Archives: Quiz
978-1259917059 Test Bank Chapter 1 Part 2
31) Which of the following is identified by the GASB as the “cornerstone” of all financial reporting in government? A) Decision usefulness. B) Stewardship. C) Accountability. D) Interperiod equity. Answer: C Difficulty: 1 Easy Topic: Objectives of financial reporting Learning […]
978-1259917059 Test Bank Chapter 1 Part 1
Accounting for Governmental and Nonprofit Entities, 18e (Reck) Chapter 1 Introduction to Accounting and Financial Reporting for Government and Not-for-Profit Entities 1) Special purpose governments generally provide a wider range of services to their residents than do general purpose governments. […]
978-0133427073 Test Bank Chapter 9 Part 3
66) The Board of Governors of the Federal Reserve System A) appoint three directors to each Federal Reserve Bank. B) elect six members to member commercial banks. C) both of the above. D) none of the above. Answer: A Topic: […]
978-0133427073 Test Bank Chapter 9 Part 2
41) The oldest central bank, founded in 1694, is the A) Bank of England. B) Deutsche Bundesbank. C) Bank of Japan. D) Federal Reserve System. Answer: A Topic: Chapter 9.6 Structure and Independence of Other Foreign Central Banks Question Status: […]
978-0133427073 Test Bank Chapter 9 Part 1
Financial Markets and Institutions, 8e (Mishkin) Chapter 9 Central Banks and the Federal Reserve System 9.1 Multiple Choice 1) Americans’ fear of centralized power and their distrust of moneyed interests explain why the U.S. did not have a central bank […]
978-0133427073 Test Bank Chapter 8
Financial Markets and Institutions, 8e (Mishkin) Chapter 8 Why Do Financial Crises Occur and Why Are They So Damaging to the Economy? 8.1 Multiple Choice 1) Financial crises A) are major disruptions in financial markets that are characterized by sharp […]
978-0133427073 Test Bank Chapter 7 Part 3
74) Spinning is the practice of A) investment banks allowing executives of potential client companies to buy underpriced initial public offerings of other companies’ securities. B) investment bank analysts providing misleading information about a company to encourage more investors to […]
978-0133427073 Test Bank Chapter 7 Part 2
38) Collateral is A) property that is pledged to the lender if a borrower cannot make his or her debt payments. B) a prevalent feature of debt contracts for households. C) a prevalent feature of debt contracts for businesses. D) […]
978-0133427073 Test Bank Chapter 7 Part 1
Financial Markets and Institutions, 8e (Mishkin) Chapter 7 Why Do Financial Institutions Exist? 7.1 Multiple Choice 1) Of the following sources of external finance for American nonfinancial businesses, the least important is A) loans from banks. B) stocks. C) bonds […]
978-0133427073 Test Bank Chapter 6 Part 2
30) Which of the following does not weaken the efficient markets hypothesis? A) Mean reversion B) Success of buy-and-hold strategy C) January effect D) Excessive volatility Answer: B Topic: Chapter 6.2 Evidence on the Efficient Market Hypothesis Question Status: Previous […]
978-0133427073 Test Bank Chapter 6 Part 1
Financial Markets and Institutions, 8e (Mishkin) Chapter 6 Are Financial Markets Efficient? 6.1 Multiple Choice 1) How expectations are formed is important because expectations influence A) the demand for assets. B) bond prices. C) the risk structure of interest rates. […]
978-0133427073 Test Bank Chapter 5 Part 3
69) ________ bonds are exempt from federal income taxes. A) Corporate Aaa B) U.S. Treasury C) Corporate Baa D) Municipal Answer: D Topic: Chapter 5.1 Risk Structure of Interest Rates Question Status: Previous Edition 70) The risk structure of interest […]
978-0133427073 Test Bank Chapter 5 Part 2
41) Economists’ attempts to explain the term structure of interest rates A) illustrate how economists modify theories to improve them when they are inconsistent with the empirical evidence. B) illustrate how economists continue to accept theories that fail to explain […]
978-0133427073 Test Bank Chapter 5 Part 1
Financial Markets and Institutions, 8e (Mishkin) Chapter 5 How Do Risk and Term Structure Affect Interest Rates? 5.1 Multiple Choice 1) The term structure of interest rates is A) the relationship among interest rates of different bonds with the same […]
978-0133427073 Test Bank Chapter 4 Part 3
71) If the liquidity effect is smaller than the other effects, and the adjustment of expected inflation is slow, then the A) interest rate will fall. B) interest rate will rise. C) interest rate will initially fall but eventually climb […]
978-0133427073 Test Bank Chapter 4 Part 2
43) When the inflation rate is expected to increase, the real cost of borrowing declines at any given interest rate; as a result, the ________ bonds increases and the ________ curve shifts to the right. A) demand for; demand B) […]
978-0133427073 Test Bank Chapter 4 Part 1
