On average, bank liabilities tend to have shorter maturities and greater liquidity than
bank assets.
The monetary base is the amount of coin and currency in circulation plus reserves.
Both retail and wholesale CDs are negotiable instruments despite their different
denominations.
Corporate security issuers are always directly involved in funds transfers in the
secondary market.
If you think that interest rates are likely to rise substantially over the next several years,
you might sell a T-bond futures contract or buy an interest rate cap to take advantage of
your expectations.
Banks generally pay higher interest rates on NOW accounts than on MMDAs.
Writing a put option results in a potentially limited gain and a potentially unlimited loss.
A beneficiary designation enables the shareholder to name one or more beneficiaries so
that at the shareholder€s death the proceeds go to the beneficiaries after going through
probate.
True
False
A clearinghouse backs the buyer’s and seller’s position in a forward contract.
Closed-end mutual fund shares are actively traded like common stocks and bonds,
primarily on the New York Stock Exchange.
True
False
What percentage of people age 65-69 are still working.
a.10
b.30
c.50
d.70
You can save on fees for a checking account by having your paycheck directly
deposited into your account electronically by your employer.
a.True
b.False
You are 33-years old and have children ages 3, 6 and 8. You have determined that you
need an additional $700,000 in additional life insurance. You should buy.
a. one $700,000 5-year, guaranteed renewable term life policy.
b. one $700,000 cash-value life insurance policy with guaranteed insurability.
c. 3-5, 5-year, guaranteed renewable term life policies in various amounts adding up to
$700,000.
d. realize that you cannot afford such coverage and simply start saving more in case you
die before your children are independent.
A higher level of which of the following variables would make a put option on common
stock more valuable, ceteris paribus?
I. Stock price
II. Stock price volatility
III. Interest rates
IV. Exercise price
A.II only
B.II and IV only
C.I, II, and III only
D.I, III, and IV only
E.I, II, III, and IV
Plains National Bank has interest income of $250 million and interest expense of $110
million, noninterest income of $40 million and noninterest expense of $65 million on
earning assets of $3,900 million. What is Plains’ overhead efficiency ratio?
A.61.54 percent
B.44.00 percent
C.9.23 percent
D.42.45 percent
E.37.46 percent
The ___________ the coupon and the ______________ the maturity; the __________
the duration of a bond, ceteris paribus.
A.larger; longer; longer
B.larger; longer; shorter
C.smaller; shorter; longer
D.smaller; shorter; shorter
E.None of the options presented
Providing written receipts are not required when using an ATM or a POS terminal.
a.True
b.False
Andrew and Maureen paid the following housing expenses during the year:
Mortgage interest$7,000
Mortgage principal$600
Property taxes$2,000
Homeowner’s insurance$600
Maintenance$850
Utilities$1,900
What is the total dollar amount of the housing expenses that can be deducted on their
taxes?
a.$950
b.$10,200
c.$9,600
d.$9,000
The United States spends a higher percentage of its gross domestic product than any
other country.
a.True
b.False
Marc is a university student seeking a degree in international business. He has received
a scholarship for $6,000. This income was used as follows:
How much of the $6,000 is included in gross income?
a.$6,000
b.$2,400
c.$3,600
d.$0
Sellers expect consumers to negotiate the price for autos and some other major
purchases we make.
a.True
b.False
Standard revenue bonds are
A.backed by the full taxing authority of the municipality.
B.collateralized by the earnings from a specific project.
C.bonds backed by mortgages.
D.backed by the U.S. Treasury.
E.always offered with a best efforts offering.
The highest marginal tax rate is currently 50 percent.
a.True
b.False
The average length of a bull market is ____ months, whereas the average length of a
bear market is ____ months.
a.10; 25
b.25; 10
c.14; 33
d.55; 9
Which of the following statements regarding U.S. savings bonds is most likely to
provide a hedge against inflation?
a.I-Bond
b.Series EE Bond
c.T-Bill
d.Treasury Note
An investor is committed to purchasing 100 shares of World Port Management stock in
six months. She is worried the stock price will rise significantly over the next six
months. The stock is at $45 and she buys a six-month call with a strike of $50 for $250.
At expiration the stock is at $54. What is the net economic gain or loss on the entire
stock/option portfolio?
A.-$500
B.-$750
C.-$900
D.$400
E.$500
The quoted ask yield on a 14-year $1,000 par T-bond with a 7 percent semiannual
payment coupon and a price quote of 98:15 is
A.7.00 percent.
B.7.18 percent.
C.7.30 percent.
D.3.59 percent.
E.3.63 percent.
What three major ways has the federal government assisted the mortgage markets?
Explain.
What are the major purposes of the foreign exchange markets?
If parents give their son $20,000 for a down payment, what is the most he can pay on a
house with a 15-year mortgage if the interest rate is 5.50 percent?
What is the difference between the expected real interest rate and the real risk-free
interest rate actually earned?