商业银行管理彼得S罗斯英文原书第8版 英语试题库Chap010.docx

商业银行管理彼得S罗斯英文原书第8版 英语试题库Chap010.docx

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商业银行管理彼得S罗斯英文原书第8版英语试题库Chap010

Chapter10

TheInvestmentFunctioninBankingandFinancial-ServicesManagement

FillintheBlankQuestions

1.A（n）_________________________isasecurityissuedbythefederalgovernmentwhichhaslessthanoneyeartomaturitywhenitisissued.

Answer:

Treasurybill

2.Debtinstrumentsissuedbycities,statesandotherpoliticalentitiesandwhichareexemptfromfederaltaxesarecollectivelyknownas_________________________.

Answer:

municipalsecurities

3.Theinvestmentmaturitystrategywhichcallsforthebanktohaveonehalfofitsinvestmentportfolioinveryshorttermassetsandonehalfofitsinvestmentportfolioinlongtermassetsisknownasthe_________________________.

Answer:

barbellstrategy

4.A（n）_________________________isasecuritywheretheinterestportionofthesecurityissoldseparatelyfromtheprincipalportionofthesecurity.

Answer:

strippedsecurity

5._________________________arethewaythefederal,stateandlocalgovernmentsguaranteethesafetyoftheirdepositswithbanks.

Answer:

Pledgingrequirements

6.Themostaggressiveinvestmentmaturitystrategycallsforthebanktocontinuallyshiftthematuritiesofitssecuritiesinresponsestochangesininterestratesandiscalledthe__________________.

Answer:

rateexpectationstrategy

7._________________________istheriskthatthebankwillhavetosellpartofitsinvestmentportfoliobeforetheirmaturityforacapitalloss.

Answer:

Liquidityrisk

8._________________________istheriskthattheeconomyofthemarketareatheyservicemaytakeadownturninthefuture.

Answer:

Businessrisk

9.__________________istheriskthatthecompanywhosebondsthefinancialinstitutionownsmayretiretheentireissueofcorporatebondsinadvanceoftheirmaturityleavingthebankwiththeriskofearningslossesresultingfromreinvestingthecashatlowerinterestrates.

Answer:

Callrisk

10.Asecurityissuedbythefederalgovernmentwith1to10yearstomaturitywhenitisissuediscalleda（n）_________________________.

Answer:

Treasurynote

11.Ashorttermdebtsecurityissuedbymajorcorporationsisknownas__________________.

Answer:

commercialpaper

12.Theinvestmentmaturitystrategywhichcallsforthebanktohavealloftheirinvestmentassetsinveryshorttermmaturitiesiscalledthe_________________________.

Answer:

front-end-loadedpolicy

13.Amoneymarketsecuritywhichrepresentsabank'scommitmenttopayastipulatedamountofmoneyonaspecificfuturedateunderspecificconditionsandwhichisoftenusedininternationaltradeisknownasa（n）_________________________.

Answer:

bankers'acceptance

14.A（n）_________________________isaninterest-bearingreceiptforthedepositoffundsinabankforastipulatedtimeperiod.Onesthatareorientedtowardsbusinesscustomersorinstitutionsareknownasjumbos.

Answer:

certificateofdeposit

15._________________________areanysecuritieswhichreachmaturityinunderoneyear.

Answer:

Moneymarketsecurities

16._________________________areanysecuritieswhoseoriginalmaturityexceedsoneyear.

Answer:

Capitalmarketsecurities

17.SecuritiessoldbyFannieMae,FreddieMacandothersareknownas_________________________.

Answer:

federalagencysecurities

18.Claimsagainsttheexpectedincomeandprincipalgeneratedbyapoolofsimilar-typeloansareknownas_________________________.

Answer:

securitizedassets

19.Thelongtermdebtobligationsofmajorcorporationsareknownas________________________.

Answer:

corporatebonds

20.Theinvestmentmaturitystrategywhichcallsforthebanktohavealloftheirinvestmentassetsinverylongtermmaturitiesisknownasthe_________________________.

Answer:

back-end-loadedpolicy

21.FinancialInstitutionsmayinvestinmunicipalbondsissuedbysmallerlocalgovernments.Thesebondsareknownas____________bonds.

Answer:

bankqualified

22.Marketablenotesandbondssoldbyagenciesownedbythegovernmentorsponsoredbythegovernmentareknownas.

Answer:

governmentagencysecurities

23.Asecurityissuedbythefederalgovernmentwithgreaterthan10yearstomaturitywhenitisissuediscalleda（n）.

Answer:

TreasuryBond

24.aretimedepositsoffixedmaturityissuedbytheworld’slargesbanksheadquarteredinfinancialcentersaroundtheglobe.TheheartofthismarketiscenteredinLondon.

Answer:

Eurocurrencydeposits

25.areatypeofmunicipalbondthatarebackedbythefullfaithandcreditoftheissuinggovernment.

Answer:

Generalobligationbonds

26.areatypeofmunicipalbondthatarepaidonlyfromcertainstipulatedsourceoffunds.

Answer:

Revenuebonds

27.arecloselyrelatedtoCMOsandpartitionthecashflowfromapoolofmortgageloansormortgagebackedsecuritiesintomultiplematurityclassesinordertoreducethecash-flowuncertaintyofinvestors.

