A bank lender is concerned about the creditworthiness of one of its major borrowers. The bank is considering using a swap to reduce its credit exposure to this customer. Which type of swap would best meet this need?

A) Interest rate swap

B) Currency swap

C) Equity linked swap

D) Credit default swap

E) DIF swap

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Nationally chartered banks receive chartering and merger approval from the

A) Federal Deposit Insurance Corporation.

B) Office of Comptroller of the Currency.

C) Federal Reserve System.

D) Office of Thrift Supervision.

E) All of these choices are correct.

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A contingent promise by a bank to pay a bill when it comes due if the bill's originator fails to pay is an example of a

A) swap agreement.

B) standby letters of credit.

C) forward contract.

D) loan commitment.

E) commitment to buy foreign exchange.

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A put option is bought. Current Stock price is $45.00, option price is $1.2, exercise price is $42.00. What is the cost/gain of the option if the stock price is $41.50 at maturity?

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A bank is earning 6 percent on its $150 million in earning assets and is paying 4.75 percent on its liabilities. The bank's interest rate spread is ________.

A) 6.00 percent

B) 4.75 percent

C) 1.25 percent

D) 10.75 percent

E) 1.26 percent