polling questions ch 9-12 Flashcards
Why would the Federal Reserve Buy Mortgage Securities at the Beginning of the COVID Crisis?
The Fed wanted to address market dislocation to ensure the continuing flow of credit to households
True or False: Banks are the largest originators of home mortgages
False
What was the approximate level of 30-year mortgage rate on September 30, 2022?
7.0%
Why do Fannie and Freddie Exist?
To provide liquidity to the mortgage markets
What were the total bank losses in the 4th quarter of 2008?
$32.1 billion
What was the initial amount authorized by Congress for the Troubled Asset Relief Program (TARP)?
$700 billion
Financial institutions that hold fixed-rate mortgages in their asset portfolios are exposed to ____ risk because they commonly use funds obtained from short-term customer deposits to make long-term mortgage loans.
interest rate
From the perspective of default/credit risk, which financial instrument has the most risk?
common equity
Why were IPOs hot in 2021?
Strong equity markets enticed sellers to obtain excellent value for their companies
Why Are There Lock-Up Provisions for the Original Investors / Owners?
Prevents downward pressure on the stock that could occur if the original owners sold their shares
What is a SPAC?
A “shell” company designed to take companies public without going through the traditional IPO process.
A stock issuance by a specific firm that already has stock outstanding is referred to as a(n)
secondary stock offering
_____ are acquisitions that require substantial amounts of borrowed funds.
LBO
It is controversial when a Chief Executive is also Chair of the Board because…
it may be considered a conflict of interest in the Board’s role of providing corporate oversight
What will the Fed do at its November Meeting?
raise rates by 75bps
