For a tax-exempt municipal security, the higher the marginal tax rate, the less valuable the tax-exemption feature will be.

a. true b. false

If a property & casualty company has a 40% tax rate, all other things equal, what would it prefer to invest in?

a. a taxable bond at 5.60% b. a Treasury bond at 4.50% c. a municipal bond at 3.90% d. none of the above

A mortgage loan that meets an agencys credit standards is referred to as a:

a. conforming mortgage b. nonconforming mortgage c. conventional mortgage d. nonconventional mortgage e. none of the above

FNMA and FHLMC create liquidity in the secondary market by:

a. issuing conventional mortgage loans b. purchasing conventional mortgage loans c. issuing FHA- and VA-insured mortgage loans d. providing mortgage insurance e. none of the above

(ANSWER ALL)