31.

The basic goal in managing the rate spread between the return on assets and the cost of liabilities is

Select one:

a. Both A and C above

b. to maintain a negative spread.

c. to maintain a positive spread.

d. to maintain profitability.

32.

The trend towards an increase in defined-contribution pension plans can be explained by the following except

Select one:

a. None of the above

b. the introduction of 401k plans.

c. the decline in the number of large, unionized manufacturing companies where defined-benefit plans were popular.

d. the increase in the costs and regulatory burden.

33.

Credit reporting agencies play an important role in assessing the default risk of a borrower by

Select one:

a. gathering public and private information about the borrowers.

b. providing credit reports containing credit history information.

c. All of the above

d. generate credit scores to help predict the probability of default.

34.

In underwriting an issue, an investment bank

Select one:

a. forms a syndicate that markets the issue at an agreed-upon price to the public.

b. buys the whole issuance at an agreed-upon price and then market the issue to the public.

c. None of the above

d. helps the corporation in determining the price of the issue and sells them to the public on behalf of the issuer.

35.

____ are a type mutual fund that pool the funds form small investors and use them to invest in securities and real property.

Select one:

a. Hedge funds

b. Aggressive growth mutual funds

c. Funds of funds

d. Real estate investment trusts

36.

Small and large time deposits, savings, and checkable deposits will be found in the ____ of a typical bank.

Select one:

a. asset category in the balance sheet

b. capital category of the balance sheet

c. liability category in the balance sheet

d. income statement

37.

____ is a publicly traded company that uses the proceeds to purchase student loans to increase the flow of student loan funds and add liquidity to the market.

Select one:

a. Freddie Mac

b. Ginnie Mae

c. Fannie Mae

d. Sallie Mae

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Please answer ALL correctly!

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