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Question
Loan covenants:a. protect the borrower from lender interference in management.
b. are limited to "negative" provisions.
c. may limit discretionary cash outlays by borrowers.
d. are seldom enforced.
e. often result in the lender's bankruptcy.
Answer
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Related questions
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Which of the following is not true regarding collateralized mortgage obligations (CMOs)?
a. Interest earned on CMOs is exempt from state income taxes.
b. CMO yields are generally higher than comparable Treasury yields.
c. CMOs exhibit little default risk.
d. All of the above are true.
e. Only a. and c. are true.
Q:
Regulators generally prohibit banks from purchasing ____________ for income purposes.
a. Treasury bills
b. commercial paper
c. common stock
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b. A Lubbock County general obligation bond to build a new sewer plant.
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Banks can effectively improve their portfolios by:
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b. obtaining less call protection when rates are expected to fall.
c. reducing diversification when the economy is slowing down.
d. increasing bond quality when quality yield spreads are low.
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An investor can invest in either a tax-exempt security that pays 5% or a taxable corporate security of comparable risk and maturity that pays 8%. At what marginal tax rate will the investor be indifferent between these two securities?
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The static spread is:
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Eurobonds are subject to fewer regulations than U.S. issued bonds.
Q:
A forward market exchange in foreign currencies is an agreement to exchange:
a. currencies in the future at an unspecified time at an exchange rate determined at the time the contract is agreed to.
b. currencies in the future at a specified time at an unknown exchange rate.
c. currencies in the future at an unspecified time at an unknown exchange rate.
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Q:
Non-performing international loans do not completely reflect potential losses because:
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b. banks often loan borrowers funds to make payments on existing loans.
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The risk that a foreign government will suspend debt service payments is known as:
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Q:
The first type of international office that a bank forms outside its home country that is exploratory in nature is known as:
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c. a representative office.
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Q:
Historically, what has prevented universal banks from operating in the United States?
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b. The Glass-Stegall Act
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Q:
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a. France
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Q:
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a. 1.6%.
b. 2.0%.
c. 4.0%.
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Q:
Prior to the Basle Agreement, primary capital included all of the following except:
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c. undivided profits.
d. perpetual preferred stock.
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When increasing liabilities to meet liquidity needs, a bank should consider all of the following except:
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c. FDIC insurance premiums.
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Q:
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a. the respondent bank is required to purchase a minimum amount of services.
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e. it decreases interest income.
Q:
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Q:
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a. start-up capital loans.
b. mezzanine financing.
c. automobile financing.
d. seed money.
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What are the firm's estimated working capital needs?a. $90b. $540c. $630d. $1,170e. $2,034
Q:
In the credit process, which of the following activities falls under Credit Execution and Administration?
a. Financial statement analysis
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c. Officer call programs
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Q:
The risk of potential loss of interest and principal on international loans due to borrowers in a country refusing to make timely payments, as per the loan agreement is known as what type of risk?
a. International risk
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c. Continent risk
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Q:
In regards to repurchase agreements, the margin is:
a. a good faith deposit.
b. a loan against the repurchase agreement.
c. a risk-free guarantee.
d. the difference between the market value of the collateral and the amount of the loan.
e. all of the above.
Q:
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a. riskier than fed funds loans.
b. unsecured short-term loans.
c. secured overnight loans.
d. secured loans of reserves.
e. secured Fed funds loans.