判断错

判断错
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Following World War II, the United States has been one of the first major industrial countries to use securitization in its savings and loan and commercial banking systems. Answer: FALSE 8) In general, securitization tends to improve credit quality because loans are moved away from the original lenders. Answer: FALSE 10) Securitization tends to strengthen the link between borrower and lender by encouraging continuous monitoring behavior by the lender. Answer: FALSE 13) Portfolio Theory has proven to be remarkably accurate in the idea that, whereas a single large subprime borrower constituted significant risk, a portfolio of subprime borrowers which was securitized did not. Answer: FALSE 7) The European and American terms for foreign currency exchange are square roots of one another. Answer: FALSE 4) Swap and forward transactions account for an insignificant portion of the foreign exchange market. Answer: FALSE 4) New York City has the greatest volume of foreign exchange activity in the world. Answer: FALSE 2) Daily trading volume of foreign exchange had actually decreased in 2010 from the levels reported in 2007. Answer: FALSE 10) The primary motive of foreign exchange activities by most central banks is profit. Answer: FALSE 4) Currency trading lacks profitability for large commercial and investment banks but

is maintained as a service for corporate and institutional customers. Answer: FALSE 8) If a market basket of goods cost $100 is the US and 70 euros in France, then the PPP exchange rate would be $.70/euro. Answer: FALSE 25) Consider the price elasticity of demand. If a product has price elasticity less than one it is considered to have relatively elastic demand. Answer: FALSE 3) The final component of the equation for the Fisher Effect, (r)(π), where r = the real rate of return and π = the expected rate of inflation, is often dropped from the equation because the number is simply too large for most Western economies. Answer: FALSE 11) The current U.S. dollar-yen spot rate is 85¥/$. If the 90-day forward exchange rate is 88 ¥/$ then the yen is at a forward premium. Answer: FALSE 17) Both covered and uncovered interest arbitrage are risky operations in the sense that even without default in the securities, the returns are unknown until all transactions are complete. Answer: FALSE 5) If the forward exchange rate is an unbiased predictor of future spot rates, then future spot rates will always be equal to current forward rates. Answer: FALSE 6) Other things equal, the price of an option goes up as the volatility of the option decreases. Answer: FALSE 5) The time value is asymmetric in value as you move away from the strike price. (i.e., the time value at two cents above the strike price is not necessarily the same as the time value two cents below the strike price.) Answer: FALSE 3) The more INEFFICIENT the market is, the more likely it is that exchange rates are "random walks," with past price behavior providing no clues to the future. A

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