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Question
What is the essential idea behind RAROC?
A. Evaluating the actual or contractually promised annual ROA on a loan.
B. Analyzing historic or past default risk experience.
C. Balancing expected interest and fee income less the cost of funds against the loan's expected risk.
D. Extracting expected default rates from the current term structure of interest rates.
E. Dividing net interest and fees by the amount lent.
Answer
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Related questions
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The two policy categories offered by property-casualty insurers that are most likely to be subject to rate regulation are
A. auto insurance and worker's compensation.
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C. earthquake and flood.
D. surety bonds and financial guaranty.
E. product liability and farm owner multiple peril.
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The McCarran-Ferguson Act of 1945
A. separated commercial banking from insurance activities.
B. mandated federal insurance company charters.
C. stipulated that insurance companies are to be regulated at the state level.
D. initiated a national insurance guaranty fund.
E. limited insurance company assets to low risk government securities.
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The surrender value of an insurance policy is
A. the expected payment commitment on existing policy contracts.
B. a fund established and held separately from the company's other assets.
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D. the same as the endowment payout.
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A. Position trading.
B. Pure arbitrage.
C. Liquidity trading.
D. Risk arbitrage trading.
E. Program trading.
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A. has publicly-traded common stock.
B. provides equity funds to companies that already have publicly traded common stock.
C. is a subsidiary of a nonfinancial corporation.
D. provides debt funding to only to established corporations.
E. is subject to more stringent disclosure requirements than other venture capital firms.
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Which of the following would be a key area of activity for an investment bank specializing in the commercial side of the business?
A. Purchase of existing securities.
B. Sale of securities in the secondary market.
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