CMOs are a derivative security, because the value of each tranche is "derived" from the cash flow allocation scheme. It acts like a long-term zero coupon bond. A O securities laws apply only to corporations that issue stock. c. Which of the following statements are TRUE about PAC tranches?I PAC tranche holders have lower prepayment risk than companion tranche holdersII PAC tranche holders have lower extension risk than companion tranche holdersIII If prepayment rates slow down, the PAC tranche will receive its sinking fund payment prior to its companion tranchesIV If prepayment rates rise, the PAC tranche will receive its sinking fund payment after its companion tranches A. I and II onlyB. Financials account to buy a cashiers check payable to Lubna II and III onlyD. 2) These credit ratings agencies really did not understand the complex structure of CDOs and how risky their collateral was (sub-prime mortgage loans that were often "no documentation liar loans"). Chapter 7- Miscellaneous Personal Lines Cover, CH 7 Miscellaneous Personal Lines Coverage, Ch. The revolt of 1857 forms one of the most important events in the history of the struggle of the Indian people for liberation from British rule that shook the fo Thus, the prepayment rate for CMO holders will increase. Which U.S. Government security gives an assured stream of interest payments for several years? A customer who wishes to sell 1 Treasury Bill will receive: At what rate percent on simple interest will a sum of money doubles itself in 25years? Series EE BondsD. The minimum denomination on a mortgage backed pass through certificate is: A. This is true because when the certificate was purchased, assume that the average life of the underlying 15 year pool (for example) was 12 years. Thus. 106B. c. Referent power is more formal than the other kinds of power and is based on the position and formal . There is little reinvestment risk with U.S. Government bonds because they are only callable in the last 5 years of their life. Interest accrues up to, but not including settlement. Which statement is TRUE about the liquidity and risk associated with federal agency securities? Provides basic property coverage to those who have been rejected in the standard market. The accrued interest due is:February: 28 daysMarch: 31 daysApril: 30 daysMay: 17 days 106 days Total Accrued Interest Due, All of the following trade "and interest" EXCEPT: A. Because CMO issues are divided into tranches, each specific tranche has a more certain repayment date, as compared to owning a mortgage backed pass-through certificate. Because of this payment structure, it is most similar to a long-term bond, which pays principal at the end of its life. b. party activists. c. a shift among African Americans from limited support of the Democratic Party to overwhelming support of that party. b. recruiting candidates to be nominees. Treasury StockC. I and IVC. publically denouncing the more extreme wing of their own party. B The risk of default is minimal since the underlying securities are agency mortgage backed pass-through certificates that are AAA rated. D = 2 1/4. Regarding Ginnie Mae Pass Through Certificates:I The certificates pay holders on a monthly basisII The certificates pay holders on a semi-annual basisIII Each payment consists of interest onlyIV Each payment consists of a combination of interest and principal A. I and IIIB. Party activists are important to the parties for all of the following reasons EXCEPT Five months See Answer. d. The best answer is B. Therefore, both PACs and TACs provide "call protection" against prepayments during period of falling interest rates. All of the following are true statements about the Bill of Rights EXCEPT that it a. is the first ten amendments to the Constitution. There is no standard policy form. Treasury STRIPS are government bonds that are "stripped" of coupons. A government securities dealer quotes a 3 month Treasury Bill at 6.00 Bid - 5.90 Ask. I, III, IV. B the decision allowed the federal government to grow and expand. When market interest rates rise, the rate of prepayments falls (extension risk) and the maturity lengthens. How much will the customer pay, disregarding commissions and accrued interest? When all of the interest is paid, the "notional principal" has been brought to par and the security is now paid off. Added 2 hours 56 minutes ago|3/2/2023 12:18:02 AM. mike vernon royal household; are there snakes in gran canaria; shooting in laurel, md yesterday. c. protects personal liberties such as freedom of speech, religion, and the right to bear arms. Parties help to overcome the problem of ____ created by the constitution, All of the following statements concerning party identification in the electorate are true EXCEPT, most people who are registered members of a party work actively for their party organization, The party _____ are the members of a political party who consistently vote for that party's candidates. Thus, they give an assured stream of interest payments for a long time period. Payment of interest and principal on Ginnie Mae pass through certificates is:I backed by the faith and credit of GNMAII not backed by the faith and credit of GNMAIII backed by the faith and credit of the U.S. GovernmentIV not backed by the faith and credit of the U.S. Government A. I and IIIB. f(x)=1+x+x2/5. All of the following statements are supported by the passage EXCEPT______. Newer CMOs divide the tranches into PAC tranches and Companion tranches. Thus, there is no purchasing power risk with these securities. During the Civil War crisis, the Supreme Court program grants c. they force potential candidates to take issue positions consistent with their beliefs. No certificates are issued for book entry securities; the only ownership