Equipment Trust Certificates Overview
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Questions and Answers

What is the purpose of a Certificate of Assignment?

  • Act as a government security
  • Facilitate investment contracts
  • Provide legal clarity regarding property rights and assignments (correct)
  • Grant preferred stock ownership
  • What type of debt instrument allows a company to use an asset while paying for it over time?

  • Asset-backed security
  • Preferred stock
  • Equipment trust certificate (correct)
  • Collateralized debt obligation
  • How are payments received from the lessee distributed in the case of an Equipment Trust Certificate?

  • Invested in preferred stock
  • Retained by the trust
  • Returned to the lessee
  • Distributed among investors or certificate holders (correct)
  • What is a Repurchase Agreement (repo) mainly involved with in financial transactions?

    <p>Government securities trading</p> Signup and view all the answers

    In what context can Certificate of Assignments apply, according to the text?

    <p>Village land assignments, real estate transactions, and legal agreements</p> Signup and view all the answers

    Which document includes a legal description of the property assigned and the designated successor to the assignee?

    <p>Certificate of Assignment</p> Signup and view all the answers

    What financial instrument represents the implicit overnight interest rate?

    <p>Repos</p> Signup and view all the answers

    Which type of futures contract obliges the buyer to purchase an underlying commodity at a predetermined future price and date?

    <p>Commodity futures contract</p> Signup and view all the answers

    Which type of stock options allow the original holder to transfer them to others under certain conditions and restrictions?

    <p>Transferable stock options</p> Signup and view all the answers

    What financial instrument can be used to hedge an investment position in an underlying asset?

    <p>Commodity futures contracts</p> Signup and view all the answers

    What is the name used for commodity futures contracts based on their expiration month?

    <p>Commodity futures contracts</p> Signup and view all the answers

    Which financial instrument is commonly used by dealers in central bank open market operations?

    <p>Repos</p> Signup and view all the answers

    What type of financial assets can secure a collateral trust bond?

    <p>Shares of stock</p> Signup and view all the answers

    In the case of a collateral trust bond, what happens if the value of the collateral falls below the minimum required?

    <p>Additional securities or cash are required as collateral</p> Signup and view all the answers

    What is the role of a trustee in collateral trust certificates?

    <p>To hold and manage collateral assets for bond holders</p> Signup and view all the answers

    What is the purpose of a voting trust certificate?

    <p>To provide voting control to a limited-life trust</p> Signup and view all the answers

    What is the primary goal of issuing a collateral trust certificate?

    <p>To raise capital during preincorporation phase</p> Signup and view all the answers

    What distinguishes a voting trust certificate holder from a regular shareholder?

    <p>*Voting rights</p> Signup and view all the answers

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