Assets is less than the book value of its liabilities

Reference no: EM13342614

Question 21
A financial institution is insolvent when the book value of its assets is less than the book value of its liabilities.
True or False?

Question 22
This statement from the 10-K filed by Bear Stearns for the Fiscal year 2007 indicates that management was aware that the firm
was exposed to a run by other banks. "An inability to raise money in the long-term or short-term debt markets,
or to engage in repurchase agreements or securities lending, could have a substantial negative effect on our liquidity."
True or False?

Question 23
According to the Financial Accounts of the United States the financial assets of security broker-dealers fell by over $1 trillion in the fourth quarter of 2008.
True or False?

Question 24
Securitization eliminates credit and interest rate from the financial system. This is one of the great benefits of securitization.
True or False?

Question 25
Repo lending is a source of short term capital for financial institutions. When this capital dried up Lehman and Bear switched to equity finance and this caused the stock market to collapse in the spring of 2009.
True or False?

Question 26
The spread between 3 month treasury securities and 3 month financial commercial paper increased from 10 basis points in June of 2003 to 400 basis points in October of 2008.
True or False?

Question 27
Between June of 2008 and December of 2008 financial commercial paper outstanding (Financial commercial paper outstanding (CP/OUTST/DTBSPCKF_N.M) declined from approximately $849 billion to approximately $700 billion.
True or False?

Question 28
Originators of subprime mortgages relied on the repo market to warehouse loans prior to their sale or securtization of the originated assets.
True or False?

Question 29
Commercial bank lending rose by $50 million in the second quarter of 2009.
True or False?

Question 30
Investors extrapolated the favorable default experience of MBS over the years from 2004-2006 into the indefinite future. This caused investors to overpay for MBS. This contributed to the bond bubble that burst in 2008.
True or False?

Reference no: EM13342614

Questions Cloud

Explain how many moles of oh- are required to balance : The following unbalanced equation represents a reaction that occurs in basic solution: MnO42- + C2O42- ? MnO2 + CO32-. How many moles of OH- are required to balance the equation using the smallest possible integers

Investment banks as source of liquidity : Repurchase agreements are used by investment banks as source of liquidity. A bank that wants to borrow funds sells assets to a lender promising to buy the assts back. The sale price is always higher than the repurchase price

Calculate the image position behind the mirror : A 3.0cm tall object is 50cm in front of a convex mirror that has a -20 cm focal length. Calculate the image position in cm behind the mirror

Explain the vaporization of n2o4 liquid become spontaneous : Given the following data (?Hf, S°, respectively) for N2O4(l) -20. kJ/mol, 209.0 J/K mol, and N2O4(g) 10. kJ/mol, 303.7 J/K mol. At what temperature (in °C) does the vaporization of N2O4 liquid become spontaneous

Assets is less than the book value of its liabilities : A financial institution is insolvent when the book value of its assets is less than the book value of its liabilities.

Explain the solubility in pure water of ba(io3)2 : What is the solubility in pure water of Ba(IO3)2 in moles per liter at 25 ?C? [Ksp (25 ?C) = 6.0 x 10-10]

The federal reserve refused to act as lender of last resort : The Federal Reserve refused to act as lender of last resort during the last crisis because Bernanke believed that bank executives had ripped off society. In addtion Bernanke feared the long term affects of moral hazard.

How long is the steel in the coil : A 156 kg coil of sheet steel is 0.80 mm thick and 50 cm wide. How long is the steel in the coil

Evaluate the cell potential of the voltaic cell : Calculate the cell potential of the following voltaic cell Zn / Zn2+ ( 1.0 x 10-8 M) // Cu2+ (1.0 x 10-6 M) / Cu a. + 1.16 V b. + 1.03 V c. + 1.14 V d. + 1.06 V e. + 1.10 V

User Account

All Pages