Exam 5: The Continuing Global Financial Crisis

The credit crisis was worsened by the destabilizing effects of speculators, in a variety of different institutions, betting that particular instruments or markets or securities would fail.

(True/False)

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Question 21

A ________ is a securitized financial instrument that is sold to the market in tranches representing different levels of default risk.

(Multiple Choice)

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Question 22

Alt-A mortgage loans are NOT eligible for sale to GSEs such as Fannie Mae or Freddie Mac.

(True/False)

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Question 23

________ is the method of making investments more attractive to prospective buyers by reducing their perceived risk.

(Multiple Choice)

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Question 24

Investment banks and stock brokerages have traditionally been regulated by the:

(Multiple Choice)

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Question 25

The accounting procedure whereby assets are revalued to market value basis on a daily basis is known as:

(Multiple Choice)

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Question 26

Subprime mortgages did not exceed 8% of all outstanding mortgage obligations by 2007, but by the end of 2008 they were the source of 65% of bankruptcy filings by homeowners in the United States.

(True/False)

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Question 27

In October 2009, the new government of Greece estimated the size of the 2009 government budget deficit as 12.7% of GDP rather than the previously published:

(Multiple Choice)

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Question 28

Mortgage loans in the U.S. are classified by risk into one of three types: prime, alt-A, and sub-prime.

(True/False)

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Question 29

Near the end of the U.S. housing boom, many of the mortgages classified as Alt-A were in fact sub-prime.

(True/False)

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Question 30

In finance, a liquid asset:

(Multiple Choice)

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Question 31

Which of the following is NOT another term for a prime mortgage loan?

(Multiple Choice)

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Question 32

Ireland and Greece had the same issues lead to their financial crises in 2009. In each case, the previous government had dramatically understated the size of their federal budget deficit as a percentage of GDP.

(True/False)

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Question 33

From 1990 through 2007, the amount of securitized loans outstanding dropped from over $25 trillion to less than $5 trillion and was a key element in the loss of market liquidity.

(True/False)

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Question 34

Bear-Stearns is the largest single bankruptcy in U.S. history.

(True/False)

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Question 35

The authors conclude the chapter with a specific road map for future financial regulation.

(True/False)

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Question 36

Future financial market regulation must include all of the following EXCEPT:

(Multiple Choice)

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Question 37

The European Financial Stability Facility (EFSF)has a mandate to safeguard financial stability in Europe by providing financial assistance to euro area Member States.

(True/False)

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Question 38

Which of the following is NOT identified by the authors as a "safe-haven" currency?

(Multiple Choice)

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Question 39

LIBOR stand for the London Interbank Offered Rate.

(True/False)

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Question 40

Showing 21 - 40 of 47

The credit crisis was worsened by the destabilizing effects of speculators, in a variety of different institutions, betting that particular instruments or markets or securities would fail.

A ________ is a securitized financial instrument that is sold to the market in tranches representing different levels of default risk.

Alt-A mortgage loans are NOT eligible for sale to GSEs such as Fannie Mae or Freddie Mac.

________ is the method of making investments more attractive to prospective buyers by reducing their perceived risk.

Investment banks and stock brokerages have traditionally been regulated by the:

The accounting procedure whereby assets are revalued to market value basis on a daily basis is known as:

Subprime mortgages did not exceed 8% of all outstanding mortgage obligations by 2007, but by the end of 2008 they were the source of 65% of bankruptcy filings by homeowners in the United States.

In October 2009, the new government of Greece estimated the size of the 2009 government budget deficit as 12.7% of GDP rather than the previously published:

Mortgage loans in the U.S. are classified by risk into one of three types: prime, alt-A, and sub-prime.

Near the end of the U.S. housing boom, many of the mortgages classified as Alt-A were in fact sub-prime.

In finance, a liquid asset:

Which of the following is NOT another term for a prime mortgage loan?

Ireland and Greece had the same issues lead to their financial crises in 2009. In each case, the previous government had dramatically understated the size of their federal budget deficit as a percentage of GDP.

From 1990 through 2007, the amount of securitized loans outstanding dropped from over $25 trillion to less than $5 trillion and was a key element in the loss of market liquidity.

Bear-Stearns is the largest single bankruptcy in U.S. history.

The authors conclude the chapter with a specific road map for future financial regulation.

Future financial market regulation must include all of the following EXCEPT:

The European Financial Stability Facility (EFSF)has a mandate to safeguard financial stability in Europe by providing financial assistance to euro area Member States.

Which of the following is NOT identified by the authors as a "safe-haven" currency?

LIBOR stand for the London Interbank Offered Rate.

Current Multinational Challenges and the Global Economy

Corporate Ownership, Goals, and Governance

The International Monetary System

The Balance of Payments

The Foreign Exchange Theory and Markets

International Parity Conditions

Foreign Currency Derivatives and Swaps

Foreign Exchange Rate Determination and Forecasting

Transaction Exposure

Translation Exposure

Operating Exposure

The Global Cost and Availability of Capital

Raising Equity and Debt Globally

Multinational Tax Management

International Portfolio Theory and Diversification

Foreign Direct Investment and Political Risk

Multinational Capital Budgeting and Cross-Border Acquisitions

Working Capital Management

International Trade Finance

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