II. True or False Questions) Z* V8 ]! V! ?7 z+ u/ `
26. As a general rule, the shorter the maturity of an asset and the more readily it can be sold, the more liquid is the asset.1 g: x. J9 E; c( r
A.True B.False
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0 D8 K! m# m0 H* Y0 N7 h27. Investors in the capital markets are not subject to any tax on their investments.
: E) U: M; d# W* P1 RA.True B.False
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28. CMO is a security backed by a pool of pass-through rates, structured so that there are several classes of bondholders with varying maturities, called tranches.
" r$ Y$ Q3 v8 w1 @4 ^A.True B.False
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29. The purpose of the letter of credit is to facilitate trade, typically international trade by substituting the known credit worthiness of a bank for the buyer, which may be unknown or unacceptable to the seller.0 r0 C/ C( Q% `2 O0 n& m
A.True B.False
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0 u: V4 u8 t) f. e+ k/ E1 W% S# N30. According to the Phillips Curve, the economy cannot be at full employment and stable prices at the same time.
/ x: B# L# V- \" ]7 N, bA.True B.False
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31. When total reserves are equal to required reserves, the banking system cannot extend loans anymore.
: p; s& f3 ~. p0 {A.True B.False 7 [1 ~$ U9 h _ a# E- ~
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32. A bill of lading that covers the shipment of goods on two separate vessels is known as thorough bill of lading.
, C& a' G) Y: ]7 y7 V4 HA.True B.False . a) A, g% Q3 T/ S1 T
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33. Usually the more liquid asset is less risky.
! y5 A/ d) L1 Q6 ^5 ]2 wA.True B.False 0 S& n k: y4 {# ~
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34. Where the bill of exchange is not accompanied by documents, these having been sent to the importer, the transaction is known as a clean collection./ c0 x# ?6 S# u& S
A.True B.False 5 m. @3 F+ P, r' A
1 G) f, h2 e5 R1 r6 J35. The velocity of money is the speed with which it can be converted into a liquid asset.# s: I9 H: e- M# p8 \: q
A.True B.False / n) v2 j# B- K# S& m* p
36. Primitive securities yield returns that depend on additional factors pertaining to the prices of other assets, while a derivative security offers returns based only on the status of the issuer.
' w2 W5 x m$ P( u# X% E* |A.True B.False |