Which of the following is not a benefit of a savings account?
a.Account holders must give 30 to 60 days’ notice for withdrawals.
b.Account holders are provided with printed receipts to document their account
transactions.
c.Account holders are provided with printed receipts to document their account
transactions.
d.No fees are assessed as long as a low minimum balance is maintained.
A T-bond with a $1,000 par is quoted at a bid of 105:7 and an ask of 105:9. If you sell
the bond, you will receive
A.$1,052.81.
B.$1,052.19.
C.$1,057.22.
D.$1,059.22.
E.none of the options.
A bond that you held to maturity had a realized return of 8 percent, but when you
bought it, it had an expected return of 6 percent. If no default occurred, which one of
the following must be true?
A.The bond was purchased at a premium to par.
B.The coupon rate was 8 percent.
C.The required return was greater than 6 percent.
D.The coupons were reinvested at a higher rate than expected.
E.The bond must have been a zero coupon bond.
The largest single category of loans on the typical bank’s balance sheet in 2013 was
A.U.S. government securities.
B.commercial and industrial loans.
C.consumer loans.
D.real estate loans.
E.interbank loans.
An umbrella-liability policy for liability losses can be affordable ways to follow the
large-loss principle when buying insurance.
a.True
b.False
Which tax is assessed by certain state governments against beneficiaries who receive
inherited property?
a.Estate tax
b.Inheritance tax
c.Excise tax
d.Flat tax
My bank has a larger number of adjustable-rate mortgage loans outstanding. To protect
our interest rate income on these loans, the bank could
I. enter into a swap to pay fixed and receive variable.
II. enter into a swap to pay variable and receive fixed.
III. buy an interest rate floor.
IV. buy an interest rate cap.
A.I and III only
B.I and IV only
C.II and III only
D.II and IV only
Deflation involves falling prices.
a.True
b.False
Which one of the following types of mortgages is likely to become more popular as the
average age of the U.S. population increases?
A.GEM
B.GPM
C.SAM
D.PLA
E.RAM
In a Treasury auction, preferential bidding status is granted to
A.competitive bidders.
B.noncompetitive bidders.
C.short sale committed bidders.
D.commercial bank bidders.
E.no group of bidders.
The official name of the 2010 health insurance reform law is Obamacare.
a.True
b.False
Convexity arises because
A.bonds pay interest semiannually.
B.coupon changes are the opposite sign of interest rate changes.
C.duration is an increasing function of maturity.
D.present values are a nonlinear function of interest rates.
E.duration increases at higher interest rates.
You have taken a stock option position and, if the stock’s price drops, you will get a
level gain no matter how far prices fall, but you could go bankrupt if the stock’s price
rises. You have________________________________.
A.bought a call option.
B.bought a put option.
C.written a call option.
D.written a put option.
E.written a straddle.