WorksheetsFinancial Institutions Final Exam Review - Fall 2025
Total questions: 15
Worksheet time: 20mins
A firm with a low Z-score has a high level of...
credit risk.
systemic risk.
interest rate risk.
liquidity risk.
An open-end mutual fund owns 1,500 shares of Krispy Kreme priced at $12. The fund also owns 1,000 shares of Ben & Jerry's priced at $43, and 2,000 shares of Pepsi priced at $50. The fund itself has 3,500 of its own shares outstanding. What is the NAV of a fund's share?
$56
$46
$36
$66
$26
An investment bank agrees to a firm commitment offering of two million shares of Panera stock. The offer price is set at $55. If the stock is actually sold to the public at $53.80, what is the investment banker's gain or loss?
$2,400,000 gain
$1,600,000 gain
$2,400,000 loss
$1,600,000 loss
As we know, at the start of 2008, there were 5 bulge-bracket Investment Banks... by the end of 2008, there were ZERO! Which ones failed?
Lehman Brothers
Goldman Sachs
Morgan Stanley
Bear Stearns
Merrill Lynch
Which one of the following situations creates the most liquidity risk?
Long-term assets funded by long-term liabilities
Short-term assets funded by long-term liabilities
Long-term assets funded by short-term liabilities
Short-term assets funded by short-term liabilities
Hedge fund managers make their money through “2 and 20” arrangements.
The 2% refers to the (a) .
Hedge fund managers make their money through “2 and 20” arrangements.
The 20% refers to the (a) .
A financial intermediary has two assets in its investment portfolio. It has 35 percent of its security portfolio invested in one-month Treasury bills and 65 percent in real estate loans. If it liquidated the bills today, the bank would receive $98 per hundred of face value. If the real estate loans were sold today, they would be worth $85 per $100 of face value. In one month, the real estate loans could be liquidated at $94 per $100 of face value. Calculate the intermediary's one-month liquidity index.
(a)
Which one of the following five C's of credit is not correctly defined?
Capital—The borrower's equity.
Conditions—Assessing how economic conditions could affect the borrower's ability to repay the loan.
Capacity—Whether the borrower has a big enough wallet to fit all the money
Character—A measure of the borrower's intention/willingness to repay the loan.
Collateral—An asset of the borrower that the lender may seize in the event of default on the loan.
Which of the following is an acceptable definition of duration?
Weighted average time to maturity
How much a bond price will change when yields change
The first derivative of bond price with respect yield
All of the above
For large interest rate declines, duration ___________ the increases in the bond's price, and for large interest rate increases, it ____________ the decline in the bond's price.
overpredicts; underpredicts
underpredicts; overpredicts
overpredicts; overpredicts
underpredicts; underpredicts
None of the options are correct.
Suppose that ExxonMobile has EBITDA of $10mm, Long-Term Debt of $45mm, Short-Term Debt of $30mm, Interest Expense of $1.8mm, and Total Assets of $225mm. What should its credit rating be?
AAA
AA
A
BBB
BB
A bond trader who buys and sells into and out of her own inventory is an example of a
agent
broker
dealer
banker
Security dealers who will buy or sell securities at any time in the market, and therefore must always post a BID and ASK quote at all times, are called...
underwriters.
dealers.
brokers.
market makers.
advisers.
Which of the following global regulations is for minimum capital requirements?
Dodd-Frank
Gramm–Leach–Bliley
Glass–Steagall
Basel
