Question

1. Investors trade previously issued securities in the ________ market(s).
A) derivatives B) primary and secondary
C) secondary D) primary

2. Investment bankers perform which of the following roles?
A) Design securities with desirable properties
B) Market new stock and bond issues for firms
C) Provide advice to the firms as to market conditions, price, etc.
D) All of the options
E) None of the options

3. Until 1999, the ________ Act(s) prohibited banks in the United States from both
accepting deposits and underwriting securities.
A) SEC
B) Glass-Steagall
C) Sarbanes-Oxley
D) Sarbanes-Oxley and SEC
E) None of the options

4. The spread between the LIBOR and the Treasury-bill rate is called the
A) LIBOR spread. B) TED spread.
C) term spread. D) T-bill spread.

5. Which of the following is true about mortgage-backed securities?
I) They aggregate individual home mortgages into homogeneous pools.
II) The purchaser receives monthly interest and principal payments received from
payments made on the pool.
III) The banks that originated the mortgages maintain ownership of them.
IV) The banks that originated the mortgages continue to service them.
A) I, III, and IV
B) I, II, and IV
C) II and IV
D) II, III, and IV
E) I, II, III, and IV

Answer 1

1.Investors trade previously issued securities in the secondary markets.

2.Investment bankers perform all of the following roles i.e Design securities with desirable properties,Market new stock and bond issues for firms and Provide advice to the firms as to market conditions, price, etc..

3.  Until 1999, the Glass-Steagall Act prohibited banks in the United States from both
accepting deposits and underwriting securities.

4. The spread between the LIBOR and the Treasury-bill rate is called the TED spread.

5.The statements are the purchaser receives monthly interest and principal payments received from
payments made on the pool and The banks that originated the mortgages continue to service them are TRUE. Ans: Option:C