1. Commercial paper ______.
s& x7 n J0 r( d5 ^% L9 \ A. is issued mainly by commercial banks
& ]. m/ n0 I" k7 x- C$ ^ B.can be either short or long-term debt$ w6 p4 N6 Y/ s+ s3 q/ w7 y( S" |
C. is most typically issued in very short maturities, such as one or two months+ K: P: f. M9 ?2 C/ ~& @5 e! i3 y
D. ought to be considered a capital market instrument% k" e+ V- \5 U5 J8 b
2. The expectations hypothesis assumes that investors regard bonds of different maturities .
. T2 N+ F u: i* O7 X A. as perfect substitutes i2 C% P2 l3 z1 K6 X2 x
B. as not substitutes at all. {3 B) t& l6 ]( j% N
C. as substitutes, but not perfect substitutes
; C, {& T6 W. t5 a5 m D. none of the above
4 a b, i, M' v 3. If the yield on Treasury bills falls from 5.27% to 5.22%, then the yield will decrease by ______ basis points.& A- G# V! i% f" |
A. 0.05, [( I# C) l/ ?" A& z' n
B. 0.5
: W F& K: r6 _% p! f3 O3 |) j C. 5; X# C+ D5 Z. B) z$ o
D. 50( d" G" W* X' m0 g! l" \7 k$ O7 ?
4. Liquidity of a business is measured by ______.9 ~& m6 a/ x' p1 v+ l5 [
A. the rate of return on owner equity
2 K! f4 k3 G5 D4 w B. the ratio of total revenue to total expenses incurred- x0 [8 Q1 u3 D$ z6 T. J
C. the ratio of current assets to current liabilities8 v/ Z- A( l- }, v/ L j
D. the ratio of income to costs
. }9 o+ u5 k; E+ x 5. Which of the following is an example of an automatic stabilizer______.
5 N- v4 Q: `: w4 y' p ~ A. A change in interest rates" F3 L$ o( e2 l* M- Z; A) L4 \2 O
B. An increase in government spending) S$ @8 X1 d7 y2 J4 S% [! [
C. Lowering income taxes8 u& [! ^9 l/ [. W; `( g& ~
D. Unemployment insurance; A9 k6 `4 U+ c, q* Y& Q8 [
6. Which of the following definitions fits depreciation.: }9 m h! i2 T! Q3 \3 V4 \! ^
A. Allocation of the asset's market value to expense over its useful life* H$ B2 O' r7 @6 Z# e7 o7 Y
B. Allocation of the asset's cost to expense over its useful life
# u7 \ w5 q; r5 \0 U# l C. Decreases in the asset's market value over its useful life
2 Q( O# O2 g$ Z0 e D. Increases in the fund set aside to replace the asset when it is worn out' c: x/ _1 x8 P) u# K9 f) b
7. In the balance of payments accounts, ______ are unilateral transfers.
2 a4 l5 S7 [$ ? x A. direct investments in another nation's businesses
! W* m7 M3 ~2 a- ]0 P, T B. international transactions in securities with maturities greater than one year
* y$ m, e. s( | C. international transactions of securities with maturities of less than one year
% `7 `* ?0 A7 K- R ~& f. { D. gifts and grants
2 V0 r9 q1 g9 y 8. A self-employed person who wishes to make provisions for retirement and reduce current tax liabilities should invest in .
+ q9 \8 z0 N! J6 V l: X5 E A. a money market mutual fund( S- |) o$ p$ E5 d! }
B. a time deposit
8 D, c6 H3 A7 c# z* Y' t C. Keogh Plan4 V( O5 k# S* z8 [- b. _
D. a money market deposit account
6 ]" z; D, `6 V; ~& J1 w 9. The central problem in economics is that of______.% P2 h% T a( q
A. comparing the success of command versus market economies
& f. e& Z( p2 F1 C6 ~( ? B. guaranteeing that production occurs in the most efficient manner9 J' U1 Y9 t+ G2 L' o$ \
C. guaranteeing a minimum level of income for every citizen
a ]3 x) }/ U" M" d9 e D. allocating scarce resources in such a manner that society's unlimited needs or wants are satisfied as well as possible( ~' C4 {' V: `* \5 \; L
10. Which of the following is the most accurate measure of a bond's interest rates______.+ i+ f m+ h& u6 n
A. Coupon rate& J/ g; A; h- {2 H5 t$ f+ v8 {: ^
B. Yield to maturity# s9 s# F L2 X* ~' v! m
C. Current yield
3 z+ U( r6 W) m4 w/ j D. Discount yield& B1 E9 @! X x- A
11. Which of the following is a determinant of asset demand______.+ ]% T% B4 l0 `: E& v+ z5 \
A. Expected return1 X" j) Q: ^. N" d
B. Risk
$ [: ~2 V' F/ t( P& W6 X; O8 _ C. Liquidity$ p \2 Q! ~5 p$ e, ^
D. All of the above( j& C& ^2 ]' y& ^3 r
12. Which of the following items are reported as a current liability on the balance sheet____.
2 g5 R% _6 H( ?) v- A7 X A. Short-term notes payable0 |/ R' \6 U: F- U# Y! S: V# ^# P
B. Accrued payroll taxes! \* k' H- k8 ]3 D" X, N9 X, w
C. Estimated warranties
% r1 u. Y/ O$ w9 w* L- v: b D. All of the above, w# d4 R9 ^; |# d8 G0 M
13. Which of the following is not true of fiscal policy______.* ~0 h" d* A4 g. O4 v3 V" z
A. Time lags occur with fiscal policy.# b5 |+ g3 \) G$ d
B. Automatic stabilizers help the economy.
7 V) e$ k! e; S9 b9 t1 n3 d T C. "Crowding out" is not a problem of fiscal policy.; D# E3 a Q; @( _$ W4 E1 y
D. None of the above.
$ n: A, P/ X, @ 14. What distinguishes the mortgage markets from other capital markets______.5 h8 W. X3 o9 ?% m) T5 S i* B5 b! `
A. Securities in the mortgage markets are collateralized by real estate3 G: o5 f& Y0 h% \( @
B. The mortgage markets usually involve long-term funds
6 Z4 {: c: S+ Y- m" T" ? E# v/ y C. Borrowers in the mortgage markets include individuals and businesses
% d+ Y$ e% L9 U" Z5 t. E D. All of the above
, e8 c! E4 z: R 15. The process of closing the business, selling the assets, paying the liabilities, and disbursing remaining cash to the owners is called ______.' s5 S2 Z3 C6 z$ X H
A. withdrawal
# i0 C6 Y" ]/ o; e4 _ B. liquidation
( u: d. ~0 H; E5 t" i C. acquisition8 @8 n# X3 g) V2 g" w
D. dissolution4 n6 H. c: n& K/ F$ l1 \
16. When an investor is buying stock as an investment, the value of most direct concern is ." b9 K2 j6 G/ `1 T5 S6 Z2 T
A. par value
* u% V8 \4 N- J' J) e B. liquidation value
1 z: r8 h# a! A1 s! G3 z( ]8 b C. market value' i+ B @& P- w& U. m* H2 M( g
D. book value
) p# p( k5 c2 x \& \ 17. Autonomous transactions are ______.
- `9 t' Y: L9 }% \6 j A. transactions undertaken by governments to enforce a price (exchange rate ) in the foreign exchange market
g1 Q0 _. o. h' }/ K B. transactions that are not undertaken in the pursuit of commercial profit |