1. The financial statements that are dated for a time period (rather than a specific time) are the .
+ r1 C/ a7 N ?/ C' W A. balance sheet and income statement. G& `9 ?! m) o8 t1 I
B. income statement and statement of cash flows
3 R& T( _' y* R C. balance sheet and statement of owners' equity0 l [: y; f6 G9 q' h2 V3 E
D. all of the above
+ q5 n6 ] i/ u% q f- j 2. Which of the following is an example of off-balance-sheet financing______.& l$ ]' _* r6 W1 `
A. Operating lease
7 t4 J a1 N1 M% x: N B. Debenture bonds5 s% ~3 n7 t9 y/ l+ C9 y# N8 w
C. Current portion of long-term debt
' ^6 A; _9 O0 [1 Y D. Convertible bonds2 `$ B& R0 A$ T0 x) ]
3. Borrowers can gain access to the surplus funds of savers ______.( _ z- m, g6 J6 H; j6 V6 R
A. by issuing securities to savers% U8 J6 e9 z( ~9 ]
B. through financial intermediaries7 m6 S& Y% \9 V: r$ O" t
C. by purchasing securities such as stocks and bonds0 K( }8 U% N) G6 [) a: q, z: X
D. all of the above! o& }- m* b, ~9 t, M8 D
E. both A and B- Q& y5 f3 e' v
4. Which of the following assets are most liquid______.7 k/ t/ E( K$ y% R/ _% i; J0 ]* `
A. High grade corporate bonds
1 e& C7 n: u3 y3 Z B. Time" deposits
# ?8 D4 ~1 O$ g- m. M C. Stocks in General Electric Company( C% {' ~! i- c' d' k6 W$ ~
D. Passbook savings deposits& L+ B' ]. M9 o. M& |
5. Secondary markets for securities .
! z0 Z7 T" N! p3 z4 M A. deal only in bonds) x& Y# Q3 @8 r0 P" d5 s" T& [
B. are markets primarily for the initial sale of new issues
* _' S j* \- v( }4 [7 D! N# V C. are markets for trading in outstanding debts and equity claims3 f0 B3 A% Q. w2 u4 N6 V Y; y
D. are also called "investment banks"+ ^2 g! q5 P: `3 R" z; e
6. The concept of ______ is based on the common-sense notion that a dollar paid to you in the future is less valuable to you than a dollar today.% Z/ G2 ~% ?- Q" O
A. future value4 A, k6 Q' f2 V
B. present value
; y, H; q* h) ]. L C. deflation
$ R! l0 `9 I: F/ A$ g- V D. interest
9 y' I; z" i' D 7. Which of the following would not result in a credit entry in the China's balance of payments.
( f8 P" O n5 b. N7 E; E/ Q A. The sale of a piece of furniture to a business firm in Japan( X! v9 R% d% T, H K
B. Interest and dividends paid on foreign investment in China
) U( p: R5 s7 x7 p C. Interests on a Chinese bank deposit in the United Kingdom. \. Q! i5 Q1 @, Z
D. An increase in foreign investment in China
0 \4 V4 }! }" T, N' s 8. Futures contracts can be ______.
0 g+ s) y5 q6 i- v9 @ A. used as protection against large price swings' C: e: b! E% H, J
B. countered by an offsetting purchase or sale
% Z! I, ~. r9 f! N( U: F, P' H$ G C. participated by hedgers or speculators9 s0 }0 o4 Z; |6 x# W% t& D. S1 f
D. all of the above
# v) @) @( V+ G G; _/ i- v 9. Suppose that you own a business and are considering expanding your productive capital through an increase in investment spending. You will invest only if ______.! X8 @6 L1 O- c$ f7 Q/ Q
A. you are able to obtain the necessary funds at a low nominal interest rate
" H1 f/ v8 i; [+ u; [ B. the investment does not affect your cost of production
1 D# J2 V* _" M7 P0 } C. the present value of future income exceeds the cost of the investment plus interest on any money that you must borrow
c( H( A* X! l) b8 _8 |' S# F D. you observe that your competitors are expanding their productive capital
) h; x0 R7 ~0 H/ S# ~- G. g: k 10. If Y and V are constant, and M doubles, the quantity equation implies that the price level .
3 z: T, I1 r" [/ c A. more than doubles
* A1 M& E( X! O* I7 P0 Q4 _9 ^ B. less than doubles
; M, v/ G7 n2 R4 { C. doubles' w- h$ Z' ?' r; {' C7 y5 x g
D. might do any of the above
7 _0 @# l) G/ d/ Z' D+ ] E. more information is needed
1 i. V0 x: C3 ?/ s6 I' O% x 11. Posting is the process of transferring information from the ______.
# ]% f+ Y' ?' e/ G( M A. journal to the trial balance+ F+ q5 F9 A/ H1 t; o. D, M) R7 }
B. ledger to the financial statements0 o$ _8 B4 K) ?( n6 W0 O
C. ledger to the trial balance
0 c! N% m' g. } D. journal to the ledger
5 W. `/ e9 S `, r3 d3 n Y 12. A long call option is ______.
, K$ ^; F) a& r+ n+ j A. the right to buy the underlying instrument6 }* B o5 p8 t/ Z3 Z; a
B. the right to sell the underlying instrument% t# o3 }9 Q* B. ~( r& r' A* ~' u. Y; ]
C. the obligation to buy the underlying instrument+ v9 W. M7 k. ]
D. the obligation to sell the underlying instrument
5 u" v5 D) E3 \2 w 13. Which of the following $1 000 face-value securities has the highest yield to maturity______.
5 d* \' c! q* Y* L# F$ @# Y A. A 5% coupon bond selling for $1 000) {9 @1 Q6 C6 l9 [
B. A 15% coupon bond selling for $1 000& u3 Z6 f5 r5 X3 r
C. A 10% coupon bond selling for $1 000
" w1 N, P0 d' [+ j D. A 15% coupon bond selling for $900
2 k, U) j( s0 C$ g" _' W# r 14. When the price of a bond is ______ the equilibrium price, there is an excess demand of bonds and the price will ______.5 c: m. b8 G! V, m8 V! S0 Y: Z! \$ f
A. above... rise: a7 s. D; T1 {& @8 }
B. above... fall
& \5 m7 ~/ v& \ C. below...fall1 ]. _& N$ u) k/ R# L
D. below...rise) j8 M. z2 w; p# G% _- w3 U) f
15. Which of the following accounts is not closed______.3 Z5 Z9 H4 k9 |. |1 a
A. Supplies Expense. i' F( W6 z2 W( L- O
B. Prepaid Insurance& p, R0 y/ y- |" Z* n* F
C. Interest Revenue
" Y; z+ j4 S$ B% m3 n D. Dividends7 P2 e* Y1 N- R6 }5 F5 c
16. Which of the following instruments is traded in a capital market______.+ V7 z; l: Q/ G7 C6 t
A. Bankers acceptance; }8 z8 z! c$ o6 X
B. S. Treasury Bill
" r2 d/ j) d$ j8 o C. Eurodollar
0 Q2 K' D% L1 Z: g D. Commercial paper8 C" j' b6 E7 a$ o
E. None of the above
8 m4 k r- \5 ~% _1 o- r# S 17. Which of the following is generally true of all bonds______.( |' @% f. @; a% ?8 K2 X3 @
A. The longer a bond maturity, the lower is the rate of return that occurs as a result of the increase in an interest rate |