Strayer FIN350 - Week 6 Quiz 5

•  Question 1
 ____ mortgages enabled more people with relatively lower income, or high existing debt, or a small down payment to purchase homes.
 
•  Question 2
 ____ economic growth will probably ____ the risk premium on mortgages and ____ the price of mortgages.

•  Question 3
  Rates for adjustable-rate mortgages are commonly tied to the

•  Question 4
  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.
 
•  Question 5
  Fannie Mae and Freddie Mac experienced financial problems during the credit crisis because they:
   
•  Question 6
  A financial institution has a higher degree of interest rate risk on a ____ than a ____.
   
•  Question 7
  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.
 
•  Question 8
  In a collateralized mortgage obligation (CMO), mortgages are  segmented into ____ (or classes).
 
•  Question 9
  ____ risk is the risk that a borrower may prepay the mortgage in response to a decline in interest rates.
   
•  Question 10
  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.
   
•  Question 11
  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.
 
•  Question 12
  Which of the following is not true with respect to a growing-equity mortgage?
   
•  Question 13
  From the perspective of the lending financial institution, interest rate risk is
   
•  Question 14
  Collateralized mortgage obligations (CMOs) are generally perceived to have
 
•  Question 15
  Which of the following will typically require homeowners to ultimately request a new mortgage?
   
•  Question 16
  "Pink sheets" are traded on the
 
•  Question 17
  ____ are portfolios of international stocks created and managed by various financial institutions.
 
•  Question 18
  The largest organized exchange, listing the largest firms, is the
 
•  Question 19
  A ____ requires that dividends cannot be paid on common stock until all current and previously omitted dividends are paid on preferred stock.
 
•  Question 20
  Shareholders can most easily measure a firm's performance by monitoring changes in its ____ over time.
   
•  Question 21
  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.

•  Question 22
  The prevailing price per share divided by the firm's earnings per share is known as the
 
•  Question 23
  The transaction costs to the issuing firm in an IPO is usually ____ percent of the funds raised.
 
•  Question 24
  ____ sell shares to investors and use the proceeds to invest in portfolios of international stocks created and managed by portfolio managers.
   
•  Question 25
  The ____ is a value-weighted index of stock prices of 500 large U.S. firms.
  
•  Question 26
  A new stock issuance by a specific firm that already has stock outstanding is referred to as a(n)
 
•  Question 27  
  Which of the following is not a part of the over-the-counter market?
   
•  Question 28
  ____ are acquisitions that require substantial amounts of borrowed funds.

   
•  Question 29
  Initial public offerings (IPOs) perform ____ on the day following the IPO and ____ for periods of a year or longer after the IPO.

   
•  Question 30  
  When a firm buys some of its shares that it had previously issued, this is referred to as a: