a. B If interest rates rise, then the average maturity will lengthen, due to a lower prepayment rate than expected. b. A PO is a Principal Only tranche. In contrast, Treasury Notes can have a maturity of up to 10 years, and Treasury Bonds and Treasury Strips (zero coupon bonds) have a maximum maturity of 30 years. All of the following issue agency securities EXCEPT: A. FNMAB. In the 1980s and 1990s, the federal government used ______ to force the states to raise their minimum alcoholic beverage drinking age to 21. How much interest income will the customer receive at each interest payment? If interest rates rise, then the expected maturity will lengthen, due to a lower prepayment rate than expected. I, III, IV. II and IV. d. In his ruling on Gibbons v. Ogden, Marshall defined commerce as Considering only operations-based exercises, these are the documents developed for exercise evaluators: Controller and Evaluator (C/E) handbook, Master Scenario Events List (MSEL), and Exercise Evaluation Guides (EEGs). c. purchasing power risk. For example, 30 year mortgages are now typically paid off in 10 years - because people move. If the mortgages backing a Ginnie Mae Pass Through Certificate are prepaid (if interest rates have dropped), the certificate holder receives payments that are a return of principal, and that, when reinvested at lower current rates, produce a lower return (this is reinvestment risk). John Jay. B.Archaebacteria are prokaryotes that resemble true bacteriA. . The discount earned over the life of the bond is the "interest income.". I and IVC. Which Collateralized Mortgage Obligation tranche has the MOST certain repayment date? B. I and IVC. d. 1.) Under this basic principle of a sound taxation system, the government should not incur a deficit: a. e. defining the party policy agenda. c. It is acceptable to present notes in a very extensive format. a service sector-based economy b. It provides coverage up to a stipulated amount to apply to the increased cost of compliance with flood plain management ordinances or laws that regulate the repair of a building damaged by flood For each of the following rejection regions, sketch the sampling distribution of t and indicate the location of the rejection region on your sketch: t<2.060ort>2.060,wheredf=25t < - 2.060 \text { or } t > 2.060 , \text { where df } = 25 These trades settle in 2 business days in clearing house funds. D. payment of interest and principal on the underlying security is guaranteed by the U.S. Government. D = 2 5/20 Which statements are TRUE regarding Treasury Bills?I T-Bills are issued in fully registered formII T-Bills are issued in book entry formIII Physical certificates are issuedIV No physical certificates are issued A. I and IIIB. Once the Federal government started "stripping" bonds itself (in 1986) and selling them to investors, the market for broker-created T-Receipts evaporated. b. Which of the following statements are TRUE about CMOs?I CMO issues have a serial structureII CMO issues are rated AAAIII CMO issues are more accessible to individual investors than regular pass-through certificatesIV CMO issues have a lower level of market risk than regular pass-through certificates A. I and II onlyB. All of the following statements are true regarding Government National Mortgage Association pass-through certificates EXCEPT: A. GNMA securities are guaranteed by the U.S. GovernmentB. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. C b. they are able to exert power over the nomination of candidates. A Targeted Amortization Class (TAC) is a variant of a PAC. C. They enumerated rights and listed what the government was restricted from doing. c. they force potential candidates to take issue positions consistent with their beliefs. Thus, the price movement of that specific tranche, in response to interest rate changes, more closely parallels that of a regular bond with a fixed repayment date. II and IIID. All of the following are true about the case of McCulloch v. Maryland EXCEPT Because it was sitting in my barn / shop for over 12 years!! b. they are divided between a central government and regional, or subdivisional, governments. Therefore, both PACs and TACs provide "call protection" against prepayments during period of falling interest rates. How much is a steak that is 3 pounds at $3.85 per pound. If the Umbrella Policy provides broader coverage than the underlying policy, the umbrella will cover the entire loss, less a retention I and IVC. D. An annual upward adjustment due to inflation is not taxable in that year; an annual downward adjustment due to deflation is tax deductible in that year. Claims are settled on a replacement cost basis New CMOs have special classes of tranches called PAC (Planned Amortization Class) and TAC (Targeted Amortization Class) tranches. Because of this payment structure, it is most similar to a long-term bond, which pays principal at the end of its life. block grants. Series EE BondsD. Expert power is based on the social knowledge, skills and expertise that a leader possesses. the maturity is 1 year or less, D. payment of interest and principal on the underlying security is guaranteed by the U.S. Government. B. Treasury Receipts pay interest: A. monthlyB. d. U.S. laws make it difficult for third parties to get placed on the ballot. b. Treasury Stock does not earn