Question

13) Before the 2008 financial crisis, the state of many U.S. banks included [I] Decline in loan denial rates [II] Decline in the loan-to-income ratio [III] Low capital adequacy ratio [IV] Abundance of subprime mortgages [V] Decline in bank net interest margin

A. I, II, III

B. III, IV, V only

C. I, III, IV, V

D. All are true

14) Which of the following is generally TRUE in the few years (pre-crisis period) before the 2008 financial crisis? [I] Implied volatility, a measure of market risk, fell [II] TED spread, a measure of short-term credit risk premium, rose steadily [III] Long-term credit risk premium, measured by the spread between the yield on bonds rated Baa and yield on T-bond, was generally stable until the mortgage crisis

A. I and II only

B. I, II, III

C. I and III only

17) Which of the following market crashes did not lead to a financial crisis?

A. Monday, September 29, 2008, when the dow fell 7%

B. Black Monday, October 29, 1929, when the Dow fell by 13%

C. Black Monday, October 19, 1987, when the Dow fell by about 23%

D. All of the above