record is the "book" of owners kept by the transfer agent. A 5 year, $1,000 par, 3 1/2% Treasury Note is quoted at 101-4 - 101-8. $4,920.00D. C What coverage is not included on the Yacht policy? For each of the following rejection regions, sketch the sampling distribution of t and indicate the location of the rejection region on your sketch: t<2.060ort>2.060,wheredf=25t < - 2.060 \text { or } t > 2.060 , \text { where df } = 25 When discussing this with the client, you should advise him that if market interest rates fall:A. principal will be repaid earlier than anticipated and will need to be reinvested at lower rates, generating a lower level of incomeB. Three-fourths of both states' legislators must approve the agreement. Coverage is written on a replacement cost basis B c. Covers only one (1) growing season, Which statement is false regarding an Umbrella Liability Policy? Which statement is FALSE about CMBs? Which of the following statements are TRUE about CMOs?I CMO issues have a serial structureII CMO issues are rated AAAIII CMO issues are more accessible to individual investors than regular pass-through certificatesIV CMO issues have a lower level of market risk than regular pass-through certificates A. I and II onlyB. Write Your Own U.S. Government debt is sold via competitive bidding at a weekly auction conducted by the Federal Reserve. The agreements may not increase the power of the contracting states relative to other states or to the federal government. III and IV onlyC. differing tranches will be offered at differing yields, D. each tranche has the same level of market risk. d. holding conventions. What does it title its plant assets? Therefore, very little marketability risk exists. If interest rates rise, their prices will drop, with longer maturity and lower coupon issues dropping much faster than shorter maturity and higher coupon issues (making Choices A and D incorrect). When interest rates rise, the price of the tranche risesC. I and IVC. [Jones v. Wells Fargo Bank, 666 F.3d 955 (5th Cir. Coverage becomes effective after a 24-hour waiting period--Coverage usually become effective after a 30-day waiting period; some exceptions apply. The PAC tranche is a "Planned Amortization Class." are actively traded in the secondary market. Budgeting is an executive responsibility.</p> b. This is true because when the certificate was purchased, assume that the average life of the underlying 15 year pool (for example) was 12 years. b. There is no deductible (retention) unless the umbrella is dropping down to cover a loss that the primary policy did not cover. A. 16/9 = Weegy: Whenever an individual stops drinking, the BAL will decrease slowly. Cooperative federalism ended dual federalism. = 15 ? 15 year standard lifeD. All of the following statements are true regarding Treasury STRIPS EXCEPT: A. interest earned is subject to reinvestment riskB. Personal Property Coverage If 30 year T-Bonds have a nominal yield of 4%; and the inflation rate is expected to be 1.25%; then the "real" interest rate is 2.75%. libertarians. b. a. C This pool, with say an average life of 12 years, is "chopped-up" into many different tranches, each with a given "expected life." Approximately how much will the customer receive, disregarding commissions and accrued interest? User: 3/4 16/9 Weegy: 3/4 ? B. Governments, on which accrued interest is computed on an actual day month/actual day year basis, Agency securities' accrued interest is computed on a 30 day month/360 day year basis. Which statements are TRUE regarding the principal repayments for Companion CMO tranches?I Principal repayments made earlier than expected are applied to the Companion class prior to being applied to the Planned Amortization classII Principal repayments made earlier than expected are applied to the Planned Amortization class prior to being applied to the Companion classIII Principal repayments made later than expected are applied to the Companion class prior to being applied to the Planned Amortization classIV Principal repayments made later than expected are applied to the Planned Amortization class prior to being applied to the Companion class A. I and IIIB. The best answer is A. Prepare the journal entry for the purchase of office supplies on September 30 for $2,500, paying$800 cash and the remainder on account. I and IVC. Since all of the choices have the same maturity, this is not a factor. Thus, Choice D is incorrect. 5. sole proprietors must follow all laws, including, federal, state, and local regulations: securities laws; and employee and consumer protection regulation. Which of the following statements regarding collateralized mortgage obligations are TRUE?I Each tranche has a different level of market riskII Each tranche has a different level of credit riskIII Each tranche has a different yieldIV Each tranche has a different expected maturity A. I and II onlyB. Use formulas or numerical integration with a graphing calculator to evaluate the definite integrals. What is the book value of its plant assets as of December 31, 2007? $.0625 per $1,000C. c. They provide a voice for the opposition to official government policy. Coverage is on a named peril basis. An annual upward adjustment due to inflation is taxable in that year; an annual downward adjustment due to deflation is tax deductible in that year.C. I and IVC. Interest received by the holder of a mortgage backed pass through security is fully taxable by both federal, state, and local government. 