商业银行管理彼得S.罗斯英文原书第8版-英语试题库Chap010.doc

商业银行管理彼得S.罗斯英文原书第8版-英语试题库Chap010.doc

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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

T F 31. Investmentsinsecuritiesprovidediversificationforabank'sassetsbecausemostloanscomefromthelocalareasservedbyabank'soffices.

Answer:

True

T F 32. Bankincomefromloansisfullytaxable.

Answer:

True

T F 33. Investmentsecuritiesareexpectedto"dressup"abank'sbalancesheet,accordingtothetextbook.

Answer:

True

T F 34. Investmentsecuritiesareexpectedtohelpstabilizeafinancialinstitutions'sincome.

Answer:

True

T F 35. Ashort-termIOUofferedbymajorcorporationsthatisofshortmaturity（mostoftheselOUsmaturein90daysorless）isknownasaCMO.

Answer:

False

T F 36. Prepaymentriskonsecuritizedassetsgenerallyincreaseswheninterestratesrise.

Answer:

False

T F 37. Strippingasecurityeliminatesprepaymentrisk.

Answer:

False

T F 38. AccordingtothetextbookthedominantsecurityheldinU.S.bankinvestmentportfoliosisstateandlocalgovernmentbonds.

Answer:

False

T F 39. Interestincomeandcapitalgainsfromabank'sportfolioofinvestmentsecuritiesistaxedintheUnitedStatesasordinaryincome.

Answer:

True

T F 40. Eurocurrencydepositsthatsomebankspurchaseasinvestmentsgenerallycarryhighermarketyieldsthandomestictimedepositsissuedbycomparable-sizeU.S.banks.

Answer:

True

T F 41. Bankers'acceptancesareconsideredtobeamongthesafestofallmoneymarketinstruments.

Answer:

True

T F 42. AneligibleacceptanceisonethatcanbeusedascollateralforborrowingfromaFederalReservebank.

Answer:

True

T F 43. Whenabankirrevocablyguaranteesacommercialpaperissue,thebank'screditratingsubstitutesfortheborrower'screditrating.

Answer:

True

T F 44. Theprincipalriskbanksfacefrominvestinginstructurednotesiscredit（default）risk.

Answer:

False

T F 45. TheprincipalrisktoafinancialinstitutionbuyingCMOsismarketrisk.

Answer:

False

T F 46. Strippedmortgage-backedsecuritiesfullyprotectinvestorsfromhavingtoreinvesttheirincomeatlowerandlowerinterestrates.

Answer:

False

T F 47. Strippedmortgage-backedsecuritiesmakematuritymatchingofbankassetsandliabilitieseasiertoaccomplishthandomostotherinvestmentsecuritiesthatbanksbuy.

Answer:

False

T F 48. Lowerinterestratesincreasethepresentvalueofallprojectedcashflowsfromaloan-backedsecuritysothatitsmarketvaluecouldrise.

Answer:

True

T F 49. Treasurybillsarethelongtermdebtobligationsissuedbythefederalgovernment.

Answer:

False

T F 50. Commercialpaperistheshorttermdebtinstrumentissuedbymajorbanks.

Answer:

False

T F 51. Treasurynotesandbondsareissuedbythefederalgovernmentandarecouponinstruments.

Answer:

True

T F 52. Interestrateriskistheriskfinancialinstitutionsfaceduetochangesinmarketinterestrates.

Answer:

True

T F 53. Oneinvestmentmaturitystrategypopularamongsmallerinstitutionsistheladderorspacedmaturitypolicy.Itispopularbecauseitdoesnottakemuchexpertisetoimplement.

Answer:

True

T F 54. Oneinvestmentmaturitystrategy,calledthefrontendloadedpolicy,requiresthatthebankputallofitsinvestmentportfolioinlongtermsecurities.

Answer:

False

T F 55. Businessriskistheriskthatthebankwillexperienceacashshortageandwillhavetosellsomeofitsin