Fin355 Week 9 Quiz

Systemic risk refers to _______.

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Under which mortgage-backed security structure are short-term and long-term securities created out of one mortgage pool?

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In disintermediated markets, mortgage originators usually

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The value of an IO strip _______ and the value of a PO strip _______ when interest rates fall.

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Using strict underwriting standards helps reduce _______.

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Which of the following types of mortgage-backed securities are likely to experience an increase in cash flows after a decrease in interest rates?

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The largest volume of mortgage-backed securities is held _______.

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Geographic concentration of a portfolio of mortgages _______

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The largest issuer(s) of mortgage-backed securities is (are) _______.

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Default protection of a mortgage portfolio _______.

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If any losses to a portfolio value are considered unacceptable, _______.

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Which of the following statements about trading on margin is true? 

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Assume that one year ago you bought stocks on margin, providing some of your own funds and borrowing the rest from your broker. Assume that today the value of the purchased stocks is the same it was one year ago. What must be true about your investment return? 

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Protective puts are relevant when a portfolio manager expects the portfolio value to _______. 

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What is a correlation?

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If stocks in a portfolio are not perfectly positively correlated, _______.

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If stock prices rise, a portfolio protected by a collar _______.

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Which of the following statements is true?

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Value at risk estimates the ______ a particular portfolio for a specified confidence level.

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When a brokerage firm demands more collateral from investors who have borrowed from it to buy stocks, it is _______.

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