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Asset-backed commercial paper is backed by all of the following except ____.
A) unsecured promissory notes
B) mortgages
C) car loans
D) credit card receivables
Answer: A
Diff: 1 Type: MC Page Ref: 197
Skill: Recall
Objective List: 9.3 Discuss the most recent financial crisis
The risk of asset-backed commercial paper depends on ____.
A) unsecured promissory notes
B) the underlying securities
C) commercial paper
D) Treasury bills
Answer: B
Diff: 1 Type: MC Page Ref: 197
Skill: Applied
Objective List: 9.3 Discuss the most recent financial crisis
"Plain vanilla" assets are ____.
A) unsecured promissory notes
B) residential mortgages
C) subprime mortgages
D) CDOs
Answer: B
Diff: 1 Type: MC Page Ref: 197
Skill: Recall
Objective List: 9.3 Discuss the most recent financial crisis
During the ABCP saga, The Bank of Canada ____.
A) shut down all non-bank sponsored conduits
B) refused to accept ABCPs as collateral for loans to banks
C) provided liquidity as a lender to the market
D) was bailed out by the CDIC
Answer: B
Diff: 2 Type: MC Page Ref: 197
Skill: Recall
Objective List: 9.3 Discuss the most recent financial crisis
What triggered the 2007- 20 08 financial crises?
Answer: The crises was triggered by mismanagement of financial innovation in the sub prime
residential mortgage market and the bursting of a bubble in housing prices.
Diff: 1 Type: SA Page Ref: 204
Skill: Recall
Objective List: 9.3 Discuss the most recent financial crisis