商业银行管理彼得S罗斯英文原书第8版 英语试题库Chap009.docx

商业银行管理彼得S罗斯英文原书第8版 英语试题库Chap009.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Chap009

Chapter9

RiskManagement:

Asset-BackedSecurities,LoanSales,CreditStandbys,andCreditDerivatives

FillintheBlankQuestions

1.Whenabanksetsasideagroupofincome-earningassetsandthensellssecuritiesbaseduponthoseassetsitis________________________thoseassets.

Answer:

securitizing

2.Oftenwhenloansaresecuritizedtheyarepassedontoa_________________________whopoolstheloansandsellssecurities.

Answer:

specialpurposeentity

3.A（n）_________________________allowsahomeownertoborrowagainsttheresidualvalueoftheirresidence.

Answer:

homeequityloan

4._________________________allowthebanktogeneratefeeincomeaftertheyhavesoldaloan.Thebankcontinuestocollectinterestandprincipalfromtheborrowersandpassesthesecollectionstotheloanbuyers.

Answer:

Servicingrights

5.Ina_________________________anoutsiderpurchasespartofaloanfromthesellingfinancialinstitution.Generallythepurchaserhasnoinfluenceoverthetermsoftheloancontract.

Answer:

participationloan

6.A（n）_________________________isacontingentclaimofthebankthatissuesit.Theissuingbank,inreturnforafee,guaranteestherepaymentofaloanreceivedbyitscustomerorthefulfillmentofacontractmadebyitscustomertoathirdparty.

Answer:

standbycreditagreement

7.A（n）_________________________occurswhentwobanksagreetoexchangeaportionoralloftheloanrepaymentsoftheircustomers.

Answer:

creditswap

8.A（n）__________________guardsagainstthelossesinthevalueofacreditasset.Itwouldpayoffiftheassetdeclinessignificantlyinvalueorifitcompletelyturnsbad.

Answer:

creditoption.

9.A（n）_________________________combinesanormaldebtinstrumentwithacreditoption.Itallowstheissuerofthedebtinstrumenttoloweritsloanrepaymentsifsomesignificantfactorchanges.

Answer:

creditlinkednote

10.The_________________________ofastandbyletterofcreditisabankorotherinvestorwhoisconcernedaboutthesafetyoffundscommittedtotherecipientofthestandbyletterofcredit.

Answer:

beneficiary

11.A（n）_________________________guaranteestheswappartiesaspecificrateofreturnontheircreditasset.BankAmayagreetopaythetotalreturnontheloantoBankBplusanyappreciationinthemarketvalueoftheloan.InreturnBankAwilloftengetLIBORplusafixedspreadplusanydepreciationinthevalueoftheloan.

Answer:

totalreturnswap

12.The________________________isthepartythatisrequestingastandbyletterofcredit.

Answer:

accountparty

13.The__________________isthebankorfinancialinstitutionwhichguaranteesthepaymentoftheloaninastandbyletterofcredit.

Answer:

issuer

14.A（n）_________________________isaloansalewhereownershipoftheloanistransferredtothebuyeroftheloan,whothenhasadirectclaimagainsttheborrower.

Answer:

assignment

15.Anothertypeofloansaleisa（n）_________________________whichisashortdatedpieceofalongermaturityloan,entitlingthepurchasertoafractionoftheexpectedloanincome.

Answer:

loanstrip

16.ArelativelynewtypeofcreditderivativeisaCDOwhichstandsfor__________________.

Answer:

collateralizeddebtobligation

17.Insurancecompaniesareaprime__________ofcreditderivatives.

Answer:

seller

18.A（n）isanover-the-counteragreementofferingprotectionagainstlosswhendefaultoccursonaloanorotherdebtinstrument.

Answer:

creditderivative

19.A（n）isrelatedtothecreditoptionandisusuallyaimedatlendersabletohandlecomparativelylimiteddeclinesinvaluebutwantsinsuranceagainstseriouslosses.

Answer:

creditdefaultswap

20.Therehasbeenanexplosionininrecentyears.Theseinstrumentsrestonpoolsofcreditderivativesthatmainlyinsureagainstdefaultsoncorporatebonds.Thecreatorsoftheseinstrumentsdonothavetobuyandpoolactualbondsbutcancreatetheseinstrumentsandgeneraterevenuesfromsellingandtradinginthem.

Answer:

syntheticCDOs（Collateralizeddebtobligations）

21.Aratesthesecuritiestobesoldfromapoolofsecuritizedloanssothatinvestorshaveabetterideaofwhatthenewsecuritiesarelikelytobeworth.

Answer:

creditratingagency

22.A（n）isanassurancethatinvestorswillberepaidintheeventofthedefaultoftheunderlyingloansinasecuritization.Thesecanbeinternalorexternaltothesecuritizationprocessandlowertheriskofthesecurities.

Answer:

creditenhancement

23.WhentheFHLMCcreatesCMOstheyoftenusedifferentwhicheachpromiseadifferentcouponrateandwhichhavedifferentmaturityandriskcharacteristics.

