4- Which of the following is a concern regulators have about securitization? Multiple Choice The risk of being an underw

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4- Which of the following is a concern regulators have about
securitization?
Multiple Choice
The risk of being an underwriter for asset-backed securities
that cannot be sold
The risk that unqualified trustees will fail to protect
investors in asset-backed instruments
The risk of acting as a credit enhancer and underestimating the
need for loan-loss reserves
All of the options are concerns regulators have about
securitization
The risk that loan servicers will be unable to satisfactorily
monitor loan performance
1- When investors buy or sell a futures contract, they must
deposit a(n) _________ when they first enter into the contract.
2- In an interest-rate swap, the principal amount of the
loan, usually called the ________________________, is not
exchanged.
3- The buyer of a(n) _________________________ option
contract believes that the market price of the underlying security
will decline in the future.
4- Which of the following is a reason for standby credit
letters' growth in the recent years?
Multiple Choice
The growth of bank loans sought by companies in recent years
All of the options are correct
Regulatory embargo on traditional lenders
The rapid growth of direct financing by companies
The decreased demand for risk-reduction devices
5- Which of the following is true regarding regulatory rules for
standby credit letters issued by banks?
Multiple Choice
They must list the standby credit letter as a liability on their
balance sheet
They must provide capital reserve against issued standby letters
of credit
They must count standby credit letters as loans when assessing
how risk-exposed the institution is to a single customer
They do not have to apply the same credit standards for
approving standby credit letters as direct loans
They can apply lower capital standards to standbys than
loans