions include all of the following EXCEPT

Accepted Answer

A)  investment banks. 
B)  hedge funds. 
C)  the Federal Reserve. 
D)  mutual funds. 
A)  investment banks. 
B)  hedge funds. 
C)  the Federal Reserve. 
D)  mutual funds. C

Question 2

Which of the following are statisticians who compile statistics to predict the risk of an event occurring in the population?

Accepted Answer

A)  rocket scientists 
B)  quants 
C)  actuaries 
D)  risk analysts 
A)  rocket scientists 
B)  quants 
C)  actuaries 
D)  risk analysts C

Question 3

In 2016,federal regulators proposed that at least half of the bonuses investment banks pay top managers

Accepted Answer

A)  be paid back to the federal government as compensation for the bailouts during the financial crisis. 
B)  be paid in the form of stock options. 
C)  be deferred for four years. 
D)  be completely eliminated. 
A)  be paid back to the federal government as compensation for the bailouts during the financial crisis. 
B)  be paid in the form of stock options. 
C)  be deferred for four years. 
D)  be completely eliminated. C

Question 4

Why did Goldman Sachs and Morgan Stanley seek to become financial holding companies in October 2008?

Accepted Answer

As financial holding companies,Goldman S

Question 5

In 1981,the first of the large investment banks to convert from a partnership to a corporation was

Accepted Answer

A)  Lehman Brothers. 
B)  Bear Stearns. 
C)  Salomon Brothers. 
D)  AIG. 
A)  Lehman Brothers. 
B)  Bear Stearns. 
C)  Salomon Brothers. 
D)  AIG.

Question 6

Vesting refers to

Accepted Answer

A)  the right of the holder of an insurance policy to collect for an insurable event. 
B)  the shielding of returns on whole life policies from taxation. 
C)  the length of service required of an employee before he or she is eligible for a pension. 
D)  the payments made by an employee into a pension plan. 
A)  the right of the holder of an insurance policy to collect for an insurable event. 
B)  the shielding of returns on whole life policies from taxation. 
C)  the length of service required of an employee before he or she is eligible for a pension. 
D)  the payments made by an employee into a pension plan.

Question 7

The resolution plans of an investment bank that "must describe the company's strategy for rapid and orderly resolution in the event of material financial distress or failure of the company" is called a

Accepted Answer

A)  living will. 
B)  golden parachute. 
C)  prospectus. 
D)  reorganization plan. 
A)  living will. 
B)  golden parachute. 
C)  prospectus. 
D)  reorganization plan.

Question 8

Suppose an investment bank buys $100 million worth of mortgage-backed securities.It finances the purchase by borrowing $90 million and using $10 million from its equity.If the value of holdings of mortgage-backed securities declines by 5%,what is its return on equity investment?

Accepted Answer

Its leverage ratio is $100 mil

Question 9

By the 1990s,most economists supported the repeal of the Glass-Steagall Act,arguing that the separation of commercial banking from investment banking ________ competition in the market for investment banking services and ________ opportunities for economies of scope in banking.

Accepted Answer

A)  increased; increased 
B)  increased; reduced 
C)  reduced; increased 
D)  reduced; reduced 
A)  increased; increased 
B)  increased; reduced 
C)  reduced; increased 
D)  reduced; reduced

Question 10

How does an investment bank use the results of its research?

Accepted Answer

The investment bank uses some of the res

Question 11

Entry-level hires in investment banking firms are usually called

Accepted Answer

A)  associates. 
B)  analysts. 
C)  managers. 
D)  newbies. 
A)  associates. 
B)  analysts. 
C)  managers. 
D)  newbies.

Question 12

To deal with difficulties in administering pension funds,Congress in 1974 passed the

Accepted Answer

A)  Corrupt Pension Fund Reform Act. 
B)  Securities and Exchange Act. 
C)  Employee Retirement Income Security Act. 
D)  Social Security Act. 
A)  Corrupt Pension Fund Reform Act. 
B)  Securities and Exchange Act. 
C)  Employee Retirement Income Security Act. 
D)  Social Security Act.

