金融市场与机构.docx

金融市场与机构.docx

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金融市场与机构

1Chapter12

TheMortgageMarkets

1?

 MultipleChoiceQuestions

1.Whichofthefollowingareimportantwaysinwhichmortgagemarketsdifferfromthestockandbondmarkets?

（a）Theusualborrowersinthecapitalmarketsaregovernmententitiesandbusinesses,whereastheusualborrowersinthemortgagemarketsareindividuals.

（b）Mostmortgagesaresecuredbyrealestate,whereasthemajorityofcapitalmarketborrowingisunsecured.

（c）Becausemortgagesaremadefordifferentamountsanddifferentmaturities,developingasecondarymarkethasbeenmoredifficult.

（d）Alloftheaboveareimportantdifferences.

（e）Only（a）and（b）oftheaboveareimportantdifferences.

Answer:

D

2.Whichofthefollowingareimportantwaysinwhichmortgagemarketsdifferfromstockandbondmarkets?

（a）Theusualborrowersincapitalmarketsaregovernmententities,whereastheusualborrowersinmortgagemarketsaresmallbusinesses.

（b）Theusualborrowersincapitalmarketsaregovernmententitiesandlargebusinesses,whereastheusualborrowersinmortgagemarketsaresmallbusinesses.

（c）Theusualborrowersincapitalmarketsaregovernmententitiesandlargebusinesses,whereastheusualborrowersinmortgagemarketsaresmallbusinessesandindividuals.

（d）Theusualborrowersincapitalmarketsarebusinessesandgovernmententities,whereastheusualborrowersinmortgagemarketsareindividuals.

Answer:

D

3.Whichofthefollowingaretrueofmortgages?

（a）Amortgageisalong-termloansecuredbyrealestate.

（b）Aborrowerpaysoffamortgageinacombinationofprincipalandinterestpaymentsthatresultinfullpaymentofthedebtbymaturity.

（c）Over80percentofmortgageloansfinanceresidentialhomepurchases.

（d）Alloftheabovearetrueofmortgages.

（e）Only（a）and（b）oftheabovearetrueofmortgages.

Answer:

D

4.Whichofthefollowingaretrueofmortgages?

（a）Amortgageisalong-termloansecuredbyrealestate.

（b）Borrowerspayoffmortgagesovertimeinsomecombinationofprincipalandinterestpaymentsthatresultinfullpaymentofthedebtbymaturity.

（c）Lessthan65percentofmortgageloansfinanceresidentialhomepurchases.

（d）Alloftheabovearetrueofmortgages.

（e）Only（a）and（b）oftheabovearetrueofmortgages.

Answer:

E

5.Whichofthefollowingaretrueofmortgages?

（a）Priortothe1920s,.bankinglegislationdiscouragedmortgagelendingbybanks.

（b）Inthe1920s,mostmortgageswereballoonloans,whichrequiredtheborrowertopaytheentireloanamountafterthreetofiveyears.

（c）Becausemortgagesarelong-termloanssecuredbyrealestate,mortgagelenderstendedtofailwhenlandpricesdeclined,aswasoftenthecaseduringeconomicrecessions.

（d）Alloftheabovearetrue.

（e）Only（a）and（b）oftheabovearetrue.

Answer:

D

6.Whichofthefollowingistrueofmortgageinterestrates?

（a）Interestratesonmortgageloansaredeterminedbythreefactors:

currentlong-termmarketrates,thetermofthemortgage,andthenumberofdiscountpointspaid.

（b）MortgageinterestratestendtotrackalongwithTreasurybondrates.

（c）Theinterestrateon15-yearmortgagesislowerthantherateon30-yearmortgages,allelse

thesame.

（d）Alloftheabovearetrue.

（e）Only（a）and（b）oftheabovearetrue.

Answer:

D

7.Whichofthefollowingaretrueofmortgages?

（a）Morethan80percentofmortgageloansfinanceresidentialhomepurchases.

（b）TheNationalBankingActof1863rewardedbanksthatincreasedmortgagelending.

（c）Mostmortgagesduringthe1920sand1930swereballoonloans.

（d）Alloftheabovearetrue.

（e）Only（a）and（c）oftheabovearetrue.

Answer:

E

8.Whichofthefollowingistrueofmortgageinterestrates?

（a）Longer-termmortgageshavelowerinterestratesthanshorter-termmortgages.

（b）MortgageratesarelowerthanTreasurybondrates,becauseofthetax-deductibilityofmortgageinterestrates.

（c）Inexchangeforpoints,lendersreduceinterestratesonmortgageloans.

（d）Alloftheabovearetrue.

（e）Only（a）and（b）oftheabovearetrue.

Answer:

C

9.Typically,discountpointsshouldnotbepaidiftheborrowerwillpayofftheloanin_________yearsorless.

（a）5

（b）10

（c）15

（d）20

Answer:

A

10.Whichofthefollowingistrueofmortgageinterestrates?

（a）Longer-termmortgageshavehigherinterestratesthanshorter-termmortgages.

（b）Inexchangeforpoints,lendersreduceinterestratesonmortgageloans.

（c）MortgageratesarelowerthanTreasurybondratesbecauseofthetaxdeductibilityofmortgageinterestpayments.

（d）Alloftheabovearetrue.

（e）Only（a）and（b）oftheabovearetrue.

Answer:

E

11.Whichofthefollowingreducesmoralhazardforthemortgageborrower?

（a）Collateral

（b）Downpayments

（c）Privatemortgageinsurance

（d）Borrowerqualifications

Answer:

B

12.Whichofthefollowingprotectsthemortgagelender’srighttosellpropertyiftheunderlyingloandefaults?

