A. Futures markets allow investors to manage risk.
B. Futures markets can be used to hedge against changing commodity prices.
c. Interest rate futures can be used to hedge against the risk of rising interest rates.
d. All of the statements above are true.
2. All of the following are recognized as an important influences in the development of the banking crisis of 2008 and the resulting credit crisis EXCEPT:
A. Consumers, especially homeowners, took on too much debt.
b. Too many subprime loans were repackaged and sold as securities.
c. The IMF bailed out Freddie Mac and Fannie Mae.
d. Real estate prices collapsed.
3. Which of the following was not a major supplier of funds to credit markets in 2008?
A. households.
b. Government sponsored agencies
c. Mutual funds and ETFs
d. All of the above were major suppliers of funds.
6. Which of the following is not a key role of an investment banker?
A. Market maker
b. Underwriter
c. Acting as transfer agent
d. Agent in private placement
7. The investment banker's function involves all of the following except
A. take a portion of the risk in the distribution of an issue
b. always insure a company a given amount of equity can be sold so that long-range financial planning can be made accurately
c. make a market by buying and selling a security to insure a liquid market
d. contract to buy securities from the corporation and resell them to other security dealers and the public
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