Question 13

Which of the following groups is an investment bank NOT likely to visit during a "road show"?

Accepted Answer

A)  institutional investors 
B)  individual investors 
C)  university endowments 
D)  mutual funds 
A)  institutional investors 
B)  individual investors 
C)  university endowments 
D)  mutual funds

Question 14

What are some reasons that hedge funds have become controversial?

Accepted Answer

First,while mutual fund managers typical

Question 15

Which type of offering typically has the lowest fees?

Accepted Answer

A)  initial public offering of stocks 
B)  secondary offering 
C)  offering of investment-grade bonds 
D)  offering of non-investment-grade bonds 
A)  initial public offering of stocks 
B)  secondary offering 
C)  offering of investment-grade bonds 
D)  offering of non-investment-grade bonds

Question 16

Which of the following is a term for the total value of a firm's outstanding shares?

Accepted Answer

A)  market value 
B)  intrinsic value 
C)  fair value 
D)  fairness value 
A)  market value 
B)  intrinsic value 
C)  fair value 
D)  fairness value

Question 17

In 2016,state and local government pension plans were estimated to be

Accepted Answer

A)  overfunded by a total of $10 billion. 
B)  underfunded by a total of $150 billion. 
C)  underfunded by a total of $500 billion. 
D)  underfunded by a total of $1 trillion. 
A)  overfunded by a total of $10 billion. 
B)  underfunded by a total of $150 billion. 
C)  underfunded by a total of $500 billion. 
D)  underfunded by a total of $1 trillion.

Question 18

The Glass-Steagall Act was designed to

Accepted Answer

A)  legally separate investment banking from commercial banking. 
B)  promote mergers in the banking industry. 
C)  impose high capital ratios on investment banks. 
D)  promote the interests of community banks. 
A)  legally separate investment banking from commercial banking. 
B)  promote mergers in the banking industry. 
C)  impose high capital ratios on investment banks. 
D)  promote the interests of community banks.

Question 19

The risk that increased market interest rates will cause a decline in the value of an investment bank's holdings of long-term securities is known as

Accepted Answer

A)  credit risk. 
B)  interest-rate risk. 
C)  currency risk. 
D)  security risk. 
A)  credit risk. 
B)  interest-rate risk. 
C)  currency risk. 
D)  security risk.

Question 20

The portfolios that mutual funds offer to savers are

Accepted Answer

A)  usually made up of bonds. 
B)  usually made up of common stocks. 
C)  tax free in most states. 
D)  usually more liquid than the underlying assets. 
A)  usually made up of bonds. 
B)  usually made up of common stocks. 
C)  tax free in most states. 
D)  usually more liquid than the underlying assets.

"Nonbank" financial institutions include all of the following EXCEPT

Which of the following are statisticians who compile statistics to predict the risk of an event occurring in the population?

In 2016,federal regulators proposed that at least half of the bonuses investment banks pay top managers

Why did Goldman Sachs and Morgan Stanley seek to become financial holding companies in October 2008?

In 1981,the first of the large investment banks to convert from a partnership to a corporation was

Vesting refers to

The resolution plans of an investment bank that "must describe the company's strategy for rapid and orderly resolution in the event of material financial distress or failure of the company" is called a

Suppose an investment bank buys $100 million worth of mortgage-backed securities.It finances the purchase by borrowing $90 million and using $10 million from its equity.If the value of holdings of mortgage-backed securities declines by 5%,what is its return on equity investment?

By the 1990s,most economists supported the repeal of the Glass-Steagall Act,arguing that the separation of commercial banking from investment banking competition in the market for investment banking services and opportunities for economies of scope in banking.

How does an investment bank use the results of its research?

