Which of the following statements is true concerning financial regulation in the U.S.? I. The U.S. has a reasonably well-regulated commercial banking sector II. Few innovative financial products are developed apart from existing regulatory oversight III. Many credit derivatives have been trading apart from adequate regulation and oversight

Select one: A. I and II only B. I and III only C. II and III only D. I, II, and III

Collateralized mortgage obligations (CMOs) are: I. Backed by pooled mortgage backed securities II. A type of collateralized debt obligation III. Given a rating according to tranche by a credit rating agency

Select one:

A. I only

B. I and II only

C. I and III only

D. II and III only

E. I, II, and III

Which of the following statements is true concerning so-called "shadow banking?" I. A significant amount of financing is being done in the "shadow banking" sector II. The regulatory structure of shadow banking has kept pace with the financial innovation of the past twenty-five years III. It is illegitimate to place any blame for the U.S. financial crisis of 2008-2009 on shadow banking, since this crisis would likely have occured anyway

Select one:

A. I only

B. II only

C. III only

D. I and III only

E. II and III only

Which of the following is true concerning mortgage securitization? I. All subprime mortgage bond tranches were pooled as collateralized debt obligations (CDOs) II. Once a CDO was created and rated, it became ineligible for further securitization III. A lower-rated tranch of securities could never be given a higher rating in a new pool of CDOs

Select one:

A. I and II only

B. I and III only

C. II and III only

D. I, II, and III

E. None of the above

Which of the following is true of American International Group (AIG)? I. AIG was the world's largest primary issuer of credif default swaps II. Many firms that had purchased credit default swaps from AIG would likely have suffered catastrophic losses had the Fed not intervened III. In all but a few cases, AIG was adequately capitalized and could cover losses from insured collateralized debt obligations

Select one:

A. I and II only

B. I and III only

C. II and III only

D. I, II, and III

E. None of the above