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6 a. Estimating the cash flows. * b. Determining the length of time the asset is held. c. Determining the appropriate discount rate. d. Discounting the expected cash flows. e. All of the above. [M] TEST BANK CAPITAL MARKETS: INSTITUTIONS […]

60 a. The buyer agrees to take delivery of an asset at a specified price at the end of a designated period of time. b. The value of the futures contract is derived from the value of the underlying instrument. […]

66 a. An American option. * b. A European option. c. An OTC option. d. An exchange-traded option. e. None of the above. [M] TEST BANK CAPITAL MARKETS: INSTITUTIONS AND INSTRUMENTS FABOZZI/MODIGLIANI Chapter 11 INTRODUCTION TO OPTIONS MARKETS MULTIPLE CHOICE […]

72 a. In interest rate swap. b. An equity swap. * c. An interest rate-equity swap. d. An index swap. e. A currency swap. [M] TEST BANK CAPITAL MARKETS: INSTITUTIONS AND INSTRUMENTS FABOZZI/MODIGLIANI Chapter 12 INTRODUCTION TO THE SWAPS, CAPS, […]

77 a. The American Stock Exchange. b. The Philadelphia Stock Exchange. * c. The New York Stock Exchange. d. The London Stock Exchange. e. None of the above. [E] TEST BANK CAPITAL MARKETS: INSTITUTIONS AND INSTRUMENTS FABOZZI/MODIGLIANI Chapter 13 COMMON […]

83 a. 100 shares of stock. * b. Less than a round lot. c. A block trade. d. Less than 100 shares of stock. e. b and d only. [E] TEST BANK CAPITAL MARKETS: INSTITUTIONS AND INSTRUMENTS FABOZZI/MODIGLIANI Chapter 14 […]

89 a. Computes a fair option price. b. Derives the price for a European call option. c. Prices options written on a nondividend-paying stock. d. b and c only. * e. All of the above. [M] TEST BANK CAPITAL MARKETS: […]

95 a. Delivers all the stocks that make up the index. * b. Pays cash to the option buyer.* c. Takes an offsetting position. d. Lets the option expire worthless. e. None of the above. [M] TEST BANK CAPITAL MARKETS: […]

101 a. Rises from the left to the right. b. Assumes that the more is invested, the more will be the resulting future output. c. Assumes decreasing returns to scale. d. Has a slope, which measures the marginal productivity of […]

107 * a. Present value of the payments that the debtor is required to make until maturity. b. Present value of all expected cash dividends. c. Present value of the maturity value. d. Future value of all expected future cash […]

113 a. Theoretical spot rates. b. The market’s consensus of future interest rates. c. Discount rate. * d. a and b only. e. All of the above. [M] TEST BANK CAPITAL MARKETS: INSTITUTIONS AND INSTRUMENTS FABOZZI/MODIGLIANI Chapter 19 THE TERM […]

12 a. An investment company buys a portfolio of stocks and bonds. b. An individual makes a deposit at a commercial bank. c. Owning an equity claim against an investment company. * d. a and b only. e. All of […]

119 a. Commercial paper. b. Bankers acceptances. c. Certificates of deposits. * d. b and c only. e. All of the above. [E] TEST BANK CAPITAL MARKETS: INSTITUTIONS AND INSTRUMENTS FABOZZI/MODIGLIANI Chapter 20 MONEY MARKETS MULTIPLE CHOICE 1. The money […]

125 a. Treasury bills. * b. Treasury bonds. c. Treasury strips. d. Cash management bills. e. None of the above. [E] TEST BANK CAPITAL MARKETS: INSTITUTIONS AND INSTRUMENTS FABOZZI/MODIGLIANI Chapter 21 TREASURY AND AGENCY SECURITIES MARKETS MULTIPLE CHOICE 1. The […]

131 a. The yield on a similar maturity Treasury issue. b. Risk premium. c. A credit spread. * d. a and c only. e. All of the above. [M] TEST BANK CAPITAL MARKETS: INSTITUTIONS AND INSTRUMENTS FABOZZI/MODIGLIANI Chapter 22 CORPORATE […]

137 a. Maturity. b. Security. c. Provisions for retirement. d. a and b only. * e. All of the above. [M] TEST BANK CAPITAL MARKETS: INSTITUTIONS AND INSTRUMENTS FABOZZI/MODIGLIANI Chapter 23 CORPORATE SENIOR INSTRUMENTS MARKETS: II MULTIPLE CHOICE 1. Preferred […]

143 a. General obligation debt. b. Appropriation-backed obligations. c. Moral obligation bonds. d. Debt obligations supported by public credit enhancement programs. * e. All of the above. [E] TEST BANK CAPITAL MARKETS: INSTITUTIONS AND INSTRUMENTS FABOZZI/MODIGLIANI Chapter 24 MUNICIPAL SECURITIES […]

