1. The financial statements that are dated for a time period (rather than a specific time) are the .
h: M X' I$ B% e A. balance sheet and income statement; Z2 R5 M* A" R1 o
B. income statement and statement of cash flows
+ J. T- V4 s+ o% [9 A# E. H C. balance sheet and statement of owners' equity
- c0 R- D. S. b7 v5 ^( i7 B D. all of the above
, |8 d/ `/ D, ]* M 2. Which of the following is an example of off-balance-sheet financing______.% x4 K; \" `7 Y. n* a( c' |" N# U+ s
A. Operating lease, }8 a7 O) q$ z# a/ J; t
B. Debenture bonds
' K* B+ v+ ^6 o C. Current portion of long-term debt
! z9 Q8 g% @& j9 L8 B D. Convertible bonds
) Q2 Y7 W2 J, Y 3. Borrowers can gain access to the surplus funds of savers ______.
# |/ r2 g5 G9 k3 ~) {( m A. by issuing securities to savers
/ q) f/ O. P: ]' o B. through financial intermediaries f5 m! ?% B& b: f/ m
C. by purchasing securities such as stocks and bonds
5 z7 H1 B3 L3 h. d8 C2 p1 M D. all of the above
2 _/ `% ?: n3 I8 O' X, m) e E. both A and B/ R- I( t% s K5 C: F' u
4. Which of the following assets are most liquid______.1 R B) {# i5 Q+ Q
A. High grade corporate bonds5 A9 J( h- Q. ?( y/ F0 i; h1 W( w
B. Time" deposits h% C5 Y! G/ y% f) L
C. Stocks in General Electric Company
$ h, j7 b6 i: A9 o1 a$ ~ D. Passbook savings deposits0 }0 T9 p* }3 Z. g) [
5. Secondary markets for securities .
2 k& l9 m& P% l5 ~" i6 I1 [ A. deal only in bonds( ~& I9 c8 d7 O1 [2 v( j: X% g
B. are markets primarily for the initial sale of new issues# T* P* w$ s( m; a: |; T$ _( E
C. are markets for trading in outstanding debts and equity claims+ }2 Y1 @9 x, |- f
D. are also called "investment banks"
) ~- s e, R( v0 v 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.4 ^3 _- V8 B& ^# ~1 P( t
A. future value6 l* r. w7 ?+ G: W
B. present value U" M3 U; X- E4 N; x, S) c
C. deflation: G% d' E4 ], [( B `) [* u
D. interest
0 R1 U" H1 ] B( y" y 7. Which of the following would not result in a credit entry in the China's balance of payments.3 u. e) w' j9 ]
A. The sale of a piece of furniture to a business firm in Japan
4 b# G- @; O% }6 u& f% V" W B. Interest and dividends paid on foreign investment in China
- j) g; ]9 {+ L; ~- E) g C. Interests on a Chinese bank deposit in the United Kingdom
4 c4 c3 q4 c% o3 {( C% i% H1 u D. An increase in foreign investment in China! L t8 A @0 q3 m
8. Futures contracts can be ______.
+ w- [2 V6 M/ o% \+ m: ~ A. used as protection against large price swings5 B' |4 R" t, @( P+ Y0 ?
B. countered by an offsetting purchase or sale
+ g2 g; k2 H( q* h2 r% o C. participated by hedgers or speculators2 v7 _7 O5 j$ G
D. all of the above
2 G+ |( B. l! q8 G 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 ______.$ T+ h7 r4 m& n# V2 M, k( w1 z+ M& F
A. you are able to obtain the necessary funds at a low nominal interest rate
* A# Y h% W, D% D B. the investment does not affect your cost of production
8 G/ a0 _2 z5 r2 k: i, k4 G i C. the present value of future income exceeds the cost of the investment plus interest on any money that you must borrow
4 q3 C2 Z8 ?* g% @4 F( o( K t D. you observe that your competitors are expanding their productive capital% i% ~% z, P, L! d; H7 x
10. If Y and V are constant, and M doubles, the quantity equation implies that the price level .$ g( C3 k. E6 v7 f* l1 q( q
A. more than doubles/ z- Q1 y3 [* f; z3 M
B. less than doubles
+ B- a; V$ M/ c) Z C. doubles1 y" _( J7 G% E: C$ l% [0 X1 K
D. might do any of the above8 n1 v- K2 j) ?/ _
E. more information is needed
9 P" \+ ] ~1 O8 i" e5 e! M$ P: W! W 11. Posting is the process of transferring information from the ______.
$ |" K2 d+ t7 [% [/ B A. journal to the trial balance
) l! ^% k4 e3 n B. ledger to the financial statements
% p2 o! P' \% J$ F$ p C. ledger to the trial balance
- ~: y O0 ~+ U2 J D. journal to the ledger- j7 d: u- i: \: Z9 z* w
12. A long call option is ______.
0 \6 u/ n+ e4 [' d6 M9 f A. the right to buy the underlying instrument
" ]; r [1 A$ I8 m5 o5 ^3 Q- k# O! }; I B. the right to sell the underlying instrument! X' Y3 Y$ ]0 o1 ]
C. the obligation to buy the underlying instrument
- B6 l8 s8 m' x/ Y D. the obligation to sell the underlying instrument$ F1 H, n5 k, `; @8 O
13. Which of the following $1 000 face-value securities has the highest yield to maturity______.% j+ z" i; N0 Q
A. A 5% coupon bond selling for $1 000
- ?" c' q2 [3 S9 r" ]9 x/ i6 v, K B. A 15% coupon bond selling for $1 000
1 t$ @ ?9 \" F% Z% }( z+ _ C. A 10% coupon bond selling for $1 000
0 M/ ]% I' M: o; l& o. t D. A 15% coupon bond selling for $900: v! ]- E1 N3 w8 S. _" ?- k" o
14. When the price of a bond is ______ the equilibrium price, there is an excess demand of bonds and the price will ______.; F$ y _* A" n; D: m
A. above... rise; i) E3 Z8 X* F8 U, j; {1 Z
B. above... fall V- i! K9 d: r8 M1 H% c
C. below...fall9 E+ f9 s! k9 p' K. A
D. below...rise
; I# X- q, P( ^1 g$ p- c! K 15. Which of the following accounts is not closed______.
3 J: K4 s7 m4 U" x: P. A' E A. Supplies Expense
7 t! Y1 G' G# | B. Prepaid Insurance; O5 D, o/ ?0 o* S; s4 _0 v
C. Interest Revenue0 B& o3 r8 D7 c# ]1 N; o K! h
D. Dividends# E- F0 j2 T$ H, z& d
16. Which of the following instruments is traded in a capital market______.! k/ F" o+ ?" \4 i0 i
A. Bankers acceptance
5 M7 N/ _. {3 i/ d6 }' B B. S. Treasury Bill7 n$ r3 P0 u- b7 q' Z1 w
C. Eurodollar
! \( k' y f$ a( x1 } D. Commercial paper! m7 t/ w' @1 k6 j) T' O, j
E. None of the above# u: |& r+ M6 k, v
17. Which of the following is generally true of all bonds______./ b Q6 L; ?$ s5 v
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 |