assessment 2 -5
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Questions and Answers

  1. Repo interest is computed on

  • A. Discounted interest basis.
  • B. Simple discounted interest basis.
  • C. Add-on interest basis. (correct)
  • D. Compounded interest basis.

  1. Relevant interest on a Repo will be paid by the borrower

  • A. On the discounted basis at the beginning of the Repo.
  • B. At maturity of the Repo. (correct)
  • C. As periodical coupon rate.
  • D. As the capital gains.

Repo maturity will be

  • A. Equal to the Repo lending amount.
  • B. Lower than the Repo lending.
  • C. Higher than the Repo lending value. (correct)

  1. As per the technical definition, which is the borrowing party in a Repo.

<p>D. A dealer of government securities. (D)</p> Signup and view all the answers

  1. Why Repo transaction is recognized as security with very low default risk.

<p>D. It is backed by a government security of which the ownership is transferred to the lender. (D)</p> Signup and view all the answers

  1. Normal shape of a yield curve is

<p>D. Upward sloping (D)</p> Signup and view all the answers

  1. When short term yields are lower than the long term yields in the economy, yield curve will get

<p>A. An upward slope. (A)</p> Signup and view all the answers

  1. In a flat yield curve.

<p>C. Long term yields will be same as the short term yields. (C)</p> Signup and view all the answers

  1. Owners of the corporates will provide,

<p>A. Equity capital. (A)</p> Signup and view all the answers

  1. As a provider of funds to a corporate, which will assume the highest risk,

<p>D. An equity investor. (D)</p> Signup and view all the answers

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