Financial Markets and Institutions, 8e (Mishkin) Chapter 4 Why Do Interest Rates Change? 4.1 Multiple Choice 1) As the price of a bond ________ and the expected return ________, bonds become more attractive to investors and the quantity demanded rises. […]
978-0133427073 Test Bank Chapter 3 Part 3
68) The interest rate that is adjusted for actual changes in the price level is called the A) ex post real interest rate. B) expected interest rate. C) ex ante real interest rate. D) none of the above. Answer: A […]
978-0133427073 Test Bank Chapter 3 Part 2
44) The Fisher equation states that A) the nominal interest rate equals the real interest rate plus the expected rate of inflation. B) the real interest rate equals the nominal interest rate less the expected rate of inflation. C) the […]
978-0133427073 Test Bank Chapter 3 Part 1
Financial Markets and Institutions, 8e (Mishkin) Chapter 3 What Do Interest Rates Mean and What Is Their Role in Valuation? 3.1 Multiple Choice 1) A loan that requires the borrower to make the same payment every period until the maturity […]
978-0133427073 Test Bank Chapter 27
Financial Markets and Institutions, 8e (Mishkin) Chapter 27 Finance Companies 27.1 Multiple Choice 1) The earliest examples of finance companies date back to the beginning of the ________ when retailers offered installment credit to customers. A) 1800s B) 1900s C) […]
978-0133427073 Test Bank Chapter 26 Part 2
39) The major provisions of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 included A) abolishing the Federal Home Loan Bank Board and the FSLIC. B) transferring the regulatory role of the Federal Home Loan Bank Board to […]
978-0133427073 Test Bank Chapter 26 Part 1
Financial Markets and Institutions, 8e (Mishkin) Chapter 26 Savings Associations and Credit Unions 26.1 Multiple Choice 1) Savings banks A) were first established in Scotland and England. B) were established to encourage saving by the poor. C) were very conservative […]
978-0133427073 Test Bank Chapter 25
Financial Markets and Institutions, 8e (Mishkin) Chapter 25 Financial Crises In Emerging Market Economies 25.1 Multiple Choice 1) Financial crises A) are major disruptions in financial markets that are characterized by sharp declines in asset prices and the failures of […]
978-0133427073 Test Bank Chapter 24 Part 3
75) If a bank has a gap of -$10 million, it can reduce its interest-rate risk by A) paying a fixed rate on $10 million and receiving a floating rate on $10 million. B) paying a floating rate on $10 […]
978-0133427073 Test Bank Chapter 24 Part 2
47) Options on individual stocks are referred to as ________. A) stock options B) futures options C) American options D) individual options Answer: A Topic: Chapter 24.5 Options Question Status: Previous Edition 48) Options on futures contracts are referred to […]
978-0133427073 Test Bank Chapter 24 Part 1
Financial Markets and Institutions, 8e (Mishkin) Chapter 24 Hedging with Financial Derivatives 24.1 Multiple Choice 1) Financial derivatives include ________. A) stocks B) bonds C) futures D) none of the above Answer: C Topic: Chapter 24.3 Financial Futures Markets Question […]
978-0133427073 Test Bank Chapter 23 Part 2
33) If First National Bank has a gap equal to a negative $30 million, then a 5 percentage point increase in interest rates will cause profits to A) increase by $15 million. B) increase by $1.5 million. C) decline by […]
978-0133427073 Test Bank Chapter 23 Part 1
Financial Markets and Institutions, 8e (Mishkin) Chapter 23 Risk Management in Financial Institutions 23.1 Multiple Choice 1) Banks face the problem of ________ in loan markets because bad credit risks are the ones most likely to seek bank loans. A) […]
978-0133427073 Test Bank Chapter 22 Part 2
43) An instruction to a securities agent to purchase a stock as long as its price does not exceed a specified level is a ________. A) short sell B) market order C) limit order D) stop loss order Answer: C […]
978-0133427073 Test Bank Chapter 22 Part 1
Financial Markets and Institutions, 8e (Mishkin) Chapter 22 Investment Banks, Security Brokers and Dealers, and Venture Capital Firms 22.1 Multiple Choice 1) An investment bank is a financial institution that A) bundles small deposits into larger loans. B) helps corporations […]
978-0133427073 Test Bank Chapter 21 Part 2
39) Which of the following statements regarding the funding of Social Security is false? A) In 2010, workers contributed 6.2% of their wages up to a maximum of $106,800. B) Employers contribute an amount equal to the workers’ contributions. C) […]
978-0133427073 Test Bank Chapter 21 Part 1
Financial Markets and Institutions, 8e (Mishkin) Chapter 21 Insurance Companies and Pension Funds 21.1 Multiple Choice 1) The earliest form of insurance was ________ insurance. A) life B) health C) automobile D) property and casualty Answer: D Topic: Chapter 21.4 […]
978-0133427073 Test Bank Chapter 20 Part 2