24.Lenderscansetasideagroupofloansontheirbalancesheet,issuebondsandpledgetheloansascollateralagainstthebondsin.Theseusuallystayonthebank’sbalancesheetasliabilities.

25.FNMA（FannieMae）andFHLMC（FreddieMac）areexamplesof.Theyappeartohavetheunofficialbackingofthefederalgovernmentintheeventofdefault.

Answer:

governmentsponsoredenterprises（GSEs）

True/FalseQuestions

TF26.Securitizationisdesignedtoturnilliquidloansintoliquidassetsintheformofsecuritiessoldintheopenmarket.

Answer:

True

TF27.Securitizationhastheaddedadvantageofgeneratingfeeincomeforbanks.

Answer:

True

TF28.Securitizedassetscannotberemovedfromabank'sbalancesheetuntiltheymature.

Answer:

False

TF29.Securitizationraisesthelevelofcompetitionforthebest-qualityloansamongbanks.

Answer:

True

TF30.Servicingrightsonloanssoldconsistofthecollectionofinterestandprincipalpaymentsfromborrowersandmonitoringborrowercompliancewithloanterms.

Answer:

True

TF31.Aloansoldbyabanktoanotherinvestorwithrecoursemeansthebankhasgiventheinvestoracalloptionontheloan.

Answer:

False

TF32.Anaccountpartywillseekabank'sstandbycreditguaranteeifthebank'sfeeforissuingtheguaranteeislessthanthevalueassignedtheguaranteebyitsbeneficiary.

Answer:

True

TF33.Securitizationtendstolengthenthematurityofabank'sassets.

Answer:

False

TF34.SecuritizedassetsasasourceofbankfundsaresubjecttoreserverequirementssetbytheFederalReserveBoard.

Answer:

False

TF35.Securitizationsofcommercialloansusuallycarrythesameregulatorycapitalrequirementsforabankastheoriginalloansthemselves.

Answer:

True

TF36.Mostloansthatbankssellofftheirbalancesheetshaveminimumdenominationsofatleastamilliondollars.

Answer:

True

TF37.Mostloansthatbankssellofftheirbalancesheetscarryinterestratesthatusuallyareconnectedtolong-terminterestrates（suchasthe30-yearTreasurybondrate）.

Answer:

False

TF38.Inaparticipationloanthepurchaserisanoutsidertotheloancontractbetweenthefinancialinstitutionsellingtheloanandtheborrower.

Answer:

True

TF39.Thebuyerofaloanparticipationmustwatchboththeborrowerandthesellerbankclosely.

Answer:

True

TF40.Underanassignmentownershipofaloanistransferredtothebuyer,thoughthebuyerstillholdsonlyanindirectclaimagainsttheborrower.

Answer:

False

TF41.Loansalesaregenerallyviewedasrisk-reducingforthesellingfinancialinstitution.

Answer:

True

TF42.InaCMO,thedifferenttiers（ortranches）ofsecuritypurchasersfacethesameprepaymentrisk.

Answer:

False

TF43.Astandbyletterofcreditsubstantiallyreducestheissuingbank'sinterestrateriskandliquidityrisk.

Answer:

False

TF44.Securitizationofloanscaneasilybeappliedtobusinessloanssincetheseloanstendtohavesimilarcashflowschedulesandcomparableriskstructures.

Answer:

False

TF45.Theadvantageofacreditswapisthatitallowseachbankintheswaptobroadenitsmarketareaandspreadoutitscreditriskonitsloans.

Answer:

True

TF46.Bankuseofcreditderivativesisdominatedbythelargestbanks.

Answer:

True

TF47.Thecreditderivativesmarkethasgrownnine-foldduringtherecentyears.

Answer:

True

TF48.Banksaretheprincipalsellersofcreditderivatives.

Answer:

False

TF49.Banksareoneoftheprincipalbuyersofcreditderivatives.

Answer:

True

TF50.Insurancecompaniesareoneoftheprincipalsellersofcreditderivatives.

Answer:

True

MultipleChoiceQuestions

51.Securitizedassetscarryauniqueformofriskcalled:

A）Defaultrisk

B）Inflationrisk

C）Interest-raterisk

D）Prepaymentrisk

E）Noneoftheabove

Answer:

D

52.Short-datedpiecesofalonger-termloan,usuallymaturinginafewdaysorweeks,arecalled:

A）Loanparticipations

B）Servicingrights

C）Loanstrips

D）Sharedcredits

E）Noneoftheabove

Answer:

C

53.Thepartyforwhomastandbycreditletterisissuedbyabankisknownasthe:

A）Accountparty

B）Beneficiary

C）Representative

D）CreditGuarantor

E）Noneoftheabove

Answer:

A

54.Whenabankissuesastandbycreditguaranteeonbehalfofoneofitscustomers,thepartyreceivingtheguaranteeisknownasthe:

A）Accountparty

B）Beneficiary

C）Obligator

D）Servicingagent

E）Noneoftheabove

Answer:

B

55.Securitizationhaditsorigininthesellingofsecuritiesbackedby_____________

A）Creditcardreceivables

B）Residentialmortgageloans

C）Computerleases

D）Automobileloans

E）Truckleases

Answer:

B

56.Loan-backedsecurities,which