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Sampletest2-answers - ECON 423 Fall 2008 Test 3A On my...

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ECON 423: Fall 2008 Test 3A On my honor, I have neither given nor received unauthorized aid on this test: ______________ Name:___________________________________________ Section: _______________ SECTION I: (Multiple Choice Questions) 1. Which of the following is NOT a provision of the Sarbanes-Oxley Act? a. Improved Supervisory Oversight b. Reduce Conflict of Interest in accounting firms. c. Separation of the links between research and underwriting in investment banks . d. Improved quality of Information. 2. Balance Sheet for Bank A ____________________________________ Assets Liabilities _____________________________________ Reserves: $10 m Deposits: $95 m Assets: $90 m Equity: $5 m _____________________________________ Bank A made a profit of $0.5 m last year. Its ROE and ROA are a. 5% and 10% respectively. b. 10% and 5% respectively. c. 0.5% and 10% respectively. d. 10% and 0.5% respectively. 3. Which of the following was bought by Bank of America this year? a. Lehman Brothers b. Bear Sterns c. Merrill Lynch d. Morgan Stanley 4. If you want to buy shares of Google and the maximum price that you are willing to pay is $250 per share, you will place a a. Market order b. Limit order c. Stop-loss order d. Best efforts order 5. If interest rate falls, which of the following situations will decrease a bank’s interest income? a. RSA=$5 million; RSL=$5 million b. RSA=$20 million; RSL=$10 million 1
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c. RSA=$10 million; RSL=$20 million d. RSA=$100 million; RSL=$100 million 6. The following Act removed the separation of Commercial Banking and Investment Banking: a. Glass-Steagall Act b. The Gramm-Leach-Bliley Act c. The Federal Reserve Act d. The Sarbanes-Oxley Act 7. Let us say that you owned $100,000 worth of bonds sold by General Motors in 2007. If you wanted to protect your investment from default risk in 2007, you are likely to have bought a a. Collateralized Debt Obligation b. Credit Swap c. Credit Default Swap d. Interest rate Swap 8. The following will be entered as a payment in the current account of the U.S. balance of payments: a. A U.S. importer buys $1 million worth of toys from China. b.
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