Which of the following is NOT true?       swaps (CDS) and collateralized debt obligations (CDO), later identified as two instruments that played a major role in the market failure of 2008.       The Dodd Frank Act bans risky proprietary trading activities       Under the Dodd Frank Act, a large financial institution can hold lower capital reserves because it has better reputation than a small financial institution.       Under the Dodd Frank Act, a central bank will not tolerate TBTF and will fail large banks in a future crisis.       The Dodd Frank Act  provides finance customers protection.

It is said of Gary Cohn, former chair of Goldman Sachs and advisor to the Trump presidency, that while “[p]inning blame for the world’s financial crisis of 2008 on one man or one bank would not be fair, . . . Gary Cohn and his entourage at Goldman Sachs is a good place to start.”  At Goldman Sachs, Cohn aggressively promoted subprime mortgages and other dubious financial instruments.  Knowing that these financial instruments were likely to fail, he and his cronies walked away with hundreds of millions of dollars in bonus money and stock options. His behavior cost his company billions and the world economy trillions of dollars in value, and earned him a place in Donald Trump's inner circle. Of course, Cohn was only one of many crooks to walk away rich from the financial crisis of 2008.questions:  1. Why was Cohn able to operate his fraud for so long?  Why did people continue to trust him with their money right up until his frauds were exposed? 2. What happens to financial markets where…

“Inside the company fixed income managers bought bonds but they did not keep them for very long at all. Instead, they were constantly buying, exchanging and selling the bonds in their portfolios” Explain why the behavior described in the above quote may happen in terms of interest-rate risk immunization and downgrade risk. Do not discuss speculation or arbitrage as causes of this behavior as these will not gain any credit in this examination.

Which of the following statements is NOT true? A. Debt contracts tend to impose more restrictions on the actions of the borrower than the lender   B. Larger corporations have easier access to the securities market   C. The financial sector is one of the least regulated industries in the US economy   D. Collateral is used to secure debt contracts