“\ufffd \ufffd \ufffd Question 1 \ufffd\u00a0\u00a0\u00a0\t \ufffd \ufffd\u00a0 ____ mortgages enabled more people with relatively lower income, or high existing debt, or a small down payment to purchase homes. \ufffd \ufffd \ufffd \ufffd\u00a0 \u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 2 \ufffd \u00a0\t \ufffd \ufffd\u00a0 ____ economic growth will probably ____ the risk premium on mortgages and ____ the price of mortgages.\u00a0\u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 3 \ufffd\u00a0\t \ufffd \ufffd\u00a0 Rates for adjustable-rate mortgages are commonly tied to the \ufffd\u00a0\u00a0\u00a0 \u00a0\t \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 4\t \ufffd \ufffd\u00a0 The interest rate on a second mortgage is ____ on a first mortgage created at the same time, because the second mortgage is ____ the existing first mortgage in priority claim against the property in the event of default. \ufffd \ufffd \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 5 \ufffd\u00a0\t \ufffd \ufffd\u00a0 Fannie Mae and Freddie Mac experienced financial problems during the credit crisis because they:\u00a0\u00a0\u00a0\u00a0\t \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 6 \ufffd\u00a0\t \ufffd \ufffd\u00a0 A financial institution has a higher degree of interest rate risk on a ____ than a ____. \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0\u00a0 \u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 7 \ufffd\u00a0\t \ufffd \ufffd\u00a0 Financial institutions that hold fixed-rate mortgages in their asset portfolios are exposed to ____ risk, because they commonly use funds obtained from short-term customer deposits to make long-term mortgage loans.\t \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 8 \ufffd\u00a0\t \ufffd \ufffd\u00a0 In a collateralized mortgage obligation (CMO), mortgages are\u00a0 segmented into ____ (or classes). \ufffd \u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 9 \ufffd \u00a0\t \ufffd \ufffd\u00a0 ____ risk is the risk that a borrower may prepay the mortgage in response to a decline in interest rates. \ufffd\u00a0\u00a0\u00a0\u00a0\t \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 10 \u00a0\u00a0\u00a0 \u00a0\t \ufffd \ufffd\u00a0 For any given interest rate, the shorter the life of the mortgage, the ____ the monthly payment and the ____ the total payments over the life of the mortgage.\t\u00a0 \ufffd\u00a0\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 11 \u00a0\u00a0\u00a0 \u00a0\t \ufffd \ufffd\u00a0 An institution that originates and holds a fixed-rate mortgage is adversely affected by ____ interest rates; the borrower who was provided the mortgage is adversely affected by ____ interest rates. \ufffd\u00a0 \u00a0\t \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 12\u00a0\u00a0\u00a0\u00a0\t \ufffd \ufffd\u00a0 Which of the following is not true with respect to a growing-equity mortgage?\t \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 13\u00a0\u00a0\u00a0\u00a0\t \ufffd \ufffd\u00a0 From the perspective of the lending financial institution, interest rate risk is \ufffd \ufffd\u00a0 \u00a0\t \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 14\u00a0\u00a0\u00a0\u00a0\t \ufffd \ufffd\u00a0 Collateralized mortgage obligations (CMOs) are generally perceived to have\t \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 15\u00a0\u00a0\u00a0\u00a0\t \ufffd \ufffd\u00a0 Which of the following will typically require homeowners to ultimately request a new mortgage? \ufffd \ufffd \ufffd \u00a0\t \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 16\u00a0\u00a0\u00a0\u00a0\t \ufffd \ufffd\u00a0 “Pink sheets” are traded on the \u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 17\u00a0\u00a0\u00a0\u00a0\t \ufffd \ufffd\u00a0 ____ are portfolios of international stocks created and managed by various financial institutions.\t \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 18\u00a0\u00a0\u00a0\u00a0\t \ufffd \ufffd\u00a0 The largest organized exchange, listing the largest firms, is the \ufffd\u00a0\u00a0 \ufffd \ufffd \u00a0\t \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 19\u00a0\u00a0\u00a0\u00a0\t \ufffd \ufffd\u00a0 A ____ requires that dividends cannot be paid on common stock until all current and previously omitted dividends are paid on preferred stock. \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd \u00a0\t \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 20\u00a0\u00a0\u00a0\u00a0\t \ufffd \ufffd\u00a0 Shareholders can most easily measure a firm’s performance by monitoring changes in its ____ over time.\t \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \u00a0 \ufffd\u00a0\u00a0\u00a0\u00a0 \u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 21 \u00a0\u00a0\u00a0 \u00a0\t \ufffd \ufffd\u00a0 Managers of firms may consider a stock repurchase or even a leveraged buyout when they believe their stock is ____ by the market, or a secondary stock offering when they believe their stock is ____ by the market.\t \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 22 \u00a0\u00a0\u00a0 \u00a0\t \ufffd \ufffd\u00a0 The prevailing price per share divided by the firm’s earnings per share is known as the\t \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 23\u00a0\u00a0\u00a0\u00a0\t \ufffd \ufffd\u00a0 The transaction costs to the issuing firm in an IPO is usually ____ percent of the funds raised.\t \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 24\u00a0\u00a0\u00a0\u00a0\t \ufffd \ufffd\u00a0 ____ sell shares to investors and use the proceeds to invest in portfolios of international stocks created and managed by portfolio managers. \ufffd\u00a0 \u00a0\t \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 25\u00a0\u00a0\u00a0\u00a0\t \ufffd \ufffd\u00a0 The ____ is a value-weighted index of stock prices of 500 large U.S. firms. \ufffd \ufffd\u00a0 \u00a0\t \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 26\u00a0\u00a0\u00a0\u00a0\t \ufffd \ufffd\u00a0 A new stock issuance by a specific firm that already has stock outstanding is referred to as a(n)\t \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \u00a0 \ufffd\u00a0\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 27\u00a0\u00a0\u00a0\u00a0\t \ufffd \ufffd\u00a0 Which of the following is not a part of the over-the-counter market? \ufffd\u00a0\u00a0\u00a0\u00a0 \u00a0\t \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 28\u00a0\u00a0\u00a0\u00a0\t \ufffd \ufffd\u00a0 ____ are acquisitions that require substantial amounts of borrowed funds.\u00a0\u00a0\u00a0 \ufffd \ufffd \u00a0\t \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \ufffd \ufffd\u00a0 \u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 29 \u00a0\u00a0\u00a0 \u00a0\t \ufffd \ufffd\u00a0 Initial public offerings (IPOs) perform ____ on the day following the IPO and ____ for periods of a year or longer after the IPO. \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd \u00a0\t“\ufffd \ufffd \ufffd \u00a0 Question 30 \u00a0\u00a0\u00a0 \u00a0\t \ufffd \ufffd\u00a0 When a firm buys some of its shares that it had previously issued, this is referred to as a:<\/p>\n","protected":false},"excerpt":{"rendered":"
“\ufffd \ufffd \ufffd Question 1 \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 ____ mortgages enabled more people with relatively lower income, or high existing debt, or a small down payment to purchase homes. \ufffd \ufffd \ufffd \ufffd\u00a0 \u00a0 “\ufffd \ufffd \ufffd \u00a0 Question 2 Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-216444","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/216444","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=216444"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/216444\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=216444"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=216444"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=216444"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}