During the financial crisis in 2008, many banks encountered liquidity issues suffering from deposit withdrawals. Asset management was often used to deal with the liquidity problem. What is the main concern of this approach?

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A) The resulting shrinkage of the balance sheet

B) The high cost of selling assets

C) The loss of flexibility as a result of dependence upon call loans

D) The tax consideration

What is a reasonable factor that may increase the safety of loans made to sovereign governments by banks?

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A) If a foreign government refuses to repay, the dispute can be easily settled in the International Court of Justice in Hague

B) Unlike corporations, a country always gives highest priority to loan repayment to foreigners

C) Inflation often makes repayment easier for foreign countries

D) A country is less likely to go out of business than a firm is

_____ investment funds are riskier than _____ funds, but are generally less risky than _____ funds.

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1. Balanced; equity; specialty
2. Mortgage; money market; bond
3. Bond; balanced; mortgage
4. Specialty; index; balanced

Hedge funds seeking to capitalize on a set of events such as share buybacks and mergers affecting a corporation are

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1. Opportunistic hedge funds
2. Market directional hedge funds
3. Corporate restructuring hedge funds
4. Convergence trading hedge funds

29. Closed-end investment funds offer the following advantages except

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1. They may be sold short
2. They provide diversification potential
3. They do not require large amounts of liquid funds
4. None of the above

30. What would a successful fund manager do in a rising market?

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1. Go long securities that will fall less than the market
2. Go short securities that will rise less than the market
3. Both (A) and (B)
4. Neither (A) nor (B)