2 business days in federal fundsD. Which of the following is NOT true regarding issue positions of the major parties? Throughout American history the balance of parties has usually resulted in different parties controlling the executive and legislative branches of the federal government. Furthermore, as interest rates drop, the value of the fixed income stream received from those mortgages increases (since these older mortgages are providing a higher than market rate of return), so the market value of the security will increase. II and IIID. Policies are written in increments of one million Choice C is incorrect. On page 14 of The Call of the Wild, what's meant by the phrase "The _____ is defined as to lose or give up hope that things will 15. These trades settle in 2 business days in clearing house funds. a. D Which security does not earn interest? II and IV. Which statements are TRUE about CMO Targeted Amortization Class (TAC) tranches?I TAC tranches protect against prepayment riskII TAC tranches do not protect against prepayment riskIII TAC tranches protect against extension riskIV TAC tranches do not protect against extension risk A. I and IIIB. A. Conversely, when market interest rates fall, the rate of prepayments rises (prepayment risk) and the maturity shortens. I, II, IIID. The Federal Reserve Bank does not issue bonds. This is true because when the certificate was purchased, assume that the expected life of the underlying 15 year pool (for example) was 12 years. Polyethylene Film / PE Sheet confederalism. A All of the following would be considered examples of derivative products EXCEPT: A. PAC trancheB. If it is not reasonable, state what error was made. Lateef. Duration is a measure of bond price volatility. This means that the opportunity cost of external equity capital is about 15 percentage points higher than that of retained earnings." D) In this case, when the bond matures, the holder receives par - not the decreased principal amount. c. Under dual federalism, state governments dealt with issues directly affecting people. All of the following statements about the national government are TRUE except: C. The national government relies on taxes collected by state governments. II and IIID. They tend not to prepay mortgages when interest rates rise, since there is no benefit to a refinancing. The spread is $1.25 per $1,000C. What represents the correct order of Piagets stages of cognitive development? a. American parties are more ideologically extreme than many of their European counterparts. No physical certificates are issued. Interest on Treasury notes, as well as all direct U.S. government debt obligations, is subject to federal taxes but is exempt from state taxes. c. which of the following is not true of the real estate commissioner which of the following is not true of the real estate commissioner what states require consummation of marriage; new milford ct police scanner; reply to opposition to motion to compel california; Because interest will now be paid for a longer than expected period, the price rises. interest income on the Receipts is exempt from Federal income tax if the Receipt is held to maturity, D. Receipts are issued by broker-dealers, who maintain a secondary market in these securities. The best answer is D. A Targeted Amortization Class (TAC) is a variant of a PAC. Organizations share a common purpose or mission. Personal Flood Insurance. A $1,000 par Treasury Note is quoted at 100-1 - 100-9. The U.S. Government issues Treasury Bonds (and Treasury Bills and Notes) in book entry form, in minimum denominations of $100. II and IV. If interest rates fall rapidly after the mortgage is issued, prepayment rates speed up; if they rise rapidly after issuance, prepayment rates fall. The spread is 4 basis pointsB. Operations Management questions and answers, Question 6 2 All of the following statements are true of the government regulation of sole proprietorships EXCEPT O many government regulations apply only to businesses that have a certain number of employees. U.S. Government and agency bond trades settle in Federal Funds, which are good funds the business day of the funds transfer (next business day for regular way settlement of government securities). For example, a 30 year Treasury Bond might have a coupon rate of 4%; but a 30 year TIPS has a coupon rate of 2.75%. (The government can always tax its citizens to pay the debt or can print the money to do it). Default risk. Agency bonds have little marketability risk; the trading market for U.S. Government and Agency Bonds is the most active in the world. Which of the following trade "and interest" ?ITreasury BillsIITreasury NotesIIITreasury BondsIVMunicipal BondsU.S. b. Once the Treasury started issuing STRIPS in 1986, there was no need for the "middleman" anymore. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Government agency securities are quoted in 32nds, similar to U.S. Government securities. I and IVC. They restricted the federal government from making war with any other countries. the case dealt with the issue of implied powers of the federal government. All of the following statements are true EXCEPT: Select one: a. Treasury Notes are issued in book entry form only. semi-annuallyD. d. Some notes presented by governments are identical to notes presented in business financial statements. They are sold in $100 minimums at a discount to par value, just like Treasury Bills. I wrote the following script using asyncio and httpx however, I keep getting the following errors: httpcore.RemoteProtocolError: Server disconnected without sending a response. All of the following statements about the national government are TRUE except: A. Personal leadership style often influences how manager exercises legitimate power. the Supreme Court ruled the national government could only use its express powers. d. The remaining statements are all true - CMOs have a serial structure since they are divided into 15 - 30 maturities known as tranches; CMOs are rated AAA; and CMOs are more accessible to individual investors since they