AnswersAG Q4 Financial Literacy 25-26 JRushAsset-backed Securities, Loan Sales, and Derivatives

Asset-backed Securities, Loan Sales, and Derivatives — Test Answers

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3

A bank's asset quality is mainly monitored by _____.

A
Federal Reserve bank analysts
B
financial analysts hired by the bank
C
SEC portfolio analysts
D
the bank's executives
5

The Term Auction Facility can best be described as _____.

A
a loan product managed by the federal reserve
B
a government auction of certain types of securities
C
a short-term fund banks are able to borrow from
D
a temporary program to increase bank liquidity
8

The Federal Reserve is responsible for setting our monetary policy. Name two other important functions of the Fed.

Answer not available
10

Explain one important event that caused the most recent change in Basel norms, in 2010.

Answer not available
11

Explain how two federal agencies did not do their job and contributed to the housing collapse of 2007.

Answer not available
14

The federal government's TARP program was designed to buy banks' mortgage backed securities. According to the plan, this would result in _____. (Select all that apply.)

A
additional tax benefits to some companies
B
more stable economy
C
restored liquidity to the money markets
D
decrease in foreclosures
16

Explain the concept of “too big to fail” and discuss how was this myth busted? [150 minimum word count]

Answer not available
23

Match each term related to bank loans to its description in Column B.

Answer:

0:pledging an asset as a condition of extending a loan|1:a debt instrument that consists of exchanging some of a bank's loans with another bank as a way to diversify|2:the facility providing temporary loans to banks via the Federal Reserve|3:an asset that's collateralized for a federal reserve loan program that is discounted

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