WorksheetsRisk Management MIDTERM
Total questions: 20
Worksheet time: 49mins
It is the difference between the interest
income a bank earns from its lending activities and the interest it pays to depositors.
net income interest
net interest income
Which is NOT a function of the financial market?
risk sharing
saves time and energy
mobilization of fund
It is the tendency of an investment or market to rise or fall in price within a short period of time.
(a)
A derivative instrument that suggests a contract between two traders for purchase and delivery of assets at a specific time and future date; it is also traded on stock exchange.
forward
future
swap
Market risk is inevitable.
true
false
It refers to a marketplace where buyers and sellers participate in the trade.
(a)
____ traders bid up prices on a good news day, while ____ traders drive prices down on bad news.
bullish, bullish
bearish, bullish
bullish, bearish
It is used to measure the risk of loss on a portfolio of financial assets, or an investment, over a specific period.
(a)
It is the meeting point of buyers and sellers of bonds.
equity market
debt market
financial market
Type of financial market for buying and selling for immediate delivery or
cash exchange.
commodity market
spot market
money market
Give 2 factors that affect the interest rate of a borrower.
loan amount, downpayment
loan term, collateral
downpayment, interest
Mr. Santos borrowed 1,000,000 with a 10% annual interest rate. Compute for the simple interest rate.
(a)
In credit risk, what do you mean
by collateral?
assurance
deal
bond
What are the 3 components of VaR?
(a)
Is VaR always accurate?
(a)
What do you observed from the stock prices whenever there is a crisis?
(a)
It is one of the two markets for trading financial instruments that is organized and highly regulated.
(a)
How do we avoid market risk?
(1 sentence only)
How does a bank manage credit risk?
(1-2 sentences only)
How does Var helps in calculating
credit risk?
(1-2 sentences only)
