I selected the same one,...but this was not a chapter that I had not gone through,....and I was just able to make a very shallow inference that MBS 2 which came with a longer maturity should have a higher yield and a larger difference to atleast a benchmark of treasury rates.
I did similar mistake on atleast 3 questions..
On your second question
MBS - Interest Rate Risk (is correct)
I don't think that a Certificate of Deposit poses liquidity risk to a bank and selected the other option. COD's come with fixed maturities allowing banks to plan their liquidity more effectively. I think it was the other option & I don't remember the name of the instrument
I remember : MBS and check too
CD is not free from interest rate risks..
The question was which instruments pose highest interest rate & liquidity risk.
I choose Big lost too .Fwiw bid price is less then ask price. So when rm goes for mid price then it will increase the amount which they have to pay as they are on the paying side of credit protection "already paid 20,000" . So it will post losses for then, but don't understand about logic of regulators showing up there as using bid-ask mid price is okay with them. I think they might be posting big amount of losses
Correct...i think i am wrong but i selected MBS and Cd
I think just 1 pension fund question..vhr i selected that answer was SAr will fall with fall in i.
There was one question on factors that need to be considered while looking at quantile standard errors - I selected asymmetric confidence intervals
They give the formula :
z = (x - pt) / SQRT(p*(1-p)T)
so x = z * SQRT(p*(1-p)T) + pT
x = 1,96 * SQRT(0,99*0,01*2500) + 2500*1%
x = 1,96 * 4,97 + 25 = 35
The trick was 99% VaR one tailed but 95% confident two tailed so z=1,96...
I first made the computation with 2,33 and 1,65 but luckily no answer matched.
even i selected asymetric confidence interval..