149 a. Origination fees. b. Secondary market profits. c. Servicing fees. d. a and b only. * e. All of the above. [M] TEST BANK CAPITAL MARKETS: INSTITUTIONS AND INSTRUMENTS FABOZZI/MODIGLIANI Chapter 25 THE RESIDENTIAL MORTGAGE MARKET MULTIPLE CHOICE 1. […]

155 a. Absorb the credit risk. b. Service the mortgage. c. Provide the funding. d. b and c only. * e. All of the above. [M] TEST BANK CAPITAL MARKETS: INSTITUTIONS AND INSTRUMENTS FABOZZI/MODIGLIANI Chapter 26 THE MARKET FOR RESIDENTIAL […]

161 a. Credit card receivables. b. Home equity loans. c. Auto loans. * d. a and b only. e. All of the above. [M] TEST BANK CAPITAL MARKETS: INSTITUTIONS AND INSTRUMENTS FABOZZI/MODIGLIANI Chapter 27 MARKET FOR ASSET-BACKED SECURITIES MULTIPLE CHOICE […]

Copyright © 2010 Pearson Education Inc. Publishing as Prentice Hall TEST BANK CAPITAL MARKETS: INSTITUTIONS AND INSTRUMENTS FABOZZI/MODIGLIANI Chapter 28 MARKET FOR COMMERCIAL MORTGAGE LOANS AND COMMERCIAL MORTGAGE-BACKED SECURITIES Multiple Choice Questions 1 Commercial Mortgage Loans 1) Commercial mortgage loans […]

24 TEST BANK CAPITAL MARKETS: INSTITUTIONS AND INSTRUMENTS FABOZZI/MODIGLIANI Chapter 29 INTERNATIONAL BOND MARKETS MULTIPLE CHOICE 1. In the United Kingdom, a pound-denominated bond issued by a Japanese corporation and subsequently traded in the United Kingdom’s bond market: [M] 2. […]

18 a. Individual banking. * b. Institutional banking. c. Global banking. d. None of the above. e. All of the above. [M] TEST BANK CAPITAL MARKETS: INSTITUTIONS AND INSTRUMENTS FABOZZI/MODIGLIANI Chapter 3 DEPOSITORY INSTITUTIONS MULTIPLE CHOICE 1. Depository institutions include: […]

167 a. The issue must be long-term. * b. The issue must have at least 15 years to maturity from the date of delivery if not callable. c. The issue must be short-term. d. The issue cannot be callable. e. […]

173 * a. Caput. b. Cacall. c. Swaption. d. Caption. e. None of the above. [M] TEST BANK CAPITAL MARKETS: INSTITUTIONS AND INSTRUMENTS FABOZZI/MODIGLIANI Chapter 31 MARKET FOR INTEREST RATE RISK TRANSFER VEHICLES: OTC INSTRUMENTS MULTIPLE CHOICE 1. Commercial banks […]

179 a. Volatility. b. Currency fluctuation. * c. Currency risk. d. Price risk. e. None of the above. [E] TEST BANK CAPITAL MARKETS: INSTITUTIONS AND INSTRUMENTS FABOZZI/MODIGLIANI Chapter 33 THE MARKET FOR FOREIGN EXCHANGE AND RISK CONTROL INSTRUMENTS MULTIPLE CHOICE […]

24 * a. Life insurance. b. Health insurance. c. Property and casualty insurance. d. Liability insurance. e. Disability insurance. [E] TEST BANK CAPITAL MARKETS: INSTITUTIONS AND INSTRUMENTS FABOZZI/MODIGLIANI Chapter 4 INSURANCE COMPANIES MULTIPLE CHOICE 1. Which of the following terms […]

24 a. Money market funds. b. Global stock and bond funds. c. Broadly diversified stock funds. d. Stock funds devoted to particular sectors. * e. All of the above. [M] TEST BANK CAPITAL MARKETS: INSTITUTIONS AND INSTRUMENTS FABOZZI/MODIGLIANI Chapter 5 […]

30 * a. Underwriting. b. Firm commitment. c. Best-efforts underwriting. d. Underwriting syndicate. e. None of the above. [M] TEST BANK CAPITAL MARKETS: INSTITUTIONS AND INSTRUMENTS FABOZZI/MODIGLIANI Chapter 6 INVESTMENT BANKING FIRMS MULTIPLE CHOICE 1. Investment banking firms are highly […]

36 a. Red warning. * b. Red herring. c. Initial prospectus. d. Interim offering. e. None of the above. [M] TEST BANK CAPITAL MARKETS: INSTITUTIONS AND INSTRUMENTS FABOZZI/MODIGLIANI Chapter 7 PRIMARY AND SECONDARY MARKETS MULTIPLE CHOICE 1. Financial markets dealing […]

48 a. An arithmetic average rate of return. b. A time-weighted rate of return. c. A dollar-weighted rate of return. * d. All of the above. e. None of the above. [M] TEST BANK CAPITAL MARKETS: INSTITUTIONS AND INSTRUMENTS FABOZZI/MODIGLIANI […]

