ABA CTFA Practice Test - Questions Answers, Page 90
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In a yield-maintenance agreement:
A.
the securities repurchased may have a different stated interest rate from that of the securities sold and are generally priced to result in substantially the same yield.
B.
the securities repurchased may have the same stated interest rate from that of the securities sold and are generally priced to result in substantially the same yield.
C.
the securities repurchased may have a different stated interest rate from that of the securities sold and are generally priced to result in substantially the different yield.
D.
the securities repurchased may have a same stated interest rate from that of the securities sold and are generally priced to result in substantially the different yield.
What limits the repurchase price to a stipulated percentage of the face amount of the certificate?
A.
Price-cap provision
B.
Investment provision
C.
Limit provision
D.
Par cap provision
____________ agreements may contain par cap provisions that could significantly alter the economics of the transactions.
A.
Yield-maintenance
B.
Price-cap
C.
Fixed-coupon
D.
Accounting
In what, securities involve in repos are not delivered on the settlement date of the agreement and the contract may be extended upon mutual agreement of the buyer-lender and sellerborrower.
A.
Financial servicing
B.
Price-cap
C.
Rollover
D.
Purchasing agreements
When securities repurchased under repos commonly have a principal amount that differs from principal amount of the security originally sold under the agreement, is known as:
A.
Splintering act
B.
Breakage
C.
Rollover
D.
None of the above
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