1. Commercial paper ______.. E8 z4 W9 z& ^+ X; x. ?
A. is issued mainly by commercial banks9 f1 l: r3 r5 e) u6 L" I
B.can be either short or long-term debt8 n5 a5 A* c7 s& d; F5 N
C. is most typically issued in very short maturities, such as one or two months
- c" I% e b0 j \& x7 S D. ought to be considered a capital market instrument
- M$ Y) ^' E" ?2 Z+ ~) S 2. The expectations hypothesis assumes that investors regard bonds of different maturities .
B, n; C" i2 l/ ]& ^# M A. as perfect substitutes
9 {4 u1 N. ^; r3 k' A, q B. as not substitutes at all) G, h# b( m' e; V2 L& p
C. as substitutes, but not perfect substitutes/ ?* b0 F. W5 X8 r
D. none of the above& |( J \; ~1 X" G# w. ~
3. If the yield on Treasury bills falls from 5.27% to 5.22%, then the yield will decrease by ______ basis points.) W' |: T: v+ E# h9 t6 T$ M
A. 0.05
) V- C8 j6 ]6 H4 Z4 e0 A8 { B. 0.5
" B+ W. Z2 r4 x$ j5 o3 w: R" J& b C. 5
- q" h% z I' G, f7 r& A& b: @ D. 505 V4 V/ i' P1 _
4. Liquidity of a business is measured by ______.6 \3 N% R8 ?+ W% [, u, `
A. the rate of return on owner equity0 L, F' u7 d/ e/ f2 N2 Y& A
B. the ratio of total revenue to total expenses incurred8 R7 s0 C$ J! W& q
C. the ratio of current assets to current liabilities7 s6 a0 D% K$ O M- a( S, t; J
D. the ratio of income to costs+ ~- s, C6 W2 r% {) P
5. Which of the following is an example of an automatic stabilizer? ______.
( g- ]6 _( T/ ^2 a A. A change in interest rates' f Y- C$ O8 f8 o I
B. An increase in government spending7 D* T; T0 G( d0 @) j# h
C. Lowering income taxes* ]" z8 z- }) D: }' F
D. Unemployment insurance x9 ^7 c3 o. x; _ h
6. Which of the following definitions fits depreciation? .+ ?6 y- W! l- n. s6 s4 _; d8 a$ J/ G
A. Allocation of the asset's market value to expense over its useful life
: F/ g6 m/ B! J, u) A; u1 e+ K B. Allocation of the asset's cost to expense over its useful life) l+ w- X4 V5 F8 M
C. Decreases in the asset's market value over its useful life
7 |# u" t7 `* s$ @" c D. Increases in the fund set aside to replace the asset when it is worn out
+ {- {4 u D" R4 i' M: k% z# p 7. In the balance of payments accounts, ______ are unilateral transfers.- o% o6 m% Y6 N" }' @: d! E+ B
A. direct investments in another nation's businesses
/ V J/ m. T W) E B. international transactions in securities with maturities greater than one year& A- W( m& j& r Q8 _, C
C. international transactions of securities with maturities of less than one year; |5 n* V& r0 U. ~
D. gifts and grants
# r e& Z1 G3 k0 c 8. A self-employed person who wishes to make provisions for retirement and reduce current tax liabilities should invest in .
6 r% y& B N( H! X) J A. a money market mutual fund
$ U/ ?. y( `# I8 g2 r5 k B. a time deposit V0 N# W# ~ i
C. Keogh Plan- F2 c, O: f3 z
D. a money market deposit account
9 M3 I) C- ^0 J6 [ 9. The central problem in economics is that of______. [9 A, @0 C9 j' o- c3 J0 H: p. ? q
A. comparing the success of command versus market economies
6 P: S0 r5 S* s2 `' } B. guaranteeing that production occurs in the most efficient manner" l( e8 r' u- G# \1 \, z( v
C. guaranteeing a minimum level of income for every citizen# y- _0 W% o8 h& a3 H$ @
D. allocating scarce resources in such a manner that society's unlimited needs or wants are satisfied as well as possible9 b2 v- n8 L' V B) l
10. Which of the following is the most accurate measure of a bond's interest rates? ______.
" P) z( l, h4 h A. Coupon rate
7 m: p* w* O: z" X0 S) E B. Yield to maturity, v1 G! m& ~( }
C. Current yield6 O2 [( o' K+ G% W C: i
D. Discount yield |