Section A (1 Mark)
Select the correct statement regarding the market portfolio. It:

Section B (2 Mark)
A financial institution plans to issue a group of bonds backed by a pool of automobile loans. However, they fear that the default rate on the automobile loans will rise well above 4 percent of the portfolio - the projected default rate. The financial institution wants to lower the interest payments if the loan default rate rises too high. Which type of credit derivative contract would you most recommend for this situation?

Section A (1 Mark)
Which ONE of the following in not the requirement for managing customer?

Section A (1 Mark)
__________ is a tangible company asset that can (and should) be inventoried and managed.

Section B (2 Mark)
Last year, Owen Technologies reported negative net cash flow and negative free cash flow. However, its cash on the balance sheet increased. Which of the following could explain these changes in its cash position?