Financial Risk Manager Part 2
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A manager in the treasury department of a bank is presenting to a group of newly hired treasury analysts about the activities of dealer banks. During the presentation, the manager compares the major lines of business in which the dealer banks operate and explains the risks the dealer banks face in each line of business. Which of the following would be a correct statement for the manager to make?
A
Dealer banks often engage in the intermediation of large equity block trades and trades in municipal and corporate bonds.
B
Dealer banks fund their own trading positions through repurchase agreements but typically refrain from providing repo financing to fund investors' purchases of securities.
C
Dealer banks usually prefer to support external hedge fund counterparties above internally managed hedge funds during times of financial stress.
D
Dealer banks are prohibited by regulators from operating asset-management activities for institutional and wealthy clients.