30.
The Sarbanes-Oxley Act
31.
Asset allocation refers to
32.
Security selection refers to
33.
Which of the following portfolio construction methods starts with security analysis?
34.
Which of the following portfolio construction methods starts with asset allocation?
35.
_______ are examples of financial intermediaries.
36.
Financial intermediaries exist because small investors cannot efficiently
37.
________ specialize in helping companies raise capital by selling securities.
38.
Commercial banks differ from other businesses in that both their assets and their
liabilities are mostly
39.
In 2012, ____________ was(were) the most significant financial asset(s) of U.S.
commercial banks in terms of total value.
40.
In 2012, ____________ was(were) the most significant liability(ies) of U.S. commercial
banks in terms of total value.
41.
In 2012, ____________ was(were) the most significant real asset(s) of U.S. nonfinancial
businesses in terms of total value.
42.
In 2012, ____________ was(were) the least significant real asset(s) of U.S. nonfinancial
businesses in terms of total value.
43.
In 2012, ____________ was(were) the least significant liability(ies) of U.S. nonfinancial
businesses in terms of total value.
44.
In terms of total value, the most significant liability(ies) of U.S. nonfinancial businesses
in 2012 was(were)
45.
In 2012, ____________ was(were) the least significant financial asset(s) of U.S.
nonfinancial businesses in terms of total value.
46.
New issues of securities are sold in the ________ market(s).
47.
Investors trade previously issued securities in the ________ market(s).
48.
Investment bankers perform which of the following role(s)?
49.
Until 1999, the ________ Act(s) prohibited banks in the United States from both
accepting deposits and underwriting securities.
50.
The spread between the LIBOR and the Treasury-bill rate is called the
51.
Mortgage-backed securities were created when ________ began buying mortgage loans
from originators and bundling them into large pools that could be traded like any other
financial asset.
52.
The sale of a mortgage portfolio by setting up mortgage pass-through securities is an
example of
53.
Which of the following is true about mortgage-backed securities?
I) They aggregate individual home mortgages into homogeneous pools.
II) The purchaser receives monthly interest and principal payments received from
payments made on the pool.
III) The banks that originated the mortgages maintain ownership of them.
IV) The banks that originated the mortgages continue to service them.
54.
________ were designed to concentrate the credit risk of a bundle of loans on one class
of investor, leaving the other investors in the pool relatively protected from that risk.
55.
________ are in essence an insurance contract against the default of one or more
borrowers.
Short Answer Questions
56.
Discuss the agency problem in detail.
57.
Discuss the similarities and differences between real and financial assets.
58.
Discuss securitization as it relates to the field of investments.