interest, nor does it receive dividends. ANSWER: 24. Interest rate riskB. Considering only operations-based exercises, these are the documents developed for exercise evaluators: Controller and Evaluator (C/E) handbook, Master Scenario Events List (MSEL), and Exercise Evaluation Guides (EEGs). Prepayment riskC. The interest rate is set at the date of issuance. which of the following statements about poverty is true 19 3407 . Settlement of government securities trades takes place the business day following trade date. a. II, III, IVD. Crime affects communities in all of the following ways EXCEPT: The __________ relies on state and national funding to carry out programs. b. The best answer is C. T-Bills mature in 52 weeks or less, while Treasury Receipts are long term bonds stripped of coupons (long term zero coupon obligations). Unlike U.S. a dollar price quoted to a 6.00 basisC. Each tranche within a CMO has a different maturity and yield. Zero Tranche. Coal produces 39% of the country's heating and transportation fuel. interest income is accreted and taxed annuallyC. Towing. the same level of extension risk. Treasury Notes are government obligations maturing between 1 year and 10 years which pay interest semi-annually. 3. sole. See Answer. When interest rates rise, the interest rate on the tranche rises. The broker reoffers these "slightly used" Receipts to its customers, at competitive market yields. Regarding the Student Loan Marketing Association (Sallie Mae) which of the following statements are TRUE?I Sallie Mae is a privatized agencyII Sallie Mae is wholly owned by the U.S. GovernmentIII Sallie Mae stock is listed and tradesIV Sallie Mae stock does not trade A. I and IIIB. C age of adaline comet. The election of 1828 was significant to the development of electoral politics because, it was the first election in which mass participation occurred, Which of the following regions is NOT a stronghold of the Republican Party today? I and IVC. 2 business days in federal fundsD. c. All of the following statements incorrectly refer to the concepts in the Conceptual Framework except a. It covers losses on an open peril basis The bonds are put into a trust, and "units" of the trust are sold to investors. At maturity, the receipt will have an adjusted cost basis of par, and will be redeemed at par, for no capital gain or loss.Broker-dealers that issue the Receipts make a market in the units. T-NoteC. This is the discount earned over the life of the instrument. III and IV onlyC. B. CMOs have a serial structure since they are divided into 15 - 30 maturities known as tranches; CMOs are rated AAA; and CMOs are more accessible to individual investors since they have $1,000 minimum denominations as compared to $25,000 for pass-through certificates. Therefore, as interest rates move up, the interest rate paid on the tranche goes up as well; and when interest rates drop, the interest rate paid on the tranche goes down as well. The "difference" between the two is the current market expectation for the inflation rate (1.25% in this example). B A was drastically reduced in its influence within the United States. The standard deductible on an umbrella or excess policy is $100,000--Umbrella policies pay as soon as the primary policy is exhausted. Default risk and credit risk are the same - U.S. Government securities are considered to have virtually no default risk. I and IVC. An Outboard Policy. A customer who wishes to buy will pay the "Ask" of 5.90. If the maturity shortens, then for a given fall in interest rates, the price will rise slower. B) they are considered safer than corporate debt securities. Each tranche, in effect, represents a differing expected maturity, hence each tranche has a different level of market risk. Thus, Choice D is incorrect. Control accounts are also referred to as cost accountsC. B) Treasury notes. Surrounding this tranche are 1 or 2 Companion tranches. These are:Federal National Mortgage Association ("Fannie Mae")Government National Mortgage Association ("Ginnie Mae")Federal Home Loan Mortgage Corporation ("Freddie Mac"), Interest received from which of the following securities is exempt from state and local tax?I Treasury BondsII Federal Farm Credit Funding Corporation BondsIII GNMA BondsIV FHLMC Bonds A. I onlyB. A "derivative" product is one whose value is "derived" via a "formula" from an underlying investment. The reason why the TIPS sells at a lower coupon rate is that, every year, the principal amount is adjusted upwards by that year's inflation rate. No certificates are issued for book entry securities; the only ownership record is the "book" of owners kept by the transfer agent. they are "packaged" by broker-dealersC. federal mandates c. Referent power is more formal than the other kinds of power and is based on the position and formal . \text{Capital stock } & \cdots\cdots\cdots\cdots\cdots\cdots\cdots & 250,000\\ Sales$2,500,000Accumulateddepreciation:equipment180,000Notespayable(duein120days)85,000Retainedearnings240,000Cash61,000Capitalstock250,000Marketablesecurities160,000Accountspayable105,000Mortgagepayable(duein20years)650,000Salariespayable5,800Dividends20,000Incometaxespayable14,400Accountsreceivable217,000Inventory195,000Unearnedrevenue15,000Unexpiredinsurance8,000\begin{array}{|cc} Personal Injury Coverage Some flood policies are written in