251. The idea behind a capital adequacy ratio is that banking risk should be borne by:
Correct answer: (a)
Shareholders
252. The interest yield on the treasury bill in question 2 is:
Correct answer: (c)
4.75%
253. The Italian banking system was similar to the US system in the 1930s in which of the following ways?
Correct answer: (A, C, D)
There were many small banks in both countries
Investment banking was kept separate from commercial banking in both countries
The state played a major role in both systems
254. The largest item in the asset portfolio of German households in 2006 was:
Correct answer: (B)
Insurance policies
255. The major institutional holders of equity in Sweden are:
Correct answer: (D)
Insurance companies
256. The ownership of ordinary company shares gives shareholders:
Correct answer: (A)
A share in the management of the company
257. The Phillips curve implied that there was a trade-off available to governments between:
Correct answer: (A)
Inflation and unemployment
258. The real rate of interest required by investors is 3% p.a., inflation for the next year is expected to be 4% and the liquidity premium is 1% for every year to maturity. If the rate quoted on a two year loan is 11%, the risk premium must be:
Correct answer: (D)
3%
259. The reason that finding the present value of a future sum of money requires us to discount it, is that:
Correct answer: (D)
Waiting deprives us of its use
260. The recent structural changes in the US banking system have been the result of which five of the following:
(a) The depression of the 1930s
(b) Mergers and acquisitions
(c) Legislative changes affecting interstate expansion
(d) The growth of off-shore banking
(e) Legislative changes affecting expansion by branching
(f) The junk bonds collapse
(g) Failures of depository institutions
(h) The end of the IMF fixed exchange rate system
(i) Increased international capital flows
(j) Changes in credit union membership regulations
Correct answer: (F)
(b), (c), (e), (g) and (j)