Question

A write-down of assets by a commercial bank results in

		a. Fewer liabilities
		b. Greater net worth
		c. A loss of net worth
		d. None of the above Clearinghouses are used a. In conducting the business of ECNs b. By specialist systems in executing trades c. In the process of making payments using transaction deposits where more than one bank is involved d. In routing orders to over-the-counter markets More risk of holding bonds will a. Lower their yields b. Raise their yields c. Not affect their yields d. Increase supply In an economic expansion a. Treasury yields rise b. Below-investment-grade corporate bond yields fall c. Corporate Aaa (AAA) yields rise d. All of the above If the yield curve is positively sloped when averaged for long periods of time, this implies that a. The expectations hypothesis is the best explanation of this phenomenon b. Inflation dominates the yield curve c. The liquidity (term) premium hypothesis is the best explanation of this phenomenon d. Yield curves cannot be positively sloped over long periods of time A drop in interest rates a. Affects the prices of short-term securities more than long-term securities b. Affects the prices on short-term securities less than long-term securities c. Affects the prices of short-term securities the same as long-term securities d. Cannot affect prices of securities

Answer 1

1. A loss of net worth

2. In the process of making payments using transaction deposits where more than one bank is involved

3. Raise their yields

4. Corporate Aaa (AAA) yields fall

5. The liquidity (term) premium hypothesis is the best explanation of this phenomenon

6. Affects the prices on short-term securities less than long-term securities