Question 1.Securitization refers to changing the mix in a financial portfolio away from stocks and toward bonds. selling directly to investors loans or securities that were formerly held by financial intermediaries. banks insisting that collateral be supplied on previously unsecured loans. reducing the exposure of a bank’s portfolio to interest rate risk.
Question 2.Excess reserves equal total reserves less required reserves. required reserves less total reserves. total reserves plus required reserves. required reserves divided by total reserves.
Question 3.Securities that banks sell and agree to repurchase are known as federal funds. discount loans. repurchase agreements. NOW accounts.
Question 4.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 credit risk. interest-rate risk. currency risk. security risk.
Question 5.In managing its liabilities to deal with liquidity problems, banks trade off credit risk against interest rate risk. adverse selection against moral hazard. the need for available funds to meet deposit outflows against the desire for greater profit. present tax liabilities against future tax liabilities.
Question 6.The difference between a savings deposit and a time deposit is
time deposits pay no interest. savings deposits pay no interest. time deposits have specified maturities. savings deposits have specified maturities.
Question 7.Any reserves beyond what is required are called required reserves. excess reserves. secondary reserves. bank capital.
Question 8.In order to reduce the likelihood of excessive leverage in the banking system, governments have traditionally imposed capital requirements on commercial banks. imposed capital requirement on investment banks. imposed capital requirements on both commercial and investment banks. imposed asset requirements on all banks.
Question 9.Short-term loans between banks are called federal funds. repurchase agreements. repos. discount loans.
Question 10.The development of new financial securities or investment strategies using sophisticated models is known as underwriting. factoring. financial engineering. hedging.
Need Other Tutorials For ECO 316 ?
You may click on the links below to go to respective tutorial. · ECO 316 Week 1 DQ 1 ( Money And Its Functions )
· ECO 316 Week 1 DQ 2 ( Bond Prices and Interest Rates )
· ECO 316 Week 1 Quiz
· ECO 316 Week 2 DQ 1 ( Models of Bond Pricing )
· ECO 316 Week 2 DQ 2 ( Risk and Reward )
· ECO 316 Week 2 Quiz
· ECO 316 Week 3 Assignment ( Final Paper Outline )
· ECO 316 Week 3 DQ 1 ( Stocks And Derivatives )
· ECO 316 Week 3 DQ 2 ( Foreign Exchange Rates )
· ECO 316 Week 3 Quiz
· ECO 316 Week 4 Assignment ( Bank operations using T accounts )
· ECO 316 Week 4 DQ 1 ( Structures and Functions of Financial Institutions )
· ECO 316 Week 4 DQ 2 ( Structures and Function of the Federal Reserve System )
· ECO 316 Week 4 Quiz
· ECO 316 Week 5 Assignment ( Final Paper – The Day the Machines Went off )
· ECO 316 Week 5 DQ 1 ( Potential Money Multiplier )
· ECO 316 Week 5 DQ 2 ( Current Monetary Policy )