Which of the following is correct?

Financial Crisis Quiz

Quiz
•
Business
•
2nd Grade
•
Medium
Ishanka Dias
Used 1+ times
FREE Resource
10 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Funding liquidity risk is typically measured via bid-ask spreads.
An asset's liquidity risk is related to how quickly and cheaply one can sell the asset.
Both of the above are correct.
None of the above is correct.
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following is correct?
Banks do maturity transformation by investing funds raised through share issues into long term assets.
Banks do maturity transformation by investing funds raised through securitizations into deposits.
Banks make money by setting interest rates on deposits that are a bit higher than interest on the mortgage loans.
None of the above is correct.
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following is correct?
Short memory bias may result from the application of statistical models that give less weight to.
Hyperbolic discounting is caused by small bonuses.
Bonuses drive executive behaviour and can create perverse incentives leading everyone to try and make money now, forgetting about the future implications of the risk they are taking today.
All of the above
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
During the subprime crisis, banks in trouble managed to survive mainly through:
New share issues
Higher inflow of deposits
Substantial asset sales at good prices
Government Support
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following is incorrect?
Credit risk includes default risk and recovery risk
Counterparty risk includes default risk and recovery risk
Securities are either subject to credit risk or market risk
Market risk includes currency risk and commodity risk
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following is correct?
JP Morgan took over Bear Sterns in 2008
Northern Rock was the largest default in US history
Lehman Brothers was instrumental in saving other banks during the subprime crisis
Goldman Sachs became an investment bank to be able to access the government’s safety net
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
During the subprime crisis:
Mortgage defaults caused banks to restrict lending. Less lending reduced the risk in the system and as a result also sovereign risk went down.
Sovereign risk is not directly linked to retail and corporate default risk
Both of the above
None of the above
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