FI 412 Exam 2 Questions AND Correct Answers
Adjustable-Rate Mortgages - ✔✔mortgages whose
interest rates are allowed to fluctuate with general
interest-rate movements
ADR - ✔✔a receipt for shares of a foreign company that
a U.S. bank purchased and placed in its vault
Agency Bonds - ✔✔bonds that are not issued by the
Treasury but are issued to raise funds in the national
interest
Amortization - ✔✔the inclusion of both principal and
interest in the monthly payment
Anchor Currency - ✔✔the currency to which another
currency is pegged in a fixed rate regime
Appreciation - ✔✔when a currency increases in value
, Balance of Payments - ✔✔a bookkeeping system for
recording all payments that has a direct bearing on the
movement of funds between a country and foreign
countries
Balloon Loans - ✔✔when the entire principal payment
is due at one time at the end of the loan period
Banker's Acceptance - ✔✔an order to pay a specified
sum to the bearer at a future date
Bretton Woods - ✔✔the international monetary system
in use from 1945-1971 in which exchange rates were
fixed and the USD was freely convertible into gold
Collateralized Mortgage Obligations - ✔✔a pass-
through security having different maturity groups for
payment of principal
Commercial Paper - ✔✔maturity is always less than 270
days to avoid bid rate registration with the SEC
Adjustable-Rate Mortgages - ✔✔mortgages whose
interest rates are allowed to fluctuate with general
interest-rate movements
ADR - ✔✔a receipt for shares of a foreign company that
a U.S. bank purchased and placed in its vault
Agency Bonds - ✔✔bonds that are not issued by the
Treasury but are issued to raise funds in the national
interest
Amortization - ✔✔the inclusion of both principal and
interest in the monthly payment
Anchor Currency - ✔✔the currency to which another
currency is pegged in a fixed rate regime
Appreciation - ✔✔when a currency increases in value
, Balance of Payments - ✔✔a bookkeeping system for
recording all payments that has a direct bearing on the
movement of funds between a country and foreign
countries
Balloon Loans - ✔✔when the entire principal payment
is due at one time at the end of the loan period
Banker's Acceptance - ✔✔an order to pay a specified
sum to the bearer at a future date
Bretton Woods - ✔✔the international monetary system
in use from 1945-1971 in which exchange rates were
fixed and the USD was freely convertible into gold
Collateralized Mortgage Obligations - ✔✔a pass-
through security having different maturity groups for
payment of principal
Commercial Paper - ✔✔maturity is always less than 270
days to avoid bid rate registration with the SEC
