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Holding all other factors constant, if a firm increases its current assets relative to total
assets,
a. it increases return and reduces risk.
b. it increases return and increases risk.
c. it reduces return and reduces risk.
d. it reduces return and increases risk.
e. none of above are correct
If we assume that asset X has an expected return of 10 and a variance of 10, then its
coefficient of variation is:
a. 3.162
b. 1.000
c. 0.316
d. none of the above
If a Microsoft January 20 put option with a strike price of $20 was selling for $5.00 and
the market price of the underlying Microsoft stock was $18.00, the price of the put
option would be _______________.
a. in-the-money
b. out-of-the-money
c. fairly priced
d. not enough information to tell
Which one of the following transactions or operations is entirely at the initiative of the
Federal Reserve?
a. open market operations
b. change in float
c. change in bank borrowings
d. change in Treasury cash holdings
The National Banking Act of 1864:
a. established minimum capital requirements for federally chartered banks
b. regulated loans with respect to safety and liquidity
c. established minimum reserve requirements
d. all of the above
Which of the following are not thrift institutions?
a. credit unions
b. savings and loan institutions
c. commercial banks
d. all the above
Which of the following is not a component of the M1 definition of the money supply?
a. travelers' checks
b. savings and small time deposits at depository institutions
c. currency held by the non-bank public
d. demand deposits at depository institutions
Bank reserves are increased when the Treasury:
a. sells government bonds to individuals
b. doesn't change its holding of cash
c. increases its account at a Federal Reserve bank
d. increases its holding of cash
e. none of the above
Which of the following affects a firm's choice of capital structures?
a. flexibility
b. timing
c. corporate control
d. all of the above
Which of the following statements is most correct?
a. A downward sloping yield curve implies that government securities with long-term
maturities have lower interest rates relative to similar quality securities with short-term
maturities.
b. Commercial paper is a primary source of short-term borrowing used by the U.S.
government.
c. A decline in interest rates for long-term Treasury securities indicates an increase in
investor long-run inflation expectations.
d. The establishment of the Federal Reserve System has caused the yield curve to
always be upward sloping.
It will take approximately 9.6 years for a $100 deposit to result in a future value of
$600 if I can earn 10% on my deposit.
Regulation Z requires that lenders clearly explain consumer credit costs and prohibited
them from charging overly high-priced credit transactions.
Federal regulation of investment banking is administered primarily under the provisions
of the Investment Banking Monitoring and Control Act of 1999.
A factor engages in accounts receivable financing for business by purchasing accounts
outright and assuming all credit risks.
Local governments depend heavily on property taxes for their revenues, while state
governments depend largely on sales taxes and special taxes, such as those on tobacco
products.
