1)
Firms and individuals use the money markets primarily to
warehouse funds for short
periods of time until a more important need or a more productive
use for the funds arises.
Answer:
2)
Several academic research studies show that investors earn higher
returns by investing in mutual funds that charge higher fees.
Answer:
3)
Deciding on how good a risk you is entirely scientific, based on
your credit score.
Answer:
4)
In the ECB, the Governing Council has the right to vote, and this
right is taken very seriously, with all important matters decided
by a majority vote.
Answer:
5)
When the real interest rate is high, there are greater incentives
to borrow and fewer incentives to lend.
Answer:
6)
Net worth is the difference between a firm’s assets and its
liabilities.
Answer:
7)
The share of the mortgage market held by commercial banks is
approximately
A) 50 percent.
B) 30 percent.
C) 15 percent.
D) 5 percent.
Answer:
8)
First National Bank
Table 23.1
Referring to Table 23.1, First National Bank has a gap of
________.
A) -30
B) +30
C) 60
D) 0
Answer:
9)
The usual maturity range for fed funds is ________.
A) 1 to 270 days
B) 1 to 15 days
C) 4, 13, and 26 weeks
D) 1 to 7 days
Answer:
10)
A bond rating of Aa or AA would mean that the quality of the bond
is
A) the highest.
B) high.
C) medium grade.
D) speculative.
Answer:
11)
The usual maturity range for commercial paper is ________.
A) 1 to 270 days
B) 1 to 15 days
C) 4, 13, and 26 weeks
D) 1 to 7 days
Answer:
12)
Asymmetric information can lead to the widespread collapse of
financial intermediaries, referred as financial ________.
A) panic
B) bubble
C) asset
D) transaction