Answer:

RealEstateMortgageInvestmentConduits（REMICs）

28.istheriskthatloanswillbeterminatedorpaidoffaheadofschedule.Thisisaparticularproblemwithresidentialhomemortgagesandotherconsumerloansthatarepooledandusedascollateralinsecuritizedassets.

Answer:

Prepaymentrisk

29.Alendinginstitutionthatsellslower-yieldingsecuritiesatalossinordertoreducecurrenttaxableincomewhilesimultaneouslypurchasinghigher-yieldingnewsecuritiesinordertoboostfuturereturnsisdoinga（n）.

Answer:

taxswap

30.A（n）isapictureofhowmarketinterestratesdifferacrossloanssecuritiesofvaryingtimestomaturity.

Answer:

yieldcurve

True/FalseQuestions

TF31.Investmentsinsecuritiesprovidediversificationforabank'sassetsbecausemostloanscomefromthelocalareasservedbyabank'soffices.

Answer:

True

TF32.Bankincomefromloansisfullytaxable.

Answer:

True

TF33.Investmentsecuritiesareexpectedto"dressup"abank'sbalancesheet,accordingtothetextbook.

Answer:

True

TF34.Investmentsecuritiesareexpectedtohelpstabilizeafinancialinstitutions'sincome.

Answer:

True

TF35.Ashort-termIOUofferedbymajorcorporationsthatisofshortmaturity（mostoftheselOUsmaturein90daysorless）isknownasaCMO.

Answer:

False

TF36.Prepaymentriskonsecuritizedassetsgenerallyincreaseswheninterestratesrise.

Answer:

False

TF37.Strippingasecurityeliminatesprepaymentrisk.

Answer:

False

TF38.AccordingtothetextbookthedominantsecurityheldinU.S.bankinvestmentportfoliosisstateandlocalgovernmentbonds.

Answer:

False

TF39.Interestincomeandcapitalgainsfromabank'sportfolioofinvestmentsecuritiesistaxedintheUnitedStatesasordinaryincome.

Answer:

True

TF40.Eurocurrencydepositsthatsomebankspurchaseasinvestmentsgenerallycarryhighermarketyieldsthandomestictimedepositsissuedbycomparable-sizeU.S.banks.

Answer:

True

TF41.Bankers'acceptancesareconsideredtobeamongthesafestofallmoneymarketinstruments.

Answer:

True

TF42.AneligibleacceptanceisonethatcanbeusedascollateralforborrowingfromaFederalReservebank.

Answer:

True

TF43.Whenabankirrevocablyguaranteesacommercialpaperissue,thebank'screditratingsubstitutesfortheborrower'screditrating.

Answer:

True

TF44.Theprincipalriskbanksfacefrominvestinginstructurednotesiscredit（default）risk.

Answer:

False

TF45.TheprincipalrisktoafinancialinstitutionbuyingCMOsismarketrisk.

Answer:

False

TF46.Strippedmortgage-backedsecuritiesfullyprotectinvestorsfromhavingtoreinvesttheirincomeatlowerandlowerinterestrates.

Answer:

False

TF47.Strippedmortgage-backedsecuritiesmakematuritymatchingofbankassetsandliabilitieseasiertoaccomplishthandomostotherinvestmentsecuritiesthatbanksbuy.

Answer:

False

TF48.Lowerinterestratesincreasethepresentvalueofallprojectedcashflowsfromaloan-backedsecuritysothatitsmarketvaluecouldrise.

Answer:

True

TF49.Treasurybillsarethelongtermdebtobligationsissuedbythefederalgovernment.

Answer:

False

TF50.Commercialpaperistheshorttermdebtinstrumentissuedbymajorbanks.

Answer:

False

TF51.Treasurynotesandbondsareissuedbythefederalgovernmentandarecouponinstruments.

Answer:

True

TF52.Interestrateriskistheriskfinancialinstitutionsfaceduetochangesinmarketinterestrates.

Answer:

True

TF53.Oneinvestmentmaturitystrategypopularamongsmallerinstitutionsistheladderorspacedmaturitypolicy.Itispopularbecauseitdoesnottakemuchexpertisetoimplement.

Answer:

True

TF54.Oneinvestmentmaturitystrategy,calledthefrontendloadedpolicy,requiresthatthebankputallofitsinvestmentportfolioinlongtermsecurities.

Answer:

False

TF55.Businessriskistheriskthatthebankwillexperienceacashshortageandwillhavetosellsomeofitsinvestmentssecurities.

Answer:

False

TF56.Inflationriskisthepossibilitythatthepurchasingpowerofinterestincomeandrepaidprincipalfromasecurityorloanwillbeerodedbyrisingpricesforgoodsandservices.

Answer:

True

TF57.Callriskreferstotherightofdebtcollectorstocallintheloansinadvanceofmaturityandgetanearlyrepayment.

Answer:

False

TF58.Ifinterestratesfall,acallablebondatparhasthepotentialforlargeincreasesinprice.

Answer:

False

TF59.Theyieldtomaturityisthediscountratethatequatesasecuri