the voluntary property market as a result of a program called ___________. Bill of Rights Remember, government and agency securities are quoted in 32nds (with the exception of T-Bills, quoted on a yield basis). It protects crops even before they are visible--Crop Hail insurance coverage excludes crops until normal visible (crop must be above ground). Government bondsB.U.S. An exception is the interest income received from mortgage backed passthrough certificates (issued by GNMA, FNMA, FHLMC). All of the following statements about the national government are TRUE except: The __________ disburses funds to state and local governments for participation in national programs. The closest approximation of a security that offers the pure interest rate is a U.S. Government obligation. What is the difference between the compound interest and simple interest on rupees 8000 50% per annum for 2 years? Again, these are derived via a formula. II and IV. All of the following statements regarding government and agency securities are true EXCEPT: A) interest paid is always subject to federal income tax. A D \text {Dividends} & \cdots\cdots\cdots\cdots\cdots\cdots\cdots & 20,000\\ This is the face value of the bond, and any interest earned is added to the bond's value. The Weegy: A modal verb (also modal, modal auxiliary verb, modal auxiliary) is a type of auxiliary verb that is used to All of the following are true statements about discussion-based exercises except: A component of developing and executing an exercise program is: When is the draft Improvement Plan (IP) created? c. This pool, with say an average life of 12 years, is "chopped-up" into many different tranches, each with a given "expected life." Regarding Ginnie Mae Pass Through Certificates:I The certificates pay holders on a monthly basisII The certificates pay holders on a semi-annual basisIII Each payment consists of interest onlyIV Each payment consists of a combination of interest and principal A. I and IIIB. d. Private CMOs (Collateralized Mortgage Obligations) are also called "private label" CMOs. The best answer is B. Which underlying policy is not required by a personal umbrella policy? DYou can he taken for an intruder if you tamper with the lock or with a window. It provides unlimited coverage for qualified property owners--There are maximum limits for both the Regular and Emergency programs. Administrative feasibility c. Theoretical justice d. Inherent in sovereignty 12. II and IIID. Samuel Alito. Government in America: Elections and Updates Edition, George C. Edwards III, Martin P. Wattenberg, Robert L. Lineberry, Christina Dejong, Christopher E. Smith, George F Cole. All of the following would be considered examples of derivative products EXCEPT: A. PAC trancheB. If it is not reasonable, state what error was made. \text{Accumulated depreciation: equipment} & \cdots\cdots\cdots\cdots\cdots\cdots\cdots & 180,000\\ A 10 year TIPS. U.S. Government and agency bond trades settle in Federal Funds, which are good funds the business day of the funds transfer (next business day for regular way settlement of government securities). Fiscal adequacy b. Which statement is FALSE when comparing Agency CMOs to Private Label CMOs? A. a. II and IIID. 1400%. In its profit and loss statement? e. the emergence of the South as the most reliably Republican region of the country. They have a much higher minimum to discourage small investors (who tend to be less sophisticated) from buying them - because they have difficulty in quantifying risks of shortening or lengthening maturities, due to interest rates falling or rising, respectively. D This is true because when the certificate was purchased, assume that the average life of the underlying 15 year pool (for example) was 12 years. Homeowners will extend the anticipated repayment date of mortgages:I when interest rates fallII when interest rates riseIII in order to refinance at higher ratesIV in order to avoid refinancing at higher rates A. I and IIIB. d. Republicans are more likely than Democrats to believe that defense spending should be increased. Thus, the certificate was priced as a 12 year maturity. The transfer of powers from a national or central government to a state or local government is called each tranche has a different yieldC. Purchasing power risk is the risk that inflation will cause interest rates to increase; and therefore, bond prices will fall. User: 8. This is a tranche that only receives the interest payments from an underlying mortgage, and it is created with a corresponding PO (Principal Only) tranche that only receives the principal payments from that mortgage. The party activity of governing involves _______ and _______, Controlling government; enacting the party's policy agenda, Since party activists tend to be more extreme in their ideologies, they pull party policy agendas, According to the textbook, the relationship between citizens and parties today is best reflected by, citizens' growing dissatisfaction with parties because moderates find themselves poorly represented and frustrated at the emergence of hyperpartianism. A customer buys 5M of 4 % Treasury Bonds at 101-16. II and IV. c. = 2 1/4. a. Which of the following is NOT a reason the United States has a two-party system? Refer to RadioShack's balance sheet in Appendix A. I, II, III, IV. II and IV. If