Question
Which of the following is a risk factor managed by depository financial institutions? [I] Regulatory risk [II] Liquidity risk [III] Default risk [IV] Interest rate
Which of the following is a risk factor managed by depository financial institutions? [I] Regulatory risk [II] Liquidity risk [III] Default risk [IV] Interest rate risk
Question options: (OPTION 5 IS WRONG)
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Which of the following cases is an example of credit risk? [I] Seller of credit default swap defaults when buyer files a claim [II] Buyer of credit default swap defaults when seller files a claim. [III] Buyer of a junk bond (high yield bond) resells the bond in the secondary market at fair value. [IV] Likelihood that a firm defaults on a loan originally rated A+ [V] Lending money to a borrower under a condition in which the loan is categorized as sub-prime. [VI] Likelihood that a municipal bond goes into default. [VII] A bond issue by the Treasury Department during a financial crisis.
Question options: (OPTION 1 IS WRONG)
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