Letters of credit (L/Cs)

a. Address informational asymmetries in international trade

b. Protect the interests of sellers

c. Protect the interests of buyers

d. All of the above

Issuers of securitized assets add to the appeal to investors by

a. Overcollateralizing the pool

b. Having private insurers insure the underlying assets in the pool

c. Having credit rating agencies assign a credit rating to the pool

d. All of the above

The financial crisis

a. Set back Ginnie Mae securities

b. Set back Fannie Mae and Ginnie Mae securities

c. Set back private-label MBS

d. Gave the securitization process a much-needed boost

How many separate zero-coupon securities can be created from a 7-year Treasury note through the STRIPs process?

a. 1

b. 7

c. 15

d. Nonethe STRIPs process involves something entirely different

CMOs typically use mortgage-backed securities to

		a. Create separate securities having different maturities
		b. Blend with junk bonds to reduce risk through diversification
		c. Reduce the volatility of cash flows
		d. Satisfy regulatory requirements