Entry-level hires in investment banking firms are usually called

To deal with difficulties in administering pension funds,Congress in 1974 passed the

Which of the following groups is an investment bank NOT likely to visit during a "road show"?

What are some reasons that hedge funds have become controversial?

Which type of offering typically has the lowest fees?

Which of the following is a term for the total value of a firm's outstanding shares?

In 2016,state and local government pension plans were estimated to be

The Glass-Steagall Act was designed to

The risk that increased market interest rates will cause a decline in the value of an investment bank's holdings of long-term securities is known as

The portfolios that mutual funds offer to savers are

Introducing Money and the Financial System

Money and the Payments System

Interest Rates and Rates of Return

Determining Interest Rates

The Risk Structure and Term Structure of Interest Rates

The Stock Market, information, and Financial Market Efficiency

Derivatives and Derivative Markets

The Market for Foreign Exchange

Transactions Costs, asymmetric Information, and the Structure of the Financial System

The Economics of Banking

Financial Crises and Financial Regulation

The Federal Reserve and Central Banking

The Federal Reserves Balance Sheet and the Money Supply Process

Monetary Policy

The International Financial System and Monetary Policy

Monetary Theory I- the Aggregate Demand and Aggregate Supply Model

Monetary Theory Ii: the Is-Mp Model

Filters

Exam 11: Beyond Commercial Banks: Shadow Banks and Nonbank Financial Institutions

"Nonbank" financial institutions include all of the following EXCEPT

Which of the following are statisticians who compile statistics to predict the risk of an event occurring in the population?

In 2016,federal regulators proposed that at least half of the bonuses investment banks pay top managers

Why did Goldman Sachs and Morgan Stanley seek to become financial holding companies in October 2008?

In 1981,the first of the large investment banks to convert from a partnership to a corporation was

Vesting refers to

The resolution plans of an investment bank that "must describe the company's strategy for rapid and orderly resolution in the event of material financial distress or failure of the company" is called a

Suppose an investment bank buys $100 million worth of mortgage-backed securities.It finances the purchase by borrowing $90 million and using $10 million from its equity.If the value of holdings of mortgage-backed securities declines by 5%,what is its return on equity investment?

By the 1990s,most economists supported the repeal of the Glass-Steagall Act,arguing that the separation of commercial banking from investment banking ________ competition in the market for investment banking services and ________ opportunities for economies of scope in banking.

How does an investment bank use the results of its research?

Entry-level hires in investment banking firms are usually called

To deal with difficulties in administering pension funds,Congress in 1974 passed the

Which of the following groups is an investment bank NOT likely to visit during a "road show"?

What are some reasons that hedge funds have become controversial?

Which type of offering typically has the lowest fees?

Which of the following is a term for the total value of a firm's outstanding shares?

In 2016,state and local government pension plans were estimated to be

The Glass-Steagall Act was designed to

The risk that increased market interest rates will cause a decline in the value of an investment bank's holdings of long-term securities is known as

The portfolios that mutual funds offer to savers are

Introducing Money and the Financial System

Money and the Payments System

Interest Rates and Rates of Return

Determining Interest Rates

The Risk Structure and Term Structure of Interest Rates

The Stock Market, information, and Financial Market Efficiency

Derivatives and Derivative Markets

The Market for Foreign Exchange

Transactions Costs, asymmetric Information, and the Structure of the Financial System

The Economics of Banking

Financial Crises and Financial Regulation

The Federal Reserve and Central Banking

The Federal Reserves Balance Sheet and the Money Supply Process

Monetary Policy

The International Financial System and Monetary Policy

Monetary Theory I- the Aggregate Demand and Aggregate Supply Model

Monetary Theory Ii: the Is-Mp Model

Filters

By the 1990s,most economists supported the repeal of the Glass-Steagall Act,arguing that the separation of commercial banking from investment banking competition in the market for investment banking services and opportunities for economies of scope in banking.