1. In general, the more liquid an asset the ______.8 ?, e. A% V% d8 _+ Q
A. less it is likely to yield
( I' W5 t/ @' ^! Q+ a, T B. greater its risk of default( o; Z/ s) B0 L! Y: O1 k* a# p4 X
C. lower its market price will be5 W: }7 M3 J; _' L7 n
D. more it will add to bank profits
) N. i! D% @1 S7 L' C 2. The interest rate printed on the face of a bond is called the ______.4 S8 Q7 O4 u5 k8 F! t
A. coupon rate0 P& S8 F& }0 i2 ~8 P5 X
B. prime rate
8 L5 q( A6 ?5 a6 j C. printed rate
2 ? D. {! P. g) \1 u1 u! K% `. t D. nominal rate
8 x4 X0 r8 U- w, @$ G. N. u 3. A rise in interest rates leads to ______.% l X; M2 {/ N1 A# O: }
A. capital gains for bondholders
8 G, I* ^" f; ~) O B. capital losses for bondholders! A5 z6 H" m. G3 k% U3 S6 y
C. income gains for bondholders) [4 ?2 q. H; Z8 e N. C* E0 \
D. income losses for bondholders/ {- \6 v5 V* e1 n/ q9 m& Q% g: [! T
4. If the reserve requirement ratio were equal to zero, then ______." R6 G8 Q' P0 f8 j9 z0 P
A. the deposit multiplier would be infinitely large0 {1 [# x$ f& m: t- {
B. required reserves would be equal to zero! k* ]' Q' m O
C. the banking system would theoretically be able to create an infinitely large amount of demand deposits. V* P; ?5 A- N8 @
D. all of the above |