FIN 370 Final Exam Questions and
Answers Graded A+
What does, in finance, "to short" an investment mean? - Correct answer--unlimited
risk and capped reward for the investor
-profiting from the loss on a stock
-buy at one price expecting for price to decrease
-once price decreases, buy stock back
profit=price-buyback price-interest
What is MBS? - Correct answer-Mortgage Backed Security
-backed by an asset (mortgage)
-pass throughs and collateralized mortgage obligations
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
, -rated by a credit agency
What is CDS? - Correct answer-Credit Default Swap
-designed to transfer the credit exposure of fixed income products between two or
more parties
-most common form of credit derivative
-lengthy terms of maturity
What are GSEs? - Correct answer-Government Sponsored Enterprise
-privately held corporations with public purposes
-reduce the cost of capital for certain sectors: students, farmers, homeowners
How to find REV? - Correct answer-REVn= NOIn+1/R-G
or
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
Answers Graded A+
What does, in finance, "to short" an investment mean? - Correct answer--unlimited
risk and capped reward for the investor
-profiting from the loss on a stock
-buy at one price expecting for price to decrease
-once price decreases, buy stock back
profit=price-buyback price-interest
What is MBS? - Correct answer-Mortgage Backed Security
-backed by an asset (mortgage)
-pass throughs and collateralized mortgage obligations
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
, -rated by a credit agency
What is CDS? - Correct answer-Credit Default Swap
-designed to transfer the credit exposure of fixed income products between two or
more parties
-most common form of credit derivative
-lengthy terms of maturity
What are GSEs? - Correct answer-Government Sponsored Enterprise
-privately held corporations with public purposes
-reduce the cost of capital for certain sectors: students, farmers, homeowners
How to find REV? - Correct answer-REVn= NOIn+1/R-G
or
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
