1. In general, the more liquid an asset the ______.
[1 ], q' l2 N A. less it is likely to yield
$ a: W( S6 i! b$ ] B. greater its risk of default! c3 A& ?! U: z4 \
C. lower its market price will be
( \- m4 s/ o# ]3 \ D. more it will add to bank profits
5 r% f6 j* p) \7 x/ O 2. The interest rate printed on the face of a bond is called the ______.7 A; M! z# K! f! H( X
A. coupon rate
9 O6 d* c/ W5 K9 N B. prime rate, \% s- F' L3 N$ J9 l
C. printed rate
" p6 e: v& u+ K% j5 k; F D. nominal rate
% w8 J7 ^* |3 v; P 3. A rise in interest rates leads to ______.# c+ r3 J |' k
A. capital gains for bondholders* c7 ~! P0 n/ _5 {5 N: r, {6 U- ^ ^
B. capital losses for bondholders. i6 J, O0 X# J! |
C. income gains for bondholders$ |/ U T* f0 z$ v7 w- M
D. income losses for bondholders
2 R% W% U- V6 c2 Q! a6 i, w; p9 r 4. If the reserve requirement ratio were equal to zero, then ______.& Z; t- r! B8 v: j7 k; d# D
A. the deposit multiplier would be infinitely large
+ Y$ u$ ~0 Q" e; Q% s8 x- \ B. required reserves would be equal to zero
$ M! y; Y5 s% d: y8 m, ?# I I3 U: P$ j C. the banking system would theoretically be able to create an infinitely large amount of demand deposits
7 l% I% ?7 F$ c3 C' `4 J8 i2 m5 E D. all of the above |