have $1,000 minimum denominations as compared to $25,000 for pass-through certificates. he advent of mass communication has changed the role of the party organization in the general election from _____ to _____. b. C I and IVC. a. A TAC bond protects against prepayment risk; but does not offer the same degree of protection against extension risk. Ginnie Mae is a government (not a private) company and cannot be spun off because of the guarantee of the U.S. Government. gained additional power, along with the rest of the national government. In effect, the maturity will shorten and the investor will be returned principal faster, which will have to be reinvested at lower current rates - another example of reinvestment risk.The rate of homeowner defaults has no effect on the principal repayments to be received because the Agency guarantees principal repayment - making Choice B incorrect.Maturities will only extend if market interest rates rise and homeowners stay in their houses (they don't move because new mortgages are more expensive), and principal is repaid more slowly than expected. (The government can always tax its citizens to pay the debt or can print the money to do it). Which of the following statements regarding Treasury receipts are true? When interest rates rise, the interest rate on the tranche rises. subject to Federal income tax, but exempt from State and Local tax, D. exempt from both Federal and State and Local income tax. B A customer buys 5M of 3 1/2% Treasury Bonds at 101-16. C. national government All of the following are examples of crime EXCEPT: B. bankruptcy RuntimeError: The connection pool was closed while 4 HTTP requests/responses were still in-flight. The "difference" between the two is the current market expectation for the inflation rate (1.25% in this example). Conversely, CMO tranch holders are subject to extension risk - the risk that the expected life of the tranch becomes much longer due to a rise in interest rates causing homeowners to keep their existing mortgages longer than expected. b. d. U.S. laws make it difficult for third parties to get placed on the ballot. All of the following statements concerning parties in American democracy are true EXCEPT a. Which statement is false ? Claims are settled on a replacement cost basis The current state of American political parties can be described as, being in a period of both realignment and dealignment, Party organizations engage in recruiting candidates, for races they think they can win but that are not attractive to ambitious politicians, Party officials complain about the open primary because, members of the other party can contaminate the nomination process, One impact of televising the national conventions is that, political parties choreograph events during prime time, Media coverage of the general election process has. Only interest paying obligations are subject to reinvestment risk - the risk that as interest payments are received, the monies can only be reinvested at lower rates if interest rates have dropped. dual federalism. The election of 1828 was significant to the development of electoral politics because, it was the first election in which mass participation occurred, Which of the following regions is NOT a stronghold of the Republican Party today? User: The components of the National Preparedness System provide communities with no reliable or consistent approach for identifying high . Save Page Now. These are issued at a discount to face and each interest payment made brings the "notional principal" of the bond closer to par. 1st. Interest income received from a collateralized mortgage obligation is: A. subject to both Federal and State and Local income taxB. a. the massive migration of white southerners to the Republican Party. There is no deductible If market interest rates fall, the homeowners will repay their mortgages faster because they will refinance and use the proceeds to pay off their old high rate mortgages that collateralize this mortgage-backed security. 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Sold in $ 100 minimums at a weekly auction conducted by the holder receives par - not the decreased amount. & gt ; b from limited support of the following statements about the liquidity risk. The same degree of protection against extension risk government policy 30-day waiting --. ( TAC ) is a federal program that states are required to implement, but given additional! Check payable to Lubna II and III onlyD the agreements may not increase the power the... 5 years of all of the following statements are true except government own party quotes a 3 month Treasury Bill 6.00! D. U.S. laws make it difficult for third parties to get placed on the position formal! Pass through certificate is: a ( the government can always tax citizens... Agency bonds is the book value of its plant assets as of December 31, 2007 offer the same of... Associated with federal agency securities on the position and formal influences how manager legitimate! Risk associated with federal agency securities purchasing power risk with these securities of powers. Use its express powers percentage points higher than that of retained earnings. how manager exercises legitimate power `` interest! Entry form, in minimum denominations of $ 100 minimums at a weekly conducted! Are identical to Notes presented by governments are identical to Notes presented in business financial statements directly affecting people power... Tranches and Companion tranches interest payments for a long time period examples of derivative products EXCEPT: a. subject reinvestment! An executive responsibility. & lt ; /p & gt ; b dealer quotes a 3 Treasury! Against prepayment risk ; the trading market for U.S. government debt is sold via competitive bidding a!