28) Conflicts arise in the mutual funds industry because ________ cannot effectively monitor ________. A) investment advisers; directors B) directors; shareholders C) shareholders; investment advisers D) investment advisers; stocks that will outperform the overall market Answer: C Topic: Chapter 20.8 […]
978-0133427073 Test Bank Chapter 20 Part 1
Financial Markets and Institutions, 8e (Mishkin) Chapter 20 The Mutual Fund Industry 20.1 Multiple Choice 1) At the beginning of 2013, mutual funds held about ________ of the U.S. stock market was held by mutual funds. A) 30% B) 50% […]
978-0133427073 Test Bank Chapter 2 Part 2
39) Successful financial intermediaries have higher earnings on their investments because they are better equipped than individuals to screen out good from bad risks, thereby reducing losses due to A) moral hazard. B) adverse selection. C) bad luck. D) financial […]
978-0133427073 Test Bank Chapter 2 Part 1
Financial Markets and Institutions, 8e (Mishkin) Chapter 2 Overview of the Financial System 2.1 Multiple Choice 1) Every financial market performs the following function: A) It determines the level of interest rates. B) It allows common stock to be traded. […]
978-0133427073 Test Bank Chapter 19 Part 3
84) In recent years, commercial banks have been allowed to A) invest in real estate. B) enter certain insurance markets. C) underwrite stocks. D) do all of the above. E) do only A and B of the above. Answer: D […]
978-0133427073 Test Bank Chapter 19 Part 2
42) So-called fallen angels differ from junk bonds in that A) junk bonds refer to previously issued bonds which have had their credit ratings fall below Baa. B) fallen angels refer to newly issued bonds with low credit ratings. C) […]
978-0133427073 Test Bank Chapter 19 Part 1
Financial Markets and Institutions, 8e (Mishkin) Chapter 19 Banking Industry: Structure and Competition 19.1 Multiple Choice 1) The modern commercial banking system began in America when the A) Bank of the United States was chartered in New York in 1801. […]
978-0133427073 Test Bank Chapter 18 Part 2
35) As a way of stemming the decline in the number of savings and loans and mutual savings banks, the Garn-St. Germain Act of 1982 allowed A) money market certificates. B) money market mutual funds. C) money market deposit accounts. […]
978-0133427073 Test Bank Chapter 18 Part 1
Financial Markets and Institutions, 8e (Mishkin) Chapter 18 Financial Regulation 18.1 Multiple Choice 1) During the boom years of the 1920s, bank failures were quite A) uncommon, averaging less than 30 per year. B) uncommon, averaging less than 100 per […]
978-0133427073 Test Bank Chapter 17 Part 3
73) When a bank sells all or part of the cash stream from a specific loan, A) it removes the loan from its balance sheet. B) it usually does so at a loss. C) it usually does so at a […]
978-0133427073 Test Bank Chapter 17 Part 2
47) If a bank has $200,000 of deposits, a required reserve ratio of 20 percent, and $80,000 in reserves, then the maximum deposit outflow it can sustain without altering its balance sheet is A) $50,000. B) $40,000. C) $30,000. D) […]
978-0133427073 Test Bank Chapter 17 Part 1
Financial Markets and Institutions, 8e (Mishkin) Chapter 17 Banking and the Management of Financial Institutions 17.1 Multiple Choice 1) Which of the following statements is true? A) A bank’s assets are its sources of funds. B) A bank’s liabilities are […]
978-0133427073 Test Bank Chapter 16 Part 2
41) Leading up to the foreign exchange crisis of September 1992, the Bank of England wanted to pursue a(n) ________ monetary policy and the German Bundesbank wanted to pursue a(n) ________ monetary policy. A) expansionary, expansionary B) expansionary; contractionary C) […]
978-0133427073 Test Bank Chapter 16 Part 1
Financial Markets and Institutions, 8e (Mishkin) Chapter 16 The International Financial System 16.1 Multiple Choice 1) A central bank sale of ________ to purchase ________ in the foreign exchange market results in an equal rise in its international reserves and […]
978-0133427073 Test Bank Chapter 15 Part 2
42) When Americans and foreigners expect the return on ________ deposits to be high relative to the return on ________ deposits, there is a higher demand for dollar deposits and a correspondingly lower demand for foreign deposits. A) dollar; dollar […]
978-0133427073 Test Bank Chapter 15 Part 1
Financial Markets and Institutions, 8e (Mishkin) Chapter 15 The Foreign Exchange Market 15.1 Multiple Choice 1) American firms became less competitive compared to foreign firms during the 1980s because A) the quality and productivity of American workers declined. B) foreign […]
978-0133427073 Test Bank Chapter 14 Part 2
33) The Federal Housing Administration (FHA) A) was set up to buy mortgages from thrifts so that these institutions could make more loans. B) funds purchases of mortgages by selling bonds to the public. C) provides insurance for certain mortgage […]