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Free ICBRR Exam Braindumps (page: 36)

Page 35 of 87
PDF with 342 Questions

Which of the following statements regarding CDO-squared is correct?

I) CDO-squared use other CDOs and CMOs as collateral.
II) Risk assessment of CDO-squared is almost impossible due to their complexity.
III) CDO-squared have lower credit risk than CMOs but higher than CDOs.

  1. I only
  2. I and II
  3. II and III
  4. I, II, and III

Answer(s): B



James Johnson manages a bond portfolio with all investment grade bonds. Adding which of the following bonds would minimize the credit risk of his portfolio?

  1. A
  2. B
  3. C
  4. D

Answer(s): A



Banks duration match their assets and liabilities to manage their interest risk in their banking book. Currently, the bank's assets and liabilities both have a duration of 10. To hedge against the risk of decreasing interest rates, the bank should

I) Increase the duration of the liabilities
II) Increase the duration of the assets
III) Decrease the duration of the liabilities
IV) Decrease the duration of the assets

  1. I only.
  2. I and II.
  3. II and III.
  4. I and IV

Answer(s): D



10 basis points are equal to:

  1. 10%
  2. 1%
  3. 0.1%
  4. 0.01%

Answer(s): C






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