QUESTION 42
Corporate securities are ranked from highest to lowest risk as follows:
common stock; preferred stock; bonds |
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preferred stock; common stock; bonds |
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bonds; preferred stock; common stock |
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common stock; bonds; preferred stock |
2 points
QUESTION 43
_____ are loans made to borrowers who do not qualify for loans at the usual market rate because of a poor credit rating or because the loan is larger than justified by their income.
Fannie Mae Loans |
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Securitized mortgages |
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Mortgage-backed loans |
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Subprime loans |
2 points
QUESTION 44
____ means that investors can convert their investments into cash quickly and at a low cost.
Diversification |
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Denominational intermediation |
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Liquidity intermediation |
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Cost advantages |
2 points
QUESTION 45
Companies that borrow funds from people who have saved and make loans to others are ____.
the FED |
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financial intermediaries |
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foreign exchange companies |
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central banks |
2 points
QUESTION 46
____ is the uncertainty about the returns investors will earn on an investment account.
Moral hazzard |
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Wealth |
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Risk |
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Diversification |
Answer 42:
common stock; preferred stock; bonds
Common stock carries high risk, preferred stock medium risk and
bonds carry low risk
Answer 43:
Subprime loans
Answer 44:
Liquidity intermediation
Answer 45:
financial intermediaries
Answer 46
Risk
QUESTION 42 Corporate securities are ranked from highest to lowest risk as follows: common stock; preferred...
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