1. Collateralised debt obligations

A. Can be created by placing existing pass-through in a trust off the balance sheet.

B. Can be created either by packaging and securitising whole mortgage loans and by placing existing pass-through in a trust off the balance sheet.

C. Can be created either by packaging and securitising whole mortgage loans.

D. Can be created either by packaging and securitising unsecured loans, or by placing existing pass-through in a trust on-balance sheet.

2. An action by one party that has an adverse effect on some third party who is not part of the original transaction is called.

A. Financial crisis

B. Unsystematic risk

C. System failure

D. None of the other listed options is correct

E. Bank run

F. Third party contract failure

3. Financial intermediation exists because of financial market imperfections, if financial markets operated perfectly and without costs, there will be no need for financial intermediaries?

Select one:

True

False