Question 1

Bonds, stocks, and other financial claims that can be traded among investors are called _____.

Accepted Answer

A)  units of account 
B)  principal 
C)  equity 
D)  securities 
A)  units of account 
B)  principal 
C)  equity 
D)  securities

Question 2

The thing you must give up in the future to consume something today is known as the _____of consuming now.

Accepted Answer

A)  opportunity cost 
B)  variable cost 
C)  average cost 
D)  sunk cost 
A)  opportunity cost 
B)  variable cost 
C)  average cost 
D)  sunk cost

Question 3

Mark invested an amount of $1,500 for a period of 2 years at a rate of interest of 5%. In order to have a final balance of $1,653.75, Mark should_____.

Accepted Answer

A)  consume the interest earned at the end of each year 
B)  reinvest the interest earned at the end of the first year 
C)  withdraw his principal at the end of the first year 
D)  invest $100 at the end of the first year 
A)  consume the interest earned at the end of each year 
B)  reinvest the interest earned at the end of the first year 
C)  withdraw his principal at the end of the first year 
D)  invest $100 at the end of the first year

Question 4

If the market interest rate falls,_____.

Accepted Answer

A)  the value of a previously issued bond falls 
B)  the value of a previously issued bond increases 
C)  the market price for bonds decreases 
D)  the demand for bonds increases 
A)  the value of a previously issued bond falls 
B)  the value of a previously issued bond increases 
C)  the market price for bonds decreases 
D)  the demand for bonds increases

Question 5

If the nominal rate of return on an investment is 7.5% and the real rate of return is 5.2%, the long-run average inflation rate is _____.

Accepted Answer

A)  1.44% 
B)  2.3% 
C)  12.7% 
D)  21.5% 
A)  1.44% 
B)  2.3% 
C)  12.7% 
D)  21.5%

Question 6

_____ are long-term loans made to a borrower by a lender.

Accepted Answer

A)  Bonds 
