FINA 3317 MOCK final | Questions with 100% Verified Answers |
Latest Update 2026/2027
Question: the risk that an unanticipated increase in liability withdrawals may cause an FI to have to sell assets
at fire sale prices is an example of
Answer: liquidity risk
Question: a corporate bond has a coupon rate of 10 percent and a required return of 10 percent. the bonds
price is
Answer: $1,000
Question: the federal reserve system is charged with
Answer: conducting monetary policy and providing payment and other services to a variety of institutions
Question: if the fed wishes to stimulate the economy it could
1. buy US government securities
2. raise the discount rate
3. lower reserve requirements
4. conduct quantitative tightening
Answer: 1 and 3 only
Question: for the purposes for which they are used, money market securities should have which of the
following characteristics
1. low trading costs
2. little risk price
3. high rate of return
4. life greater than one year
Answer: I and II
Question: all else held constant, which bonds is likely to have the highest required rate of return
Answer: AA rated callable corporate bond without sinking fund
Question: an investor is trying to decide between a muni paying 5.75 percent or an equivalent taxable
corporate paying 8.25 percent. what is the minimum marginal tax rate the investor must have to consider
bying the municipal bond
Answer: 30%
Question: all else held constant, mortgage payments are _____ on a 15 year fixed rate mortgage than on a 30
year fixed rate mortgage, and ______ is paid on the 15 year mortgage than on the 30 year mortgage
Answer: higher; less total interest
Question: you purchased a $255,000 house and you pay 20 percent down. you obtain a fixed rate mortgage
where the annual interest rate is 5.85 percent and there are 360 monthly payments. what is the monthly
payment
Answer: $1203.48
Question: if the current interest environment is low, lenders tend to prefer a(n) _______; while borrowers tend to
prefer a(n) ________
Answer: ARM; fixed rate mortgage
, Question: if the dollar appreciates relative to the euro then:
Answer: european cars will become less expensive in the United States
Question: what is true
Answer: futures contracts require an initial margin requirement be paid
Question: an increase in which of the following would increase the price of a call option on common stock, all
else held constant
1. stock price
2. stock price volatility
3. interest rates
4. exercise price
Answer: I, II, and III
Question: in a bear market, which option positions make money
1. buying a call
2. writing a call
3. buying a put
4. writing a put
Answer: II and III
Question: the type of swap most closely linked to the subprime mortgage crisis is the ____
Answer: credit default swap
Question: bank assets tend to have _______ maturities and ______ liquidity than/ as bank liabilities
Answer: longer; lower
Question: which one of the following is the definition of the net interest margin
Answer: (interest income- interest expense) / earning assets
Question: Blue ridge bank has a PM of 12 percent, an interest income to total assets ration of 6 percent, and a
noninterest income to assets ratio of 1.50 percent. Blue ridge also has $9 in assets per dollar in equity capital.
Blue Ridges ROE is
Answer: 8.1%
Question: The AU ratio measures the banks ability to _____ and the PM ratio measures the banks ability to
________________________________
Answer: generate income from assets; control expenses
Question: investment securities plus ____ are equal to a banks earning assets
Answer: net loans and leases
Question: uniform principles, standards, and report forms for depository institutions are prescribed by the
Answer: Federal Financial Institutions Examination Council
Latest Update 2026/2027
Question: the risk that an unanticipated increase in liability withdrawals may cause an FI to have to sell assets
at fire sale prices is an example of
Answer: liquidity risk
Question: a corporate bond has a coupon rate of 10 percent and a required return of 10 percent. the bonds
price is
Answer: $1,000
Question: the federal reserve system is charged with
Answer: conducting monetary policy and providing payment and other services to a variety of institutions
Question: if the fed wishes to stimulate the economy it could
1. buy US government securities
2. raise the discount rate
3. lower reserve requirements
4. conduct quantitative tightening
Answer: 1 and 3 only
Question: for the purposes for which they are used, money market securities should have which of the
following characteristics
1. low trading costs
2. little risk price
3. high rate of return
4. life greater than one year
Answer: I and II
Question: all else held constant, which bonds is likely to have the highest required rate of return
Answer: AA rated callable corporate bond without sinking fund
Question: an investor is trying to decide between a muni paying 5.75 percent or an equivalent taxable
corporate paying 8.25 percent. what is the minimum marginal tax rate the investor must have to consider
bying the municipal bond
Answer: 30%
Question: all else held constant, mortgage payments are _____ on a 15 year fixed rate mortgage than on a 30
year fixed rate mortgage, and ______ is paid on the 15 year mortgage than on the 30 year mortgage
Answer: higher; less total interest
Question: you purchased a $255,000 house and you pay 20 percent down. you obtain a fixed rate mortgage
where the annual interest rate is 5.85 percent and there are 360 monthly payments. what is the monthly
payment
Answer: $1203.48
Question: if the current interest environment is low, lenders tend to prefer a(n) _______; while borrowers tend to
prefer a(n) ________
Answer: ARM; fixed rate mortgage
, Question: if the dollar appreciates relative to the euro then:
Answer: european cars will become less expensive in the United States
Question: what is true
Answer: futures contracts require an initial margin requirement be paid
Question: an increase in which of the following would increase the price of a call option on common stock, all
else held constant
1. stock price
2. stock price volatility
3. interest rates
4. exercise price
Answer: I, II, and III
Question: in a bear market, which option positions make money
1. buying a call
2. writing a call
3. buying a put
4. writing a put
Answer: II and III
Question: the type of swap most closely linked to the subprime mortgage crisis is the ____
Answer: credit default swap
Question: bank assets tend to have _______ maturities and ______ liquidity than/ as bank liabilities
Answer: longer; lower
Question: which one of the following is the definition of the net interest margin
Answer: (interest income- interest expense) / earning assets
Question: Blue ridge bank has a PM of 12 percent, an interest income to total assets ration of 6 percent, and a
noninterest income to assets ratio of 1.50 percent. Blue ridge also has $9 in assets per dollar in equity capital.
Blue Ridges ROE is
Answer: 8.1%
Question: The AU ratio measures the banks ability to _____ and the PM ratio measures the banks ability to
________________________________
Answer: generate income from assets; control expenses
Question: investment securities plus ____ are equal to a banks earning assets
Answer: net loans and leases
Question: uniform principles, standards, and report forms for depository institutions are prescribed by the
Answer: Federal Financial Institutions Examination Council
