Question 1

The originate-to-distribute business model has a serious ________ problem since the mortgage broker has little incentive to make sure that the mortgagee is a good credit risk.

Accepted Answer

A)  principal-agent
B)  debt deflation
C)  democratization of credit
D)  collateralized debt

Question 2

Firms that are designated as systemically important financial institutions (SIFIs) are subject to all of the following additional Federal Reserve regulations EXCEPT

Accepted Answer

A)  higher capital standards.
B)  stricter liquidity requirements.
C)  providing a plan for orderly liquidation if necessary.
D)  interest rate ceilings on time deposits.

Question 3

As "haircuts" increased during 2007-2009,financial institutions found that to borrow the same loan amount now required ________ collateral.

Accepted Answer

A)  less
B)  no
C)  more
D)  default-free

Question 4

In a bank panic,the source of contagion is the

Accepted Answer

A)  free-rider problem.
B)  too-big-to-fail problem.
C)  transactions cost problem.
D)  asymmetric information problem.

Exam 12: Financial Crises

Firms that are designated as systemically important financial institutions (SIFIs) are subject to all of the following additional Federal Reserve regulations EXCEPT

Correct Answer
verified

As "haircuts" increased during 2007-2009,financial institutions found that to borrow the same loan amount now required ________ collateral.

Correct Answer
verified

The originate-to-distribute business model has a serious ________ problem since the mortgage broker has little incentive to make sure that the mortgagee is a good credit risk.

Correct Answer
verified

In a bank panic,the source of contagion is the

Correct Answer
verified

Exam 12: Financial Crises

Firms that are designated as systemically important financial institutions (SIFIs) are subject to all of the following additional Federal Reserve regulations EXCEPT

Correct AnswerverifiedShow Answer

As "haircuts" increased during 2007-2009,financial institutions found that to borrow the same loan amount now required ________ collateral.

Correct AnswerverifiedShow Answer

The originate-to-distribute business model has a serious ________ problem since the mortgage broker has little incentive to make sure that the mortgagee is a good credit risk.

Correct AnswerverifiedShow Answer

In a bank panic,the source of contagion is the

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified