PE Exam Questions and Verified Answers, 100% Score Guarantee Pass (Latest 2025) What is the difference between a treasury bond & note? - Correct Answers ✅A note is less than 10 years- a bond is more than 10 years Name the 5 prohibited investments in 703.16 - Correct Answers ✅Mortgage Servicing Rights, Stripped Mortgage Backs (SMBS), Residual interests in CMOs, Real Estate Mortgage Investment Conduits (REMICs), Derivatives, or Small business related securities What is the definition of convexity? - Correct Answers ✅A measure of the curvature of the relationship between the change in bond price and the change in interest rates.What is the definition of duration? - Correct Answers ✅A measure of the sensitivity of an instrument's price to changes in yields. It is calculated as a present value-weighted time to maturity of the cash flows from an instrument.Within 90 days of a "critically undercapitalized" classification- what must the NCUA Board do? - Correct Answers ✅Conserve, Liquidate, or document reasoning for failing to do so. 1 / 2
PE Exam Questions and Verified Answers, 100% Score Guarantee Pass (Latest 2025) On a critically underclassified CU- how many days until mandatory liquidation? - Correct Answers ✅180 days; however, board can veto if substantially compliant with NWRP, NI is in an upward trend and BOD feels they will be viable.What are the mandatory actions on credit unions designated undercapitalized and below? - Correct Answers ✅1) Quarterly Transfers
2) NWRP
3) Limited Asset Growth 4) No additional MBLS What is the definition of a "new CU"? - Correct Answers ✅Less than 10 years old and less than $10MM in assets Can a FCU purchase a CCC rated municipal bond? - Correct Answers ✅No- Can only purchase if a nationally-recognized statistical rating organization has rated it in one of the four highest rating categories.What criteria must be met when purchasing a commercial related mortgage security (CRMS)? - Correct Answers ✅1.Must be rated in one of the 2 highest ratings.
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