Question 1

Which of the following observations concerning repurchase agreements is not true?

Accepted Answer

A) They can be viewed as collateralised short term loans where a financial security is swapped for cash. 
B) The repurchase market is a highly liquid and flexible source of funds for DIs needing to access liquidity to offset deposit withdrawals. 
C) Repos under the intra-day facility system are discouraged and attract an interest rate charge of 25 basis points above the target cash rate. 
D) It is difficult to transact a repurchase agreement borrowing late in the day. 
A) They can be viewed as collateralised short term loans where a financial security is swapped for cash. 
B) The repurchase market is a highly liquid and flexible source of funds for DIs needing to access liquidity to offset deposit withdrawals. 
C) Repos under the intra-day facility system are discouraged and attract an interest rate charge of 25 basis points above the target cash rate. 
D) It is difficult to transact a repurchase agreement borrowing late in the day.

Question 2

Which of the following statements is true?

Accepted Answer

A) Going-concern scenario refers to abnormal behaviour of cash flows in the course of business. 
B) Going-concern scenario focuses on the bank's liquidity policy in a worst case scenario. 
C) Going-concern scenario focuses on the bank's day-to-day liquidity management. 
D) None of the listed options are correct. 
A) Going-concern scenario refers to abnormal behaviour of cash flows in the course of business. 
B) Going-concern scenario focuses on the bank's liquidity policy in a worst case scenario. 
C) Going-concern scenario focuses on the bank's day-to-day liquidity management. 
D) None of the listed options are correct.

Question 3

Which of the following statements is true?

Accepted Answer

A) An increase in the liquidation costs of non-liquid assets encourages an FI to shift more funds into more liquid, lower yielding assets. 
B) A decrease in the yield of non-liquid assets will reduce holdings of liquid assets due to higher opportunity costs of holding liquid assets. 
C) The greater the volatility of the level of deposits, the greater the optimal proportion of reserve assets held to deposits. 
D) An increase in the liquidation costs of non-liquid assets encourages an FI to reduce their holdings of more liquid, lower yielding assets. 
A) An increase in the liquidation costs of non-liquid assets encourages an FI to shift more funds into more liquid, lower yielding assets. 
B) A decrease in the yield of non-liquid assets will reduce holdings of liquid assets due to higher opportunity costs of holding liquid assets. 
C) The greater the volatility of the level of deposits, the greater the optimal proportion of reserve assets held to deposits. 
D) An increase in the liquidation costs of non-liquid assets encourages an FI to reduce their holdings of more liquid, lower yielding assets.

Question 4

The adverse effects of a contagious run include the restrictions on the ability of individuals to transfer wealth through time and a negative impact on the level or rate of savings.

Accepted Answer

A) True 
 B)False

Question 5

A deep market is defined as a market in which:

Accepted Answer

A) low volumes of a particular security are traded. 
B) large volumes of a particular security are traded. 
C) low-priced securities are traded. 
D) high-priced securities are traded. 
A) low volumes of a particular security are traded. 
B) large volumes of a particular security are traded. 
C) low-priced securities are traded. 
D) high-priced securities are traded.

Question 6

Although Australia has only had an explicit deposit insurance scheme since 2008, it has had depositor protection since 1959 and has always had depositor preference.

Accepted Answer

A) True 
 B)False

Which of the following observations concerning repurchase agreements is not true?

Which of the following statements is true?

Which of the following statements is true?

The adverse effects of a contagious run include the restrictions on the ability of individuals to transfer wealth through time and a negative impact on the level or rate of savings.

A deep market is defined as a market in which:

Although Australia has only had an explicit deposit insurance scheme since 2008, it has had depositor protection since 1959 and has always had depositor preference.

Why Are Financial Institutions Special

The Financial Services Industry: Depository Institutions

The Financial Services Industry: Other Financial Institutions

Risk of Financial Institutions

Interest Rate Risk Measurement: The Repricing Model

Interest Rate Risk Measurement: The Duration Model

Managing Interest Rate Risk Using Off Balance Sheet Instruments

Credit Risk I: Individual Loan Risk

Market Risk

Credit Risk I: Individual Loan Risk

Credit Risk II: Loan Portfolio and Concentration Risk

Sovereign Risk

Foreign Exchange Risk

Liquidity Risk

Off-Balance-Sheet Activities

Technology and Other Operational Risk

Capital Management and Adequacy

Filters

Exam 15: Liability and Liquidity Management

Which of the following observations concerning repurchase agreements is not true?

Which of the following statements is true?

Which of the following statements is true?

The adverse effects of a contagious run include the restrictions on the ability of individuals to transfer wealth through time and a negative impact on the level or rate of savings.

A deep market is defined as a market in which:

Although Australia has only had an explicit deposit insurance scheme since 2008, it has had depositor protection since 1959 and has always had depositor preference.

Why Are Financial Institutions Special

The Financial Services Industry: Depository Institutions

The Financial Services Industry: Other Financial Institutions

Risk of Financial Institutions

Interest Rate Risk Measurement: The Repricing Model

Interest Rate Risk Measurement: The Duration Model

Managing Interest Rate Risk Using Off Balance Sheet Instruments

Credit Risk I: Individual Loan Risk

Market Risk

Credit Risk I: Individual Loan Risk

Credit Risk II: Loan Portfolio and Concentration Risk

Sovereign Risk

Foreign Exchange Risk

Liquidity Risk

Off-Balance-Sheet Activities

Technology and Other Operational Risk

Capital Management and Adequacy

Filters