Insurance and Risk Management Paper 16

1

A bank’s risk: asset ratio compares its capital with its:






2

A belief that expectations were exogenous could lead one to the view that judgements about the future were likely to be based on:






3

A bond issued in July 1997 will mature in July 2013 for £100. In July 2003, its original maturity and residual maturity would be (respectively):






4

A central bank which sets the short-term rate of interest must:






5

A central bank wishes to indicate that its official interest rate will be 4.5% from tomorrow. What repurchase price should it set for 28 day repo deals in government bonds valued at £1m?






6

A company has just declared a dividend of 8p per share on shares current valued at £1.50. Dividends have been growing steadily at 5 per cent p.a. The dividend yield on these shares is is:






7

A corporate bond paying an annual coupon of £9 matures for £100 on 30 September 2011. What is its price on 1 October 2008 if interest rates are 8.5 per cent?






8

A downward sloping yield curve most likely indicates:






9

A firm announces that its next dividend payment will be 12p per share. The shares are currently priced at £1. The firm’s earnings have recently grown at a rate of 9 per cent per year and this is expected to continue. The total annual return on these shares is:






10

A government sale of treasury bills to the central bank is the nearest thing in a modern economy to:






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