</p>11. The federal funds rate is the interest rate ______.
1 ]( f& I8 V. y. e$ q4 pA. on overnight loans of reserves between banks
% Y: Z* ` C# `* XB. the government pays when borrowing from banks
0 q, w% {! v$ |' yC. on government debt1 y3 M" N6 y. J5 \
D. both A and B5 Y# y$ V4 l& U
12. A consumer's indifference curve shows ______.: z& {+ P0 e! f$ Z5 ?" | [
A. all combinations of two products that a consumer can use/ u3 n9 D6 H2 r1 i8 a) y' L, R, k
B. all combinations of two products that yield the same total satisfaction to the consumer8 z: u, u1 r( D6 I, K4 A# l
C. all combinations of two goods that the consumer can purchase with disposable persona income
5 A2 ^+ a" H" ` yD. equal income for consumption
+ e' D# t4 |) f' A- l13. The value of any investment is found by computing ______.
) ?* V. t; v. L2 a# c3 }: ^A. the future value of all future expenses, `: X! u3 |8 |
B. the future value of all sales
' s; [' i1 q: p( b# kC. the present value of all future liabilities" R: r1 t- B9 o. A( g! i
D. the present value of all cash flows( ]3 ^% f- j @3 }8 k
14. A "base" or "high-powered" money is distinguished from other types of money by the fact that it .
! ?+ u- a- U% o9 |1 X/ r# h: }A. always consists of central-bank liabilities
! c5 f, `" p& W* N0 r; i, L1 u' UB. always consists of assets that can serve as commercial bank cash reserves
8 Y2 n0 z: z9 H3 eC. always consists of gold coin( c8 r2 X$ Z4 S0 ^+ _) D
D. must be a "fiat" money
0 Z1 H$ d% g. Q% g. l1 L15. The relationship between interest rates on various bonds, and the time to (heir maturity is called the ______ structure of interest rates.
$ ?4 t9 \9 v u" m) E; JA. chronological& k4 T/ U w& T: j
B. term
# ?' x# {, t$ `0 Z/ u2 P5 ?0 pC. risk
6 O3 f7 q; t& u- z% n, m' a4 C7 _D. liquidity# M, y, T; Y7 k0 A5 n$ ?
16. An example of an investment pool is ______.+ L7 B1 c$ h+ n6 T. a3 [& e# ^
A. a savings and loan association
+ p ?, \+ I" S7 L; ]3 J: w( GB. a life insurance company
9 Y# c: C) p, X) CC. a finance company* S8 U7 k% l4 V% f
D. a mutual fund
7 t7 L. n n$ ?7 Y9 O8 c17. Sustained downward movements in the business cycle are referred to as ______.6 ]/ @3 ~/ V1 f7 q) m2 l) P
A. recessions3 _/ l1 S- q/ O9 c, |4 E; {! i
B. economic recoveries0 L3 K J& z5 X0 `( g; ?* ~3 P: _
C. inflation
* ~# i) U+ q' t: g# H9 TD. expansions- \& Z- o7 Z6 ~2 r
18. _____ offers a wide spectrum of personal services to wealthy clients who may have little knowledge of how to handle their own financial affairs or who are too busy.5 _4 w ?2 c8 I( ?
A. A private bank
& e* P/ I! {4 V' w bB. Private banking
( q3 b- p. t, G1 o4 yC. Personal banking; ]" l6 R3 }( e; v: _, v
D. Retail banking
/ f7 |( ?9 u5 [1 H7 w- D5 y* s6 I1 s; S7 V; {: d; l
19. Which of the following can be described as involving direct finance? ______.8 R% ^ [5 P# [* w- v, l6 |
A. A pension fund manager buys a short-term corporate security in the secondary market6 ?, [( w+ |! o! t
B. People buy shares in a mutual fund
$ D. B9 x; A" pC. A corporation issues new shares of stock: l2 O* O- C1 a! `2 O
D. An insurance company buys shares of common stock in the over-the-counter markets. 20. A call option gives the owner the right to ______.& @1 Y2 A9 p4 ]) X
A. sell the underlying asset at a fixed price. n0 D) I5 Z; w! T
B. buy the underlying asset at a fixed price" N( D+ v# C: _ u5 H- W% }# H5 r
C. convert the underlying asset at a fixed price7 x' p* u0 v0 K! j
D. take delivery of the underlying asset at a fixed price |