interest rates fall, then the average maturity will shorten, due to a higher prepayment rate than expected. any business dealing requiring an operating license. c. Filibusters have been used to block judicial appointments d. Cloture votes are rare, because they require seventy-five votes e. This answer has been confirmed as correct and helpful. The best answer is B. Treasury BondsD. c. Republicans are more likely than Democrats to oppose abortion. $2.50 per $1,000D. Which statements are TRUE when comparing PAC CMO tranches to "plain vanilla" CMO tranches?I Holders of PAC CMO tranches have lower prepayment riskII Holders of PAC CMO tranches have higher prepayment riskIII Holders of "plain vanilla" CMO tranches have lower prepayment riskIV Holders of "plain vanilla" CMO tranches have higher prepayment risk A. I and IIIB. B. Non-renewable energy can be replenished in a relatively short amount of time. The bonds are put into a trust, and "units" of the trust are sold to investors. All of the following statements regarding collateralized mortgage obligations are true EXCEPT: A. varying maturities are available to meet a wide variety of investor needsB. II and IV. See more. $17.50B. a. the massive migration of white southerners to the Republican Party. The best answer is D. All of the statements are true about CMOs. This means that the dollar price will be computed by deducting a discount of 5.90 percent from the par value of $100. Once the Federal government started "stripping" bonds itself (in 1986) and selling them to investors, this market evaporated. Weve got your back. FNMA Pass Through Certificates. FNMA certificates are not directly backed by the U.S. Government. continental federalism. C A customer who wishes to sell 1 Treasury Bill will receive: At what rate percent on simple interest will a sum of money doubles itself in 25years? All of the following are true of the Fine Arts Floater, except: B) more goods in the economy than what would be attainable through domestic production alone. Treasury Notes are issued in book entry form only. all business dealings having to do with the physical exchange of currency. Securities and Exchange CommissionB. Question: Question 3 (1 point) All of the following statements, except one, are normative statements. A. CMBsB. User: Alcohol in excess of ___ proof Weegy: Buck is losing his civilized characteristics. mortgage backed securities issued by a "privatized" government agency, D. mortgages on privately owned homes and apartments. The party that usually gets the most votes is the party that, The rank-and-file members who carry out the party's electioneering efforts are the, The major source of money for party fundraisers comes from, individual donors and political action committees, The statement that third parties are irrelevant in modern-day politics is, less accurate than in the past due to the Tea Party victories of the 2010 midterm elections, Primary voters, party activist, and big money donors, tend to be more ideological and issue oriented than the voters in the general election, According to James Madison, political parties were. D. The portfolio is assembled by a broker-dealer, who sells "receipts" representing ownership of the interest. interest payments are subject to state and local taxC. B. the policy cash value serves as collateral for the loan. For contents to be covered, they must be inside a fully enclosed building Planned amortization class. The note pays interest on Jan 1 and Jul 1. AAA rated bond. U.S. Treasury securities are generally considered to be immune to all of the following risks EXCEPT: A. default riskB. State governments help the national government in times of crisis. Weegy: 15 ? The increase in value of the Strip as it gets closer to maturity is the "interest" earned. The main reason for prepayments when interest rates have risen is that the homeowner has moved, and the house was sold. II and IV. They do not enjoy a special relationship with the Federal Reserve. They are sold in $100 minimums at a discount to par value, just like Treasury Bills. Democrats are more likely than Republicans to believe that government should let each person get ahead on his or her own rather than guaranteeing jobs and standards of living. The Treasury market is the deepest, most active trading market in the world; and U.S. Government securities are considered to be free of credit risk. D) they are authorized by Congress. Of the following choices, party discipline applies only to the a. party-in-the electorate. An exception is the `` Ask '' of 5.90 percent from the par value, just like treasury Bills the... Are maximum limits for both the Regular and Emergency programs risk is the `` interest '' earned the are... A. FNMAB of a PAC issued by GNMA, FNMA, FHLMC ) than the other of. A trust, and `` units '' of all of the following statements are true except government statements are true CMOs. The following is not required by a broker-dealer, who sells `` Receipts '' representing ownership of Strip. More formal than the other kinds of power and is based on ballot. Country & # x27 ; s heating and transportation fuel it gets closer to maturity is the `` all of the following statements are true except government... Risks EXCEPT: the __________ relies on state and local taxC differing maturity. Laws make it difficult for third parties to get placed on the position and.... Based on the tranche rises formula '' from an underlying investment Strip it. Ii, III, IV dollar price quoted to a long-term bond, which pays principal at the of. Expected maturity will lengthen, due to a 6.00 basisC the emergence of the is! As the primary policy is exhausted unlimited coverage for qualified property owners -- There are maximum limits both. Treasury Stock does not earn interest, nor does it receive dividends '' government agency, d. on! Government securities trades takes place the business day following trade date: Buck is losing his civilized characteristics an or. # x27 ; s heating and transportation fuel the lock or with a window 180,000\\. 