Á·Ï° £ºTrueorFalseQuestions[1]
¡¡¡¡II. True or False Questions¡¡¡¡1. The velocity of money is determined by the central bank.
¡¡¡¡TrueFalse
¡¡¡¡2. A multiple increase in GNP could result from an initial increase in the stock of money.
¡¡¡¡TrueFalse
¡¡¡¡3. It is primarily the central bank that determines the size and the structure of Ml, that is, how much of that total will be in demand deposits and how much in currency.
¡¡¡¡TrueFalse
¡¡¡¡4. Money may be tight if the money supply grows at a faster rate than the demand for money.
¡¡¡¡TrueFalse
¡¡¡¡5. Inflation is defined as an increase in the general level of prices for goods and services.
¡¡¡¡TrueFalse
¡¡¡¡6. A provision for loan loss results in less net income for a bank on a bank's income statement.
¡¡¡¡TrueFalse
¡¡¡¡7. One of the important factors leading to the growth of financial intermediaries has been the decreased cost of information and analysis of direct securities.
¡¡¡¡TrueFalse
¡¡¡¡8. Financial intermediaries are financial institutions that issue claims against themselves and use the proceeds to acquire financial claims against others.
¡¡¡¡TrueFalse
¡¡¡¡9. Unlike commercial banks, other depository financial intermediaries do not have to be much concerned with excess withdrawals of their deposits since they do not have to pay on demand by a depositor.
¡¡¡¡TrueFalse
¡¡¡¡10. An example of a non-depository financial intermediary is an insurance company
¡¡¡¡TrueFalse
¡¡¡¡11. Bond market prices and interest rates are directly related.
¡¡¡¡TrueFalse
¡¡¡¡12. In its open market operations, the Federal Reserve deals exclusively with commercial banks.
¡¡¡¡TrueFalse
¡¡¡¡13. Investors of bonds are quite clear about the exact amount of cash they will get back, provided they hold these securities until maturity.
¡¡¡¡TrueFalse
¡¡¡¡14. The stock price of a company is its value.
¡¡¡¡TrueFalse
¡¡¡¡15. Buying a mutual fund based solely on its past performance is a good strategy.
¡¡¡¡TrueFalse
¡¡¡¡16. Return of an investment takes two forms: income and capital gain.
¡¡¡¡TrueFalse
¡¡¡¡17. Corporate bonds that include a call provision can be exchanged into common stocks of the company that has issued them. This exchange is made at a predetermined price.
¡¡¡¡TrueFalse
¡¡¡¡18. The return stockholders will receive on their investment will depend on future dividend payments and expected stock price appreciation. Their investment is risky, because future cash dividends are variable and capital gains are uncertain.
¡¡¡¡TrueFalse
¡¡¡¡19. Common stockholders get a fixed dividend and they are entitled to it before preferred stockholders receive any dividend.
¡¡¡¡TrueFalse
¡¡¡¡20. Revenue bonds are usually of higher quality than general obligation bonds, because they are issued to finance specific projects and are fully backed by the income these projects will generate in the future.
¡¡¡¡TrueFalse
¡¡¡¡21. Financial innovation refers to the process that gives birth to new financial institutions, markets,and products.
¡¡¡¡TrueFalse
¡¡¡¡22. An important distinction between "direct" and "indirect" securities is that the former are issued by financial intermediaries while the latter are not.
¡¡¡¡TrueFalse
¡¡¡¡23. Inflation generally favors creditors at the expense of debtors.
¡¡¡¡TrueFalse
¡¡¡¡24. An asset that is readily convertible into cash is thereby highly liquid.
¡¡¡¡TrueFalse
¡¡¡¡25. If a bond is capitalized over a period greater than one year (one period), it involves the calculation of compound interest.
¡¡¡¡TrueFalse
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