金融市场与机构Madura第九版题库ch09.doc

Chapter 9 Mortgage Markets 1. Mortgage-backed securities are commonly contained within collateralized debt obligations. A) True B) False ANSWER: A 2. Federally insured mortgages guarantee ?? A) loan repayment to the lending financial institution. B) that the interest rate will not increase during the life of the mortgage. C) the lending financial institution a selling price for the mortgage in the secondary market. D) all of the above ANSWER: A 3. At a given point in time, the interest rate offered on a new fixed-rate mortgage is typically __________ the initial interest rate offered on a new adjustable-rate mortgage. A) below B) above C) equal to D) all of the above are very common ANSWER: B 4. An institution that originates and holds a fixedrate mortgage is adversely affected by _______ interest rates; the borrower who was provided the mortgage is adversely affected by _______ interest rates. A) stable; decreasing B) increasing; stable C) increasing; decreasing D) decreasing; increasing ANSWER: C 5. Rates for adjustablerate mortgages are commonly tied to the A) average prime rate over the previous year. B) Fed’s discount rate over the previous year. C) average Treasury bill rate over the previous year. D) average Treasury bond rate over the previous year. ANSWER: C 6. Caps on mortgage rate fluctuations with adjustable-rate mortgages (ARMs) are typically A) 2 percent per year and 5 percent for the mortgage lifetime. B) 5 percent per year and 15 percent for the mortgage lifetime. C) 0 percent per year and 10 percent for the mortgage lifetime. D) 3 percent per year and 8 percent for the mortgage lifetime. ANSWER: A 7. From the perspective of the lending financial institution, interest rate risk is lower A) lower on a 30-year fixed-rate mortgage than on a 15-year fixed-rate mortgage. B) lower on a 15-year fixed-rate mortgage than on a 30-year fixed-rate mortgage. C) higher on a 15-year fixed-rate mortgage than on a 30-year fixed-