Question 1

There are several problems that are unique to family businesses or ventures. Which of the following is not one of those problems?

Accepted Answer

A)  Issues of succession 
B)  Problems of control, fairness, and equity 
C)  Issues of credibility 
D)  Family dynamics 
A)  Issues of succession 
B)  Problems of control, fairness, and equity 
C)  Issues of credibility 
D)  Family dynamics

Question 2

The Treasury's major influence through its borrowing to finance federal deficits is on the supply rather than demand for loanable funds.

Accepted Answer

A) True 
 B)False

Question 3

As the economy begins moving out of a recessionary period, the yield curve is generally:

Accepted Answer

A)  upward sloping 
B)  flattened out 
C)  downward sloping 
D)  discontinuous 
A)  upward sloping 
B)  flattened out 
C)  downward sloping 
D)  discontinuous

Question 4

The risk-free rate of interest is found by combining the real rate of interest and the rate paid on U.S. Treasury debt.

Accepted Answer

A) True 
 B)False

Question 5

Tax deferral on investments may increase the volume of savings.

Accepted Answer

A) True 
 B)False

Question 6

The loanable funds theory used to explain the level of interest rates holds that interest rates are a function of the supply of:

Accepted Answer

A)  loanable funds and the demand for money 
B)  loanable funds and the demand for loanable funds 
C)  money and the demand for loanable funds 
D)  money and the demand for money 
A)  loanable funds and the demand for money 
B)  loanable funds and the demand for loanable funds 
C)  money and the demand for loanable funds 
D)  money and the demand for money

Question 7

Which of the following does not accumulate savings?

Accepted Answer

A)  individuals 
B)  corporations 
C)  governmental units 
D)  federal government 
A)  individuals 
B)  corporations 
C)  governmental units 
D)  federal government

Question 8

Holding demand constant, an increase in the supply of loanable funds will result in an increase in interest rates.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not considered to be a basic theory used to explain the term structure of interest rates?

Accepted Answer

A)  expectations theory 
B)  loanable funds theory 
C)  liquidity premium theory 
D)  market segmentation theory 
A)  expectations theory 
B)  loanable funds theory 
C)  liquidity premium theory 
D)  market segmentation theory

Question 10

Treasury bonds are government securities issued with maturities ranging from 11 to 50 years.

Accepted Answer

A) True 
 B)False

Question 11

The risk-free rate of interest is equal to the real rate of interest plus a premium for inflation.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements is most correct?

Accepted Answer

A)  Marketable government securities are those securities that cannot be transferred to other persons or institutions and can be redeemed only by being turned in to the U.S. government 
B)  Nonmarketable government securities are those securities that can be transferred to other persons or institutions and can be redeemed only by being turned in to the U.S. government 
C)  Nonmarketable government securities are those securities that cannot be transferred to other persons or institutions and can be redeemed only by being turned in to the U.S. government 
D)  Marketable government securities must only be sold or transferred through commercial banks 
A)  Marketable government securities are those securities that cannot be transferred to other persons or institutions and can be redeemed only by being turned in to the U.S. government 
B)  Nonmarketable government securities are those securities that can be transferred to other persons or institutions and can be redeemed only by being turned in to the U.S. government 
C)  Nonmarketable government securities are those securities that cannot be transferred to other persons or institutions and can be redeemed only by being turned in to the U.S. government 
D)  Marketable government securities must only be sold or transferred through commercial banks

Question 13

The relationship between interest rates or yields and the time to maturity for debt instruments of comparable quality is called:

Accepted Answer

A)  the yield to maturity 
B)  the term structure of interest rates 
C)  the maturity risk premium 
D)  the expectations hypothesis 
A)  the yield to maturity 
B)  the term structure of interest rates 
C)  the maturity risk premium 
D)  the expectations hypothesis

Question 14

Which of the following is not true of Treasury bills?

Accepted Answer

A)  long-lived 
B)  sold at a discount 
C)  mature at par 
D)  pay lower interest rates than Treasury bonds 
A)  long-lived 
B)  sold at a discount 
C)  mature at par 
D)  pay lower interest rates than Treasury bonds

Question 15

The supply of savings comes from all sectors of the economy.

