Archives: Quiz

Figure 3-2 The Plasma membrane Which structure is water most likely to pass through? A) 1 B) 2 C) 3 D) 4 E) 8 The plasma membrane of an axon is called the A) axon terminal. B) neurilemma. C) myelin […]

The inherited metabolic disorder that results from the accumulation of phenylketones from phenylalanine is A) ketosis. B) acidosis. C) marasmus. D) phenylketonuria. E) kwashiorkor. Gland cells produce A) mesenchyme. B) antibodies. C) secretions. D) phagocytes. E) fibers. Answer: C When […]

All of the following are true of epidermal ridges except that they A) extend into the hypodermis. B) increase surface area and friction on fingertips. C) cause ridge patterns on the surface of the skin. D) produce patterns that are […]

The full set of genetic information in an individual’s chromosomes is called A) pleiotype. B) allotype. C) phenotype. D) isotype. E) genome. Lymph nodes do all of the following except A) produce antibodies through B cells. B) monitor the contents […]

The shaft of long bones is called the A) epiphysis. B) metaphysis. C) diaphysis. D) paraphysis. E) endophysis. The process of lactation (milk production) depends on both merocrine and ________ secretion by mammary gland epithelial cells. A) epicrine B) eccrine […]

Visceral reflex arcs can bypass CNS neurons in ________ reflexes. A) short B) intermediate C) long D) hyper E) spinal Type 2 diabetes A) can usually be controlled by diet and exercise rather than with medication. B) is associated with […]

Abnormal heart sounds caused by turbulent flow through faulty valves are called A) ectopic foci. B) murmurs. C) asystole. D) fibrillations. E) flutters. The tiny gaps between adjacent Schwann cells are called A) neurillema. B) nodes of Ranvier. C) axolemma. […]

If you buy a call option on Treasury futures at 115, and at expiration the market price is 110, the ________ will ________ exercised. A) call; be B) put; be C) call; not be D) put; not be Risk premiums […]

A central bank that does NOT follow the Taylor principle will fail to raise nominal interest rates by more than the increase in expected inflation. As a result, the monetary policy curve is ________ sloping and the aggregate demand curve […]

Options are contracts that give the purchasers the A) option to buy or sell an underlying asset. B) obligation to buy or sell an underlying asset. C) right to hold an underlying asset. D) right to switch payment streams. A […]

Which of the following policy measures created an Office of Credit Ratings at the SEC with its own staff and the authority to fine credit-rating agencies and to deregister an agency if it produces bad ratings? A) the Dodd-Frank Wall […]

Assume a closed economy with no government. Suppose that autonomous consumption equals $400, planned investment equals $500, and the mpc equals 0.9. Using the information in Situation 20-1, the equilibrium level of aggregate output is A) $900 B) $8,000 C) […]

One of the factors that contributed to the success German policymakers had using a monetary targeting type policy starting in the mid-1970s and continuing through the next two decades was that A) they used a rigid target for the money […]

A contract that requires the investor to sell securities on a future date is called a A) short contract. B) long contract. C) hedge. D) micro hedge. Which of the followings is NOT a current duty of the Board of […]

In the long-run equilibrium A) output is a function of autonomous expenditures. B) inflation is a function of past inflation. C) inflation equals potential output. D) output equals potential output. A person remodeling her house could obtain a loan from […]

________ examines whether one variable has an effect on another by simply looking directly at the relationship between the two variables. A) Reduced-form evidence B) Organizational-model evidence C) Direct-model evidence D) Structural-model evidence Which of the following is an example […]

The life insurance industry’s share of total financial intermediary assets fell from 15.3% at the end of 1970 to 11.5% at the end of 1980 because of A) poor investment returns in the 1970s. B) widespread failures of life insurance […]

Prior to almost all recessions since 1950, there has been a drop in A) inflation. B) the money stock. C) the growth rate of the money stock. D) interest rates. Using a unified analytic framework to present the information in […]

Which policy measure bans spinning? A) Sarbanes-Oxley Act of 2002 B) Global Legal Settlement of 2002 C) Gramm-Leach-Bliley Act of 1999 D) Riegle-Neal Act of 1994 An option that can be exercised at any time up to maturity is called […]

On the evening news you hear of a scientific study that directly links premature births to cigarette smoking. This is an example of A) direct-model evidence. B) informed voter-model evidence. C) structural-model evidence. D) reduced-form evidence. If bonds with different […]

The mound-shaped yield curve in the figure above indicates that the inflation rate is expected to A) remain constant in the near-term and fall later on. B) fall moderately in the near-term and rise later on. C) rise moderately in […]

Junk bonds, bonds with a low bond rating, are also known as A) high-yield bonds. B) investment grade bonds. C) high quality bonds. D) zero-coupon bonds. If you purchase a $100,000 interest-rate futures contract for 105, and the price of […]

A advantage of using swaps to hedge interest-rate risk is that swaps A) are less costly than futures. B) can be written for long horizons. C) are not subject to default risk. D) are more liquid than futures. Assuming initially […]

Because of securitization, a new class of residential mortgages offered to borrowers with less-than-stellar credit records developed. These mortgages are known as A) risk-enhanced mortgages. B) subprime mortgages. C) bundled mortgages. D) adjustable-rate mortgages. According to this theory of the […]

