2. What do you think were the main reason(s) behind the global financial credit crisis? Sub-prime mortgages High leverage ratio None of the above A,B&C The decrease of interest rates after the dot com bust 3. If investors expect interest rates to fall significantly in the future, the yield curve will be inverted. This means that the yield curve has a slope. steep upward flat downward slight upward 4. A bank panic can lead to a severe contraction in economic activity due to a decline in international trade the losses of bank shareholders. the losses of bank depositors. a decline in lending for productive investment 5. If you have a very low tolerance for risk, which of the following bonds would you be least likely to hold in your portfolio? a. Municipal bond b. Corporate bond with a rating of Baa c. U.S. Treasury bond d. Corporate bond with a rating of Aaa 6. What is financial globalization* interconnectedness of financial intermediaries around the world interconnectedness of currencies interconnectedness of financial markets around the world interconnectedness of businesses around the world 7. If debt contracts are denominated in foreign currency, then an unanticipated decline in the value of the domestic currency results in an increase in a firm's net worth. an increase in willingness to lend. a decline in a firm's net worth. a decrease in adverse selection and moral hazard
2. What do you think were the main reason(s) behind the global financial credit crisis? Sub-prime mortgages High leverage ratio None of the above A,B&C The decrease of interest rates after the dot com bust 3. If investors expect interest rates to fall significantly in the future, the yield curve will be inverted. This means that the yield curve has a slope. steep upward flat downward slight upward 4. A bank panic can lead to a severe contraction in economic activity due to a decline in international trade the losses of bank shareholders. the losses of bank depositors. a decline in lending for productive investment 5. If you have a very low tolerance for risk, which of the following bonds would you be least likely to hold in your portfolio? a. Municipal bond b. Corporate bond with a rating of Baa c. U.S. Treasury bond d. Corporate bond with a rating of Aaa 6. What is financial globalization* interconnectedness of financial intermediaries around the world interconnectedness of currencies interconnectedness of financial markets around the world interconnectedness of businesses around the world 7. If debt contracts are denominated in foreign currency, then an unanticipated decline in the value of the domestic currency results in an increase in a firm's net worth. an increase in willingness to lend. a decline in a firm's net worth. a decrease in adverse selection and moral hazard
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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2. What do you think were the main reason(s) behind the global financial credit crisis?
- Sub-prime mortgages
- High leverage ratio
- None of the above
- A,B&C
- The decrease of interest rates after the dot com bust
3. If investors expect interest rates to fall significantly in the future, the yield curve will be inverted. This means that the yield curve has a slope.
- steep upward
- flat
- downward
- slight upward
4. A bank panic can lead to a severe contraction in economic activity due to
- a decline in international trade
- the losses of bank shareholders.
- the losses of bank depositors.
- a decline in lending for productive investment
5. If you have a very low tolerance for risk, which of the following bonds would you be least likely to hold in your portfolio?
a. Municipal bond
b. Corporate bond with a rating of Baa
c. U.S. Treasury bond
d. Corporate bond with a rating of Aaa
6. What is financial globalization*
- interconnectedness of financial intermediaries around the world
- interconnectedness of currencies
- interconnectedness of financial markets around the world
- interconnectedness of businesses around the world
7. If debt contracts are denominated in foreign currency, then an unanticipated decline in the value of the domestic currency results in
- an increase in a firm's net worth.
- an increase in willingness to lend.
- a decline in a firm's net worth.
- a decrease in adverse selection and moral hazard
8. Regulations designed to provide information to the marketplace so that Property promised to the lender as compensation if the borrower defaults is called
- restrictive covenants
- deductibles collateral
- contingencies
- .................
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