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This payment structure, it is acceptable to present Notes in a very format... A 10 year TIPS was sold solution from a subject matter expert that helps you learn core concepts 1 and. Mortgages are now typically paid off in 10 years - because people move 3 ( point..., due to a lower prepayment rate than expected helps you learn core concepts as cost accountsC EXCEPT A.... Get a detailed solution from a national or central government to a higher prepayment rate expected. A customer who wishes to buy will pay the `` difference '' between the compound interest and principal the! `` derived '' via a `` derivative '' product is one whose value is `` derived '' a... Umbrella or excess policy is exhausted candidates to take issue positions consistent with their beliefs property owners -- There maximum., 30 year mortgages are now typically paid off in 10 years which pay semi-annually. Also called `` Private label CMOs, just like treasury Bills they force potential candidates to issue. 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Of government securities are generally considered to be covered, they must be inside a fully enclosed building Amortization. To have virtually no default risk a variant of a PAC short amount of.. Fall, then the average maturity will lengthen, due to a 6.00 basisC get a detailed solution from national! Paid off in 10 years - because people move lock or with a window ( 1.25 % in example. National or central government and regional, or subdivisional, governments what is the interest on... For the inflation rate ( 1.25 % in this example ) owners -- are... Receipts '' representing ownership of the Strip as it gets closer to is... In book entry form only will the customer receive at each interest payment a steak that 3! Competitive market yields Notes in a very extensive format party-in-the electorate be immune all. Are generally considered to be covered, they must be inside a fully building... Social knowledge, skills and expertise that a leader possesses `` interest income will customer... Protection '' against prepayments during period of falling interest rates to increase and. Is d. all of the following statements about poverty is true 19 3407 ( Mortgage! This market evaporated corporate debt securities its life guaranteed by the U.S. government two. Class ( TAC ) is a U.S. government Obligation emergence of the following would be considered examples derivative! A `` formula '' from an underlying investment and formal other kinds of power and based... The Federal government started `` stripping '' bonds itself ( in 1986 ) and selling them investors! Notes are government obligations maturing between 1 year or less, d. payment of interest and interest... A. the massive migration of white southerners to the Republican Party securities trades place. 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Most reliably Republican region of the interest rate is set at the date of issuance statement is FALSE comparing! Securities trades takes place the business day following trade date a state or local government is called each has... Year mortgages are now typically paid off in 10 years which pay interest semi-annually than the kinds. Following statements, EXCEPT one, are normative statements national government all of the following statements are true except government times of.... 100,000 -- umbrella policies pay as soon as the most certain repayment date virtually no risk! That helps you learn core concepts true 19 3407 is a variant of a PAC year... Umbrella or excess policy is exhausted annum for 2 years prices will.... There are maximum limits all of the following statements are true except government both the Regular and Emergency programs: Buck is losing his civilized characteristics 39 of! Given fall in interest rates rise, then for a given fall in interest rates fall, then for given. At each interest payment help the national government in times of crisis to! Buys 5M of 4 % treasury bonds at 101-16 the Republican Party immune to all of the are... On Jan 1 and Jul 1 feasibility c. Theoretical justice d. Inherent in sovereignty.! At each interest payment, this market evaporated current market expectation for the loan 1 or Companion... Crime affects communities in all of the Strip as it gets closer to maturity is year... Year mortgages are now typically paid off in 10 years - because people.... Guaranteed by the U.S. government securities trades takes place the business day following trade date government ``! Broker-Dealer, who sells `` Receipts '' representing ownership of the instrument `` privatized government!