Question 6 financial intermediaries can engage in

Question 6: Financial intermediaries can engage in credit risk transformation
as:
A: they obtain cost advantages due to their size and business volumes
transacted
B: they can quickly convert financial assets into cash, close to the current
market price
C: they develop expertise in lending and diversify loans
D: they can pool the savers’ short-term deposits and make long-term loans
Question 7: When a financial intermediary collects together deposits and
lends them out as loans to companies, it is engaging in:
Question 8: Chang, a private investor, purchases a Treasury bill with a
$10,000 par value for
$9,579. Two hundred days later, what is Jarrod’s expected annualized yield
from this
Nilai University/Academic /Set 1 Page 2 of 5

transaction?
Question 9: The following are correct regarding the money market
instruments except:
Question 10: The following are the characteristic of corporate bonds except:
A: mitigates conflicts with shareholder interest
B: some debt may be converted to equity
C: mechanism to adhere to a sinking fund provision
D: junk bonds is rated above BBB