If 1-year interest rates for the next five years are expected to be 4, 2, 5, 4, and 5 percent, and the 5-year term premium is 1 percent, than the 5-year bond rate will be A. 4%
If1-year interest rates for the next five years are expected to be 4,2, 5, 4, and 5 percent, and the 5-year term premium is 1 percent,than the 5-year bond rate will be
A. 4%
B. 3%
C. 2%
D. 5%
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Question2 of 111.0 Points
Inother words the risk premium on long term bonds relative to shortterm bond would be . We would be ___ accepting of theexpectations theory
A. low,less
B. low, more
C. high,more
D. zero,more
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Question3 of 113.0 Points
Stocksvs. Bonds
A.TRUE
B.FALSE
1.Stocks have 2 sources of cashflow, they include dividends and saleprice of the stock. A
2.Bonds have 3 sources of cashflow, they include coupon, yields andfinal maturity value. B
3.Stock cashflows are considered more risky because they are set uponthe first issuance. B
4.In our pricing models for stocks, if ke is large , the current pricePo would be low. A
5.In the Gordon growth model, g is assumed to be less than ke,otherwise price can be negative. A
6.The one period model for stock prices looks very similar to themultiple coupon bond pricing.B
Question4 of 111.0 Points
Usingthe Dividend Discount Model, find the P5 if dividends are $2.50 forthe next 5 years your required return is 7% and the price of thestock today P0 is $125
A. $101.42
B. $158.08
C. Not enough information
D. $125.00
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Question5 of 112.5 Points
StockBeta
A.TRUE
B.FALSE
1.BRK-A and BRK-B are less risky than the market. A
2.If you are risk taker and would like an investment that will move upwhen the market moves down, you will choose VGZ. A
3.VALE is the least risky stock. B
4.Visa is less risky than BHP. A
5.GS is less risky than JPM. B
Question6 of 111.0 Points
Marclay`sBank Capital is
A. 100M
B. -100M
C. 90M
D. greater than all assets
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Question7 of 112.0 Points
Marclay`sBank
A.TRUE
B.FALSE
1.the banks risk weighted capital ratio comply with the Basel Accord. A
2.the bank`s leverage ratio show the bank as undercapitalized? B
3.the risk weighted capital ratio is greater than the capital ratio. A
4.the higher the ratio the better the bank is capitalized. A
Question8 of 113.0 Points
BankingRegulation
A.FALSE
B.TRUE
1.Imposing bank capital requirements on banks helps limit risk taking.B
2.Eliminating or limiting the amount of deposit insurance would createmore moral hazard. A
3.Competition was a source of reasoning for risk taking leading toabandonment of Glass-Steagall. B
4.Basel 2 demands that banks hold more capital in good times and lesscapital in bad times. B
5.Dual Banking system in the US is composed of shadow banks andtraditional banks. A
6.Consumer protection is important to protect as well as the bankingindustry risks. B
Question9 of 110.75 Points
MoneyMarket Mutual Fund Assets
A.the answer is not here
B.1,967.5%
C.47.11%
1.Growth rate 1975-1980. B
2.Growth rate 1995-2000. A
3.Growth rate 2005-2008. A
Question10 of 110.5 Points
Thehighest growth rate years corresponds with
A. Savings and Loan Crisis
B. The Great Depression
C. 2008 Financial Crisis
D. European Debt Crisis
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Question11 of 111.25 Points
DanTarullo Article
A.FALSE
B.TRUE
1.He believes banks should be able to fail without hurting the bankingsystem. B
2.He thinks the bank capital requirements are the most importantbanking supervision in recent times. A
3.He stated that a run on shadow banking is similar to run ontraditional banks. A
4.He says credit should only be a concern for the largest banks andfinancial institution. A
5.He thinks community banks should follow same regulation regime aslargest banks. A
6.He believes most would like regulation to maintain durability andmoral hazard needs to be addressed for a functioning banking andcapital market system. B
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