ICBRR 무료 덤프문제 온라인 액세스

Which one of the following four statements on the seniority of corporate bonds is incorrect?

• A.Junior bonds always pay higher coupons than subordinated bonds.
• B.In bankruptcy, holders of senior bonds are paid in full before any holders of subordinated bonds receive payment.
• C.Seniority refers to the priority of a bond in bankruptcy.
• D.Senior bonds typically have lower credit spreads than junior bonds with the same maturity and payment characteristics.

James Arthur is a customer of a bank who has taken a floating rate loan from the bank. He
is concerned that the rates may rise in the future increasing his payment amount. Which of the following instruments should he buy to hedge against the rise in interest rates?

• A.Interest rate cap
• B.Index amortizing swap
• C.Interest rate floor
• D.Interest rate swap that receives fixed and pays floating

A customer asks a broker employed by AlphaBank to buy Eureka Corporation bonds for her account. While this trade was executed correctly and the bonds were bought, the trade was mistakenly accounted for as a sell order. If the price of Eureka Corporation bonds goes up, this trade would result in a significantly larger loss than if the market had remained stable. However, if the market drops, the customer will benefit from the incorrect accounting and gain from this trade. This trading scenario can serve as an example that

• A.Strategic risk in this transaction can magnify operational risk.
• B.Liquidity risk in this transaction can magnify operational risk.
• C.Credit risk in this transaction can magnify operational risk.
• D.Market risk in this transaction can magnify operational risk.

Normally, commercial banking can be viewed as a fixed income carry trade since

• A.Short-term floating-rate deposits are used to fund short-term floating rate loans.
• B.Short-term floating-rate deposits are used to fund long-term fixed rate loans.
• C.Short-term fixed-rate deposits are used to fund short-term floating rate loans.
• D.Short-term fixed rate deposits are used to fund long-term floating rate loans.

Which one of the following four statements correctly describes an American call option?

• A.An American call option gives the buyer of that call option the right to sell the underlying instrument on any date up to and including the expiry date.
• B.An American call option gives the buyer of that call option the right to sell the underlying instrument on the expiry date.
• C.An American call option gives the buyer of that call option the right to buy the underlying instrument on any date up to and including the expiry date.
• D.An American call option gives the buyer of that call option the right to buy the underlying instrument on the expiry date.