（a）Alien

（b）Adownpayment

（c）Privatemortgageinsurance

（d）Borrowerqualification

（e）Amortization

Answer:

A

13.Whichofthefollowingistrueofmortgageinterestrates?

（a）MortgageratesarecloselytiedtoTreasurybondrates,butmortgageratestendtostaybelowTreasuryratesbecausemortgagesaresecuredwithcollateral.

（b）Longer-termmortgageshavehigherinterestratesthanshorter-termmortgages.

（c）Interestratesarehigheronmortgageloansonwhichlenderschargepoints.

（d）Alloftheabovearetrue.

（e）Only（a）and（b）oftheabovearetrue.

Answer:

B

14.Duringtheearlyyearsofanamortizingmortgageloan,thelenderapplies

（a）mostofthemonthlypaymenttotheoutstandingprincipalbalance.

（b）allofthemonthlypaymenttotheoutstandingprincipalbalance.

（c）mostofthemonthlypaymenttointerestontheloan.

（d）allofthemonthlypaymenttointerestontheloan.

（e）themonthlypaymentequallytointerestontheloanandtheoutstandingprincipalbalance.

Answer:

C

15.Duringthelastyearsofanamortizingmortgageloan,thelenderapplies

（a）mostofthemonthlypaymenttotheoutstandingprincipalbalance.

（b）allofthemonthlypaymenttotheoutstandingprincipalbalance.

（c）mostofthemonthlypaymenttointerestontheloan.

（d）allofthemonthlypaymenttointerestontheloan.

（e）themonthlypaymentequallytointerestontheloanandtheoutstandingprincipalbalance.

Answer:

A

16.Duringthelastyearsofaballoonmortgageloan,thelenderapplies

（a）mostofthemonthlypaymenttotheoutstandingprincipalbalance.

（b）allofthemonthlypaymenttotheoutstandingprincipalbalance.

（c）mostofthemonthlypaymenttointerestontheloan.

（d）allofthemonthlypaymenttointerestontheloan.

（e）themonthlypaymentequallytointerestontheloanandtheoutstandingprincipalbalance.

Answer:

D

17.Duringtheearlyyearsofaballoonmortgageloan,thelenderapplies

（a）mostofthemonthlypaymenttotheoutstandingprincipalbalance.

（b）allofthemonthlypaymenttotheoutstandingprincipalbalance.

（c）mostofthemonthlypaymenttointerestontheloan.

（d）allofthemonthlypaymenttointerestontheloan.

（e）themonthlypaymentequallytointerestontheloanandtheoutstandingprincipalbalance.

Answer:

D

18.AborrowerwhoqualifiesforanFHAorVAloanenjoystheadvantagethat

（a）themortgagepaymentismuchlower.

（b）onlyaveryloworzerodownpaymentisrequired.

（c）thecostofprivatemortgageinsuranceislower.

（d）thegovernmentholdsthelienontheproperty.

Answer:

B

19.（I）Conventionalmortgagesareoriginatedbyprivatelendinginstitutions,andFHAorVAloansareoriginatedbythegovernment.（II）Conventionalmortgagesareinsuredbyprivatecompanies,andFHAorVAloansareinsuredbythegovernment.

（a）（I）istrue,（II）isfalse.

（b）（I）isfalse,（II）istrue.

（c）Botharetrue.

（d）Botharefalse.

Answer:

B

20.Borrowerstendtoprefer_________to_________,whereaslendersprefer_________

（a）fixed-rateloans;ARMs;fixed-rateloans.

（b）ARMs;fixed-rateloans;fixed-rateloans.

（c）fixed-rateloans;ARMs;ARMs.

（d）ARMs;fixed-rateloans;ARMs.

Answer:

C

21.（I）ARMsofferlowerinitialratesandtheratemayfallduringthelifeoftheloan.（II）Conventionalmortgagesdonotallowaborrowertotakeadvantageoffallinginterestrates.

（a）（I）istrue,（II）isfalse.

（b）（I）isfalse,（II）istrue.

（c）Botharetrue.

（d）Botharefalse.

Answer:

A

22.Growing-equitymortgages（GEMs）

（a）helptheborrowerpayofftheloaninashortertime.

（b）havesuchlowpaymentsinthefirstfewyearsthattheprincipalbalanceincreases.

（c）offerborrowerspaymentsthatareinitiallylowerthanthepaymentsonaconventionalmortgage.

（d）doalloftheabove.

（e）doonly（a）and（b）oftheabove.

Answer:

A

23.Aborrowerwitha30-yearloancancreateaGEMby

（a）simplyincreasingthemonthlypaymentsbeyondwhatisrequiredanddesignatingthattheexcessbeappliedentirelytotheprincipal.

（b）convertinghisARMintoaconventionalmortgage.

（c）convertinghisconventionalmortgageintoanARM.

（d）convertinghisconventionalmortgageintoaGPM.

Answer:

A

24.Whichofthefollowingareusefulforhomebuyerswhoexpecttheirincometoriseinthefuture?

（a）GPMs

（b）RAMs

（c）GEMs

（d）（a）and（b）

（e）（a）and（c）

Answer:

E

25.Whichofthefollowingareusefulforhomebuyerswhoexpecttheirincometofallinthefuture?

（a）GPMs

（b）RAMs

（c）GEMs

（d）（a）and（b）

（e）（a）and（c）

Answer:

B

26.Retiredpeoplecanliveontheequitytheyhaveintheirhomesbyusinga

（a）GEM.

（b）GPM.

（c）SAM.

（d）RAM.

Answer:

D

27.Secondmortgagesservethefollowingpurposes:

（a）theygiveborrowersawaytousetheequitytheyhaveinthei