________ assist in the initial sale of securities in the primary market; ________ assist in the trading of securities in the secondary markets. A) Investment banks; mutual funds B) Commercial banks; mutual funds C) Investment banks; securities brokers and dealers […]

Bonds with no default risk are called A) flower bonds. B) no-risk bonds. C) default-free bonds. D) zero-risk bonds. On the expiration date of a futures contract, the price of the contract converges to the A) purchase price of the […]

The type of credit insurance that landed AIG into trouble in 2008 is called A) insurance rate swaps. B) monoline insurance. C) default insurance. D) credit default swaps. When a budget deficit occurs in the United States, the U.S. Treasury […]

The problem with spinning is that it may ________ the cost of capital to a firm and thus ________ the efficiency of the capital market. A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease Before 1970, mutual […]

If you sell a $100,000 interest-rate futures contract for 105, and the price of the Treasury securities on the expiration date is 108, your ________ is ________. A) profit; $3000 B) loss; $3000 C) profit; $8000 D) loss; $8000 The […]

If the expected path of one-year interest rates over the next five years is 4 percent, 5 percent, 7 percent, 8 percent, and 6 percent, then the expectations theory predicts that today’s interest rate on the five-year bond is A) […]

Which of the following policy measures authorized investors to bring lawsuits against credit-rating agencies for a reckless failure to get the facts when providing a credit rating? A) the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 B) […]

Clauses in life insurance policies that eliminate death benefits if the insured person commits suicide is an example of a A) restrictive provision. B) restrictive covenant. C) anti-fraud exclusion. D) risk-based deductible. Early Keynesians concluded that changes in monetary policy […]

First National Bank Assuming that the average duration of its assets is five years, while the average duration of its liabilities is three years, then a 5 percentage point increase in interest rates will cause the net worth of First […]

If you buy a call option on Treasury futures at 110, and at expiration the market price is 115, the ________ will ________ exercised. A) call; be B) put; be C) call; not be D) put; not be Everything else […]

If nominal GDP is $8 trillion, and the money supply is $2 trillion, velocity is A) 0.25. B) 4. C) 8. D) 16. By taking the short position on a futures contract of $100,000 at a price of 96 you […]

A financial contract that obligates one party to exchange a set of payments it owns for another set of payments owned by another party is called a A) hedge. B) call option. C) put option. D) swap. When the yield […]

Other things being equal, an increase in the default risk of corporate bonds shifts the demand curve for corporate bonds to the ________ and the demand curve for Treasury bonds to the ________. A) right; right B) right; left C) […]

In the basic closed-economy ISLM model, the IS curve can be described by an equation where A) output is a function of consumption. B) money is a function of interest rates. C) output is a function of money. D) output […]

A decrease in the liquidity of corporate bonds will ________ the yield of corporate bonds and ________ the yield of Treasury bonds, everything else held constant. A) increase; increase B) decrease; decrease C) increase; decrease D) decrease; increase A Supreme […]

Which of the following is an advantage to money targeting? A) There is an immediate signal on the achievement of the target. B) It does not rely on a stable money-inflation relationship. C) It implies lack of transparency. D) It […]

The most common type of interest-rate swap is A) the plain vanilla swap. B) the basic swap. C) the ordinary swap. D) the notional swap. Life insurance companies are regulated by state governments because A) they have never experienced bankruptcy. […]

If a pension fund has insufficient contributions and earnings to pay benefits, it is said it be A) underfunded. B) at par. C) fully funded. D) under par. If 1-year interest rates for the next three years are expected to […]

If the required reserve ratio is 15 percent, currency in circulation is $400 billion, checkable deposits are $800 billion, and excess reserves total $0.8 billion, then the M1 money multiplier is A) 2.5. B) 1.67. C) 2.3. D) 0.651. If […]

Hedging risk for a long position is accomplished by A) taking another long position. B) taking a short position. C) taking additional long and short positions in equal amounts. D) taking a neutral position. With the followings is NOT one […]

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 did not prohibit companies issuing securities from paying the credit-rating agencies to rate them. This is an example of which remedy of conflicts of interest? A) regulate for transparency […]

A cash distribution plan for the Jonah, Krispy, and Lemon partnership was as follows: Required: If $700,000 of cash was distributed by the partnership, how much was received respectively by the priority creditors, Jonah, Krispy, and Lemon? A summary balance […]

The Vera, Wade, and Xena partnership was dissolved, and a cash distribution plan was developed, as follows: Required: If $1,000,000 of cash was distributed by the partnership, how much was received respectively by the priority creditors, Vera, Wade, and Xena? […]

Samantha’s Sporting Goods had net assets consisting of the following: Pedic Incorporated purchased Samantha’s Sporting Goods, and immediately dissolved Samantha’s as a separate legal entity. Requirement 1: If Samantha’s was purchased for $1,000,000 cash, prepare the entry recorded by Pedic. […]

Bigga Corporation purchased the net assets of Petit, Inc. on January 2, 2013 for $380,000 cash and also paid $15,000 in direct acquisition costs. Petit, Inc. was dissolved on the date of the acquisition. Petit’s balance sheet on January 2, […]

Cole Company has the following 2014 financial data: Cole Company should add segments if A) the sum of its segments’ external revenue does not exceed $600,000. B) the sum of its segments’ external revenue does not exceed $825,000. C) the […]