Accepted Answer

A) True 
 B)False

Question 16

The observed market interest rate (r) can be expressed as r = RR x IP.

Accepted Answer

A) True 
 B)False

Question 17

______________ occurs during economic expansions when demand for goods and services is greater than supply.

Accepted Answer

A)  Administrative inflation 
B)  Speculative inflation 
C)  Cost-push inflation 
D)  Demand-pull inflation 
A)  Administrative inflation 
B)  Speculative inflation 
C)  Cost-push inflation 
D)  Demand-pull inflation

Question 18

The nominal interest rate may include a default risk premium.

Accepted Answer

A) True 
 B)False

Question 19

A government securities issued with maturities ranging from 11 to 30 years.

Accepted Answer

A)  Treasury notes 
B)  Treasury certificate 
C)  Treasury bills 
D)  Treasury bonds 
A)  Treasury notes 
B)  Treasury certificate 
C)  Treasury bills 
D)  Treasury bonds

Question 20

A decrease in the demand for loanable funds, holding supply constant, will cause interest rates to:

Accepted Answer

A)  increase 
B)  decrease 
C)  stay the same 
D)  decrease rapidly then increase slowly 
A)  increase 
B)  decrease 
C)  stay the same 
D)  decrease rapidly then increase slowly

There are several problems that are unique to family businesses or ventures. Which of the following is not one of those problems?

The Treasury's major influence through its borrowing to finance federal deficits is on the supply rather than demand for loanable funds.

As the economy begins moving out of a recessionary period, the yield curve is generally:

The risk-free rate of interest is found by combining the real rate of interest and the rate paid on U.S. Treasury debt.

Tax deferral on investments may increase the volume of savings.

The loanable funds theory used to explain the level of interest rates holds that interest rates are a function of the supply of:

Which of the following does not accumulate savings?

Holding demand constant, an increase in the supply of loanable funds will result in an increase in interest rates.

Which of the following is not considered to be a basic theory used to explain the term structure of interest rates?

Treasury bonds are government securities issued with maturities ranging from 11 to 50 years.

The risk-free rate of interest is equal to the real rate of interest plus a premium for inflation.

Which of the following statements is most correct?

The relationship between interest rates or yields and the time to maturity for debt instruments of comparable quality is called:

Which of the following is not true of Treasury bills?

The supply of savings comes from all sectors of the economy.

The observed market interest rate (r) can be expressed as r = RR x IP.

______________ occurs during economic expansions when demand for goods and services is greater than supply.

The nominal interest rate may include a default risk premium.

A government securities issued with maturities ranging from 11 to 30 years.

A decrease in the demand for loanable funds, holding supply constant, will cause interest rates to:

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Time Value of Money

Bonds and Stocks: Characteristics and Valuations

Securities and Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

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Exam 8: Interest Rates

There are several problems that are unique to family businesses or ventures. Which of the following is not one of those problems?

The Treasury's major influence through its borrowing to finance federal deficits is on the supply rather than demand for loanable funds.

As the economy begins moving out of a recessionary period, the yield curve is generally:

The risk-free rate of interest is found by combining the real rate of interest and the rate paid on U.S. Treasury debt.

Tax deferral on investments may increase the volume of savings.

The loanable funds theory used to explain the level of interest rates holds that interest rates are a function of the supply of:

Which of the following does not accumulate savings?

Holding demand constant, an increase in the supply of loanable funds will result in an increase in interest rates.

Which of the following is not considered to be a basic theory used to explain the term structure of interest rates?

Treasury bonds are government securities issued with maturities ranging from 11 to 50 years.

The risk-free rate of interest is equal to the real rate of interest plus a premium for inflation.

Which of the following statements is most correct?

The relationship between interest rates or yields and the time to maturity for debt instruments of comparable quality is called:

Which of the following is not true of Treasury bills?

The supply of savings comes from all sectors of the economy.

The observed market interest rate (r) can be expressed as r = RR x IP.

______________ occurs during economic expansions when demand for goods and services is greater than supply.

The nominal interest rate may include a default risk premium.

A government securities issued with maturities ranging from 11 to 30 years.

A decrease in the demand for loanable funds, holding supply constant, will cause interest rates to:

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Time Value of Money

Bonds and Stocks: Characteristics and Valuations

Securities and Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters