FIMana Questions

7/24/2019 FIMana Questions

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FIMana questions:

INSURANCE:

1. What is the largest item on liability sie o! balan"e sheet !or li!e insuran"e

"om#anies$

Ans: #oli"y reser%es&. What is the loss ratio$

Ans: in the #ro#erty' "asualty insuran"e( the a"tual losses in"urre on an

insuran"e line( i%ie by the #remium earne.). What is the essen"e o! adverse selection#roblem in insuran"e$

Ans: the "ustomer most eager to a##ly !or an insuran"e "ontra"t *ill be those

most li+ely to ha%e a "laim against the insuran"e "om#any.,. What +in o! asset insuran"e "om#anies ha%e$

Ans: long-term assets. What +in o! liabilities insuran"e "om#anies ha%e$

Ans: long-term liabilities

/. What is long-tail loss$Ans: the term re!erring to a #henomenon in the #ro#erty-"asualty insuran"e

business 0 *hen a "laim may o""ur many years a!ter the rele%ant insure

e%ent. E2am#le ty#e o! li!e insuran"e$

A: uni%ersal li!e( mortgage( term3. What is not ty#e o! li!e insuran"e$

A: *holesale insuran"e4. What uni%ersal li!e insur allo* #oli"yholers$

A: allo* #oli"yholer to alter their #ayment o%er time15.What mortgage li!e insur o$

A: #ay o6 #oli"yholer7s mortgage in e%ent o! #erson7s eath

11.What #remium #ay !or li!e insur e#en on$A: - #ersonal "hara"teristi"s 8su"h as age9- Cash %alue- Amount o! insur

1&.What institution o6er li!e insur$A: - nan"ial insti #ro%ie ban+ing n bro+erage ser%i"e- Subsiiary o! nan"ial "onglomerate- Ine#enent rm

1).What relationshi# bet* %alue o! the home n %alue o! insur #remium$A: #ositi%e( higher higher( lo*er lo*er

1,.Who #ro%ie to auto insur$A: #ro#erty n "asualty insur "om#any

;R IN?ES@MEN@ ;AN=S:

1. What is in%estment ban+$Ans: the nan"ial institution that hel#s "or#orations raises !uns

&. What in%estment ban+ sell( an to *hom$Ans: sell ne* se"urities to the #ubli"

). What se"urities rm sell( an to *hom$Ans: sell e2isting se"urities to the #ubli"


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,. What is the #rimary !un"tion o! in%estment ban+$Ans: hel#ing the "or#orations raise !uns

. What tas+s in% ban+ers #er!orm *hen a"t as uner*riter to sell se"urities to

#ubli"$- #ri"ing se"urity- #re#are lings require by Se"urities an E2"hange Commission- arrange !or se"urity to be rate

/. What oes the #ro"ess uner*riting sto"+ or bon requirese"urities rm$Ans: to #ur"hase entire issue at #reetermine #ri"e an then resell it in the

mar+et. What is syni"ate$

A: grou# o! in% ban+er( ea"h one buy only a #ortion ne* se"ur to be issue3. Who are buyers o! #ri%ate #la"ement issue$

A: insur "om n #ension !un4. What i6 bet* bro+er n ealer$

A: - bro+ers are #ure mileman- >ealers ma+e mar staning reay to buy n sell at gi%en #ri"e

15.What r +ey a"ti%ities o! Se"ur Com n In% ;an+$A: - in%est- Mar ma+ing- - #ro#rietary traing- -a%ise MA

11.What r not +ey a"t o! Se"ur Com n In% ;an+$A: e#osit ta+ing

1&.What e2am#le is e#osit ta+ing insti$A: -"ommer ban+- Sa%ing ban+- Creit union- Sa%ing n loan

1).What in% ban+ not o$A: e#osit ta+ing insti1,.Where in% ban+ #er!orm main !un"tion$

A: #rimary amr !or se"ur1.Wherese"ur bro+er n ealer #er!orm main un"tion$

A: se"onary mar

FUN>S:

1. *hat is "lose-en mutual !un$Ans: the !un o6er in%estors #ro!essional management

&. What the in%estors in "lose-en !uns must to liquiate their #ositions$

Ans: sell their shares through a bro+er). Com#aring to NA?( the o6ering #ri"e o! o#en-en !uns :Ans: greater than NA?

,. What ma+e the #ri"e o6ering in o#en-en !uns greater than NA?$Ans: be"ause o! the loas an "ommissions

. What Money Mar+et Mutual Funs in%est in$- "ommer"ial #a#er- C>s- Re#ur"hase agreements


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/. What MMMF usually o6er$Ans: "he"+-*riting #ri%ileges

. What are a%antages o! mutual !uns$-


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A: ban+ "annot satis!y its obligation to #ay e#osit n ha%e enough reser%e to

meet reser%e require&/.What hel# #re%ent FI !ailure$ Why$

A: hol large amount o! "a#b'": it "an be use to absorb loss result !orm D outKo*

&.In return on Asse( *hat ha##en$A: return to o*ner o! FI higher *hen amount o! "a# lo*er

&3.What ha##en *hen FI has more rate5sensiti%e D than A$A: in"rease in interest rate *ill reu"e FI #rot

&4.What ha##en *hen FI more rate-sensiti%e A than D$A: in"rease interest rate lea to in"rease FI #rot

)5.What e2am#le o! rate-sensiti%e A$A: - se"urity *ith maturity less 1yr- ?ariable-rate mortgage

)1.What not e2am#le rate-sen A$A: 2e-rate mortgage

FL RIS=

1. E2am#le o! !oreign e2"hange$- E2 o! "laim enominate another "ur- E2 o! ban+ e#osit- E2 o! "ash issue by !or."entral ban+

&. What ?ietnam rm !a%or borro*$ WhyA: borro* !rom !or.mar b'" less e2#ensi%e

). Who are usual su##liers o! Euro$- Us e2#orters- Us !or.in%estor remit #rot- Euro#ean ire"t in%estor

,. What sher e6e"t theory about$A: i6erent in nominal interest rate eliminate in e2"hange rate

. What ha##en *hen inKation in ?ietnam go u# relati%e other "ountries$A: #ri"e o! ?N> !all

IN@ERES@ RA@E RIS=

1. What ha##en *hen bon sell at #remium 8#ri"e higher than !a"e %alue9A: mar+et interest rate belo* "ou#on rate

&. What ha##en *hen bon #ri"e in"rease$A: yiel to maturity e"rease

). What is interest rate ris+$A: ris+ asso"iate "hange in return *ith "hange in interest rate

,. What is systemi" ris+$A: ris+ ue to !ailure o! entire ban+ system

. What is the sha#e o! yiel "ur%e$A: u#*ar slo#ing

>URA@I


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A: a "om#lement to basi" ga# ana a""ount !or e6e"t o! interest rate "hange

on mar+et %alue&. What is basi" ga# ana$

A: measure sensiti%ity ban+ #rot to "hange in interest rate by multi#ly ga#

time the "hange in interest rate). What is maturity bu"+et a##roa"h to ga# ana$

A: measure sensi o! ban+ #rot to "hange in IR by L ga# !or se%eral maturity

subinter%al by "hange in IR,. What is #roblem in uration ga# ana$

A: "al"ulate assum that yiel "ur%e is Kat. What #rob in basi" ga# ana$

A: "al assume IR all maturities "hange by equal amt/. What ban+ manager oes to ma+e IR rise *hen ban+ has #ositi%e ga#$

A: in"re rate-sen A n e"re rate-sen D. What ban+ mana o to ma+e IR !all *hen ban+ has #os ga#$

A: e"re rate5sen A n in"rease rate-sen D3. What ha##en in absen"e o! regulation$

A: ban+ *oul hol too little "a#4. What shoul o to eliminate bon'loan #ri"e "hange$A: use maoie uration using M"aulay >uration Lyiel "hange relationshi#

15.What is ?aR$A: #otential *orst "ase loss at s#e"i" "onen"e le%el o%er "ertain #erio o!

time

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FIMana Questions