RSM_230_Mid_Term_Soln-W2009[1]

RSM_230_Mid_Term_Soln-W2009[1] - Rotman School of...

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Rotman School of Management University of Toronto RSM 230 – Mid Term Exam February, 2009 INSTRUCTIONS: You have 90 minutes for this exam. Complete your Scantron and use it to answer Part A of the exam. Answer Part B of the exam on this paper in the space provided. All cell phones and portable electronic devices must be turned off. This is a closed book exam. No formula sheet is allowed. Non-programmable calculators are permitted. Please remain in your seats during the last 15 minutes of the exam period so you do not disturb others. PLEASE SUPPLY THE FOLLOWING INFORMATION : Student #__________________ Student Name___________________ Circle your Instructor’s Name: Will Huggins Maureen Stapleton Indicate your Section: Monday 8 am – 10 am ____ Wednesday 1pm – 3 pm _____ Monday 10 am – noon ____ Wednesday 3pm – 5 pm _____ Monday 4 pm – 6 pm ____ Wednesday 5pm –7 pm _____ This exam paper has 10 pages including the cover page. 1
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PART A – Multiple choice questions. (75% of total grade) Please answer in pencil on the Scantron provided. All questions have equal weight. 1. Which of the following is not a primary user of capital? C a) Government sector b) Business sector c) Households d) Foreign sector 2. Which of the following statements is not true about securitization? A a) Securitization transforms mortgages and other loans into marketable securities which are sold only to large institutional investors b) Assets are sold to an SIV which issues commercial paper c) Credit quality is enhanced by overcollateralization and bank guarantees d) Most securitizations received strong credit ratings. 3. Primary markets involve _____; while secondary markets involve_____. B a) The sale of securities; the sale of derivatives b) The sale of new securities to investors; trading of previously issued securities among investors c) The sale of securities of large corporations on a stock exchange; the sale of the securities of smaller companies on a stock exchange d) Trading of securities on a stock exchange; trading of securities OTC. 4. Which of the following statements is not true? B a) OSFI oversees Canadian chartered banks, insurers and pension funds. b) OSC is the national regulator of the Canadian securities industry c) CDIC provides up to $100,000 government insurance of Canadian bank accounts and GIC’s d) CIPF insures brokerage accounts up to $1 million against fraud e) Investment advice received from a broker or financial advisor is not guaranteed 2
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5. Financial assets include all of the following except: B a) Stocks and bonds b) Residential property c) The value of accumulated pension benefits d) Money market securities e) Bank accounts 6. Which of the following is not a financial intermediary? D a) Royal Bank of Canada (RBC) b) Ontario Teachers’ Pension Plan c) Manulife Financial d) The Bank of Canada 7. Seignorage is: C a) The legal tender or currency of a country b) The sale of marketable securities by the Bank of Canada c) Net revenue derived from issuing of coins and bank notes
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RSM_230_Mid_Term_Soln-W2009[1] - Rotman School of...

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