1. Which of the following is NOT true of pension funds? a) ERISA established minimum standards for vesting. b) The Pension Protection Act of 2006 required companies to calculate the present value of pension benefits with discount rates based on the Treasury yield curve. c) The PBGC insures benefits up to a limit in cases where a defined benefit plan terminates without sufficient funds to meet its obligations. d) In the U.S. today, more assets are held by defined contribution plans than by defined benefit plans.

2. In what famous case did the US Supreme Court find that insurance was not commerce, thus opening the door for state level regulation?

3. Which of the following is NOT true of securities and brokerage firms and securities markets? a) SIPC protects brokerage accounts up to a limit in the event of the failure of a broker-dealer. b) Glass-Steagall required that commercial banks cease engaging in certain securities and brokerage activities, such as securities underwriting. c) Since 1934, the Federal Reserve has been the primary regulator of securities and brokerage firms. d) The SEC regulates insider trading and market manipulation in the securities markets. e) None of the above.

4. In late 2007, Citigroup and other large commercial banks decided to rescue the structured investment vehicles (SIVs) and ABCP Conduits to which they had sold large amounts of structured credit, even though, in most cases, they had no technical legal obligation to do so. Briefly explain why.

5. True or False. Guaranty funds are federal insurance schemes that protect the policyholders of failed insurance companies.

6. The Investment Company Act of 1940 requires the following of mutual funds except: a) Registration b) Disclosures c) Limitations on leverage d) Limitations on the percentage of assets allocated to equities

7. Hedge funds require investors to meet minimum net worth and liquid net worth standards, as well as a minimum investment. Briefly identify the main benefit they obtain by imposing such restrictions.

8. True or false. The creation of the California Earthquake Authority was associated with a significant increase in earthquake insurance coverage of California homes.

9. Which of the following is not typically associated with the short-term (up to five years) aftermath of a financial crisis? a) Significant drop in output b) Significant increase in unemployment c) Significant increase in inflation d) Significant increase in government debt

10. Which of the following is not true of the US regulatory and legislative response to the financial crisis of 2007-2008? a) With the PDCF and TSLF, the Federal Reserve created facilities to lend to investment banks. b) The Master Liquidity Enhancement Conduit was formed to alleviate problems associated with SIVs and ABCP Conduits. c) Money market fund assets were guaranteed by the US Treasury. d) Newly issued bank debt was guaranteed by the FDIC. e) None of the above