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B) Debt Maturing buybac Repo Haircut widening D) Conduit Finance roll-off E) Pri

ID: 417755 • Letter: B

Question

B) Debt Maturing buybac Repo Haircut widening D) Conduit Finance roll-off E) Prime brokerage liquidity loss 17) Wha t is the moral hazard issue that arises from the establishment of the Lender of Last the banks know that they will be bailed out, the bankers may take on more risk 8) The Lender of Last Resort needs backing to be credible C) The Lender of Last Resort needs to act quickly and decisively Dj if everyone believes that the Lender of Last Resort will lend, then there is no need to Resort? A) If panic 18) Which of the following is correct (correct answers must be more than one) A) Interest rate relative to GDP growth is key to debt accumulation 8) High interest rates with low growth make debt dynamics unmanageable C) The greek debt to GDP ratio never exceeded 180%. 19) Which of the following are necessary mechanics of exiting Eurozone (Correct answers may be more than one) Aj Treaty considerations Currency and payment systems C) Banking and foreign exchange controls D) Creating high fiscal surplus E) Nationalization of commercial banks 20) Total contractionary impulse to bank lending will depend on which of the following factors? Carrect answers can be more than one) A) Losses on bad loans/investments. 8) Recapitalization propensity C) Change in desired leverage ratio 21) Low inflation is characterized by which of the following? Aj People trust money B) Prices rising slowly and predictably C People are willing to write long-term contracts in money terms D) A and B E) All of the above rrect answers may be more than one) Aj Overreliance on historical data B) Disregar C Giving a false sense of security to financial institutions D) Causing profit figures to be too high by overstating returns d for irrational or unexpected events which might impact on the financial world

Explanation / Answer

1st Picture:

17)
(A)
18)
B and C both are correct
19)
C and E both are correct
20)
A and C
21)
D
22)
B

2nd picture is not visible properly


3rd picture:
8)
A
9)
A
10)
C
11)
B (The reason is with high income the outcome of money demand is more which results in the increase of interest rates.)

12)
D
13)
B
14)
B
15)
A