Last Updated: Jul 12, 2026
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1. TMFI's internal procedures and management were
A) absolutely unaware of their uninsured liabilities
B) aware that they had some uninsured liabilities but thought they had enough capital to withstand any uninsured losses
C) None of the above
D) fully aware of the uninsured risks Fortress Re were taking
2. The financial intermediary services provided by Fannie Mae and Freddie Mac were designed to
A) Buy mortgage-backed loans for banks and keep them all on their books, using them as collateral for the US government to borrow
B) Repackage mortgage loans made by banks and sell them on to investors as asset backed securities
C) Compete directly with banks in selling mortgaged to would-be home owners
D) Offer loans directly to the consumer
3. When Fannie Mae and Freddie Mac were taken under US government conservatorship, which of the following was not included within their operating mandate?
A) The US government will buy mortgage-backed securities in the open market as needed
B) Fannie Mae and Freddie Mac will continue to buy home loans from banks to repackage them as mortgage-backed securities
C) There was a 2 year limit to the conservatorship
D) The US government will provide capital as needed in return for preferred shares in the companies
4. Which of the following was NOT a factor in the WorldCom collapse?
A) Failed corporate governance
B) Accounting abuses
C) Unfair pricing to customers
D) Over stating actual sales
5. According to the Group of 30 Report, dealers and end-users are encouraged to:
A) Use a common trading agreement for interest rate and equity derivatives but a separate agreement for foreign exchange transactions.
B) Use separate trading agreements for interest rate derivatives, equity derivatives and foreign exchange transactions.
C) Use a single master trading agreement as widely as possible with each counter party.
D) Use one trading agreement for foreign exchange forwards and another for foreign exchange options.
Solutions:
| Question # 1 Answer: A | Question # 2 Answer: B | Question # 3 Answer: C | Question # 4 Answer: C | Question # 5 Answer: C |
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