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SEC PHASE 2 > CH7. Other FI > Flashcards

CH7. Other FI Flashcards

1
Q

The minimum features as specified by BSP Circular No. 304, Series of 2001 specify that LTNCD:
I. can be denominated in Philippine Pesos or Dollars
II. should have a minimum maturity of five (5) years,
III. should be scripless in form and registered with a third
party Registry Bank maintaining an Electronic Registry
Book.
IV. should be registered in the name of the individual or
corporate investor, negotiable and prenumbered
(a) I, II, and IV
(b) IV, III and I
(c) II, III and IV
(d) II,IVandI
(e) I, II, III and IV

A

(c) II, III and IV

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2
Q

Long Term Negotiable CDs are issued by:
(a) Corporations
(b) Banks
(c) Insurance Companies
(d) Credit Card Companies
(e) All of the above

A

(b) Banks

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3
Q

Which or the following statements about LTNCDs are true?
I. Covered by Philippine Deposit Insurance Corporation
II. The coupon payment is subject to withholding tax
regardless of holder
III. Cannot be pre-terminated
IV. Issued with a minimum tenor of five (5) years
(a) IandII
(b) II and III
(c) I,IIandIV
(d) I, III and IV
(e) None of the above

A

(d) I, III and IV

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4
Q

Which of the following is not a benefit when investing in Bank issued Lower Tier 2?
(a) the yield is high
(b) the issue is liquid because there is a secondary market
(c) it has a definite term of at least 5 years with interest fixed/guaranteed
(d) it is not insured with the Philippine Deposit Insurance Corp
(e) None of the above

A

(d) it is not insured with the Philippine Deposit Insurance Corp

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5
Q

Which of the following is currently not allowed by the BSP as an investment outlet for UITF?
(a) Bank Loans
(b) Treasury Bills
(c) Bank Deposits
(d) Marketable Securities
(e) None of the above

A

(a) Bank Loans

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6
Q

Which of the following describes Hybrid Tier 1 (HT1) capital?
I. Fixed coupon payments but subject to suspension
II. Shareholders meeting required to redeem
III. Perpetual with option to redeem on or after 10 years
IV. Has a dilutive effect on shareholders
(a) I,IIandIV
(b) I, II and III
(c) I, III, and IV
(d) I, and III
(e) I, II, III and IV

A

(c) I, III, and IV

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7
Q

Hybrid Tier 1 capital can only be issued with the approval of:
(a) Bankers Association of the Philippines
(b) Bangko Sentral Ng Pilipinas
(c) Securities & Exchange Commission
(d) Philippine Stock Exchange
(e) Philippine Deposit Insurance Corp.

A

(b) Bangko Sentral Ng Pilipinas

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8
Q

Which of the following is not covered by PDIC insurance?
(a) Checking account
(b) Bank issued Lower Tier 2
(c) Savings account
(d) Time deposits
(e) None of the above

A

(e) None of the above

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9
Q

Based on circular 503, HT1 must be issued in minimum denominations of ________________or its equivalent
(a) $10,000
(b) Php 1,000,000
(c) Php 250,000
(d) $5,000
(e) Php 500,000

A

(e) Php 500,000

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10
Q

Consider two bonds, A and B. They are both issued by the same corporate firm. They both have the same maturity, seniority, and coupon. The only difference between the two bonds is that A is callable and B is not. Which of the following most likely best describe the relationship between A and B
(a) Bond A will have a lower yield than bond B.
(b) Bond B will have a lower price than bond A.
(c) Bond A will have a higher yield than bond B.
(d) Bonds A and B will have the same yields.

A

(c) Bond A will have a higher yield than bond B.

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11
Q

Which of the following is the most important in evaluating UITFs or Mutual Funds?
(a) Par Value
(b) Stated Value
(c) Asset Value
(d) Net Asset Value
(e) None of the above

A

(d) Net Asset Value

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12
Q

All of the following are characteristics of U.S. Treasury Notes EXCEPT:
(a) They have a maximum maturity of ten years
(b) They are sold at auctions
(c) They are interest bearing securities
(d) They are sold at discount

A

(d) They are sold at discount

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13
Q

What are securities sold with an obligation to buy them back?
(a) Federal funds
(b) Repurchase agreements
(c) Banker’s acceptances
(d) Commercial paper
(e) Subordinated Notes

A

(b) Repurchase agreements

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14
Q

Which of the following is an important characteristic of T-Bills?
(a) Nonnegotiable
(b) Illiquid
(c) Safety of principal
(d) Lack of secondary market
(e) None of the above

A

(c) Safety of principal

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15
Q

What bonds pay no interest?
(a) Income bonds
(b) Corporate bonds
(c) Below investment grade bonds
(d) Zero-coupon bonds
(e) Sovereign bonds

A

(d) Zero-coupon bonds

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16
Q

Which of the following securities are non interest bearing?
(a) T-bills
(b) T-notes
(c) T-bonds
(d) Retail Treasury Bonds
(e) All of the above

A

(a) T-bills

17
Q

What are bonds issued outside the U.S.that pay in U.S. dollars and do not require registration in the U.S.?
(a) Eurodollar bonds
(b) Ginnie Mae certificates
(c) Debentures
(d) Yankee bonds
(e) Samurai Bonds

A

(a) Eurodollar bonds

18
Q

Who is the manager of a mutual fund?
(a) Management company
(b) Custodian
(c) Investor
(d) Broker
(e) None of the above

A

(a) Management company

19
Q

Which of the following statements are False about commercial papers issued in the U.S. with maturities of not more than 270 days?
I. the issue is not rated
II. the issue has to be registered with the SEC
III. the proceeds can be used for plant expansion
IV. the issue is negotiable and traded in the market
(a) IandII
(b) II and III
(c) IandIV
(d) III and IV
(e) I and III

A

(e) I and III

20
Q

________________ are backed by the full taxing power of the sovereignty and therefore, are practically free from default.
(a) Corporate Bonds
(b) Commercial Papers
(c) Subordinated Debt
(d) Treasury Bills
(e) None of he above

A

(d) Treasury Bills

21
Q

The coupon (interest) of Philippine government securities are subject to withholding tax. This means that:
(a) tax will be paid by the holder to a government agency each time he/she receives interest
(b) the dealer will withhold tax on interest payment dates
(c) tax will be withheld by the issuer (the government agency that issued the security) on each interest payment dates
(d) None of the above

A

(c) tax will be withheld by the issuer (the government agency that issued the security) on each interest payment dates

22
Q

Which of the following is not among the types of securities the U.S. Treasury issues?
(a) Treasury Bond
(b) Treasury Paper
(c) Treasury Bills
(d) Treasury Note
(e) None of the above

A

(b) Treasury Paper

23
Q

The U.S. Treasury debt instruments issued in 2, 3, 5, and 10 years maturities are called _____________________
(a) Treasury Notes
(b) Treasury Bills
(c) Treasury Bonds
(d) None of the above

A

(a) Treasury Notes

24
Q

What is a price below par for a bond?
(a) Parity
(b) Basis point
(c) At a premium
(d) At a discount
(e) Market Price

A

(d) At a discount

25
Q

What gives the issuer the right to pay off bonds before maturity?
(a) Refunding
(b) Pre-refunding
(c) Put provision
(d) Call provision

A

(d) Call provision

SEC PHASE 2 (10 decks)

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