54 a. A combination of a various risky assets. * b. A combination of a riskfree asset and the market portfolio. c. A combination of riskless assets. d. A combination common stock and corporate bonds. e. None of the above. […]

Describe the mechanics of trading futures options. With a debit card, a. A bill is sent to the debit cardholder periodically requesting payment for transactions that have been made in the past. b. Funds are immediately withdrawn from the purchaser’s […]

The yields on CDs are a function of: a. The credit rating of the issuing bank. b. The maturity of the CD. c. The supply and demand for CDs. d. The back-up line of credit. e. a, b, and c […]

The term “hedge fund” was first used to describe: a. The private investment fund of Alfred Winslow Jones. b. The Quantum Group of Funds managed by George Soros. c. The offshore investment corporation of the United Kingdom’s Financial Services Authority. […]

Mortgage insurance to provide a guarantee for the fulfillment of the borrower’s obligations is provided by the: a. Federal Housing Administration. b. Veterans Administration. c. Rural Housing Service insurance. d. PMI insurance. e. a, b, and c only. The highest […]

Mortgage originators may generate income from mortgage activity in the form of: a. Origination fees. b. Secondary market profits. c. Servicing fees. d. a and b only. e. All of the above. The different types of pension plans include: a. […]

In a completely integrated capital market: a. There are no restrictions to prevent investors from investing in securities issued in any capital market throughout the world. b. The required return on securities of comparable risk will be the same in […]

A major difference between options and futures is that: a. Options provide a symmetric risk/reward relationship. b. Futures provide a symmetric risk/reward relationship. c. Options provide an asymmetric risk/reward relationship. d. Futures provide an asymmetric risk/reward relationship. e. b and […]

The multifactor CAPM is attractive because: a. It is simple to use. b. It recognized nonmarket risks. c. It is easier to implement. d. All of the above. e. None of the above. The provision in a bond indenture that […]

Which of the below statements is FALSE? A) For residential mortgage loans, “value” is either market value or appraised value. B) For income-producing properties, the value of the property is based on the fundamental principles of valuation: the value of […]

Common stock represents: a. Ownership interest in a corporation. b. A liability. c. Program trading. d. Arbitrage. e. None of the above. A FLEX option is a contract whereby the terms of the contract can be customized with respect to: […]

A transaction in which an investor borrows to buy additional securities using the securities themselves as collateral is called: a. Leveraged buyout. b. Buying on margin. c. Short selling. d. All of the above. e. None of the above. In […]

In a cap or floor, the only party that is required to perform is the: a. Buyer. b. Seller. c. Asset/liability manager. d. Depository institution. e. None of the above. Historical return distributions for a portfolio of a large number […]

Compare and contrast Treasury bills, commercial paper, and certificates of deposits. Which of the following statements is most correct? a. Municipalities are not permitted to tax the interest income from securities issued by the U.S. Treasury. b. Municipal bonds are […]

Municipal bonds are traded in the: a. Over-the-counter market. b. Private market. c. Third market. d. Dutch auction market. e. None of the above. As a general rule, bonds are callable at: a. Maturity only. b. A premium above par. […]

One of the three major differences in the structures of a CMBS transaction and a nonagency RMBS transaction include: ________. A) Residential mortgages impose prepayment penalties or restrictions on prepayments. B) The role of the buyers when the structure is […]

The Nikkei 225 Stock Average and the TOPIX are the indexes for the stocks of established and large companies traded on the: a. Frankfurt Stock Exchange. b. London Stock Exchange. c. Tokyo Stock Exchange. d. Toronto Stock Exchange. e. Paris […]

If actual reserves exceed required reserves, the difference is referred to as: a. Spread income. b. Secondary reserves. c. Excess reserves. d. Total reserves. e. None of the above. Warrants differ from exchange-traded call options in that: a. Warrants have […]

Currency options traded in the over-the-counter market are: a. Standardized options. b. Customized options. c. Liquid options. d. Common options. e. None of the above. The price of a debt instrument must equal the sum of the: a. Present value […]

An appealing feature of the APT model is that: a. It makes fewer assumptions about investor behavior and the market structure. b. Is simple to use. c. Is easier to implement. d. Is more accurate in estimating the expected rate […]

The capital asset pricing model states that the expected return of a security is equal to the riskfree rate of return plus: a. Beta. b. A risk premium. c. The market risk premium. d. The market price of risk. e. […]

If an investor has a six-month investment horizon, buying a 5-year, 10-year, or 20-year bond will produce the same six-month return. This interpretation of the pure expectations theory is referred to as the: a. Return-to-maturity expectation. b. Local expectations. c. […]

The two measures that have been found to be key indicators of the potential credit performance of a commercial mortgage loan are the debt-to-service coverage ratio and the loan-to-value ratio. CMBS are backed by either newly originated or seasoned commercial […]

The management fee structure for hedge funds is: a. A flat fee per investor or investor group. b. A fixed fee based on the market value of assets managed. c. A performance-based incentive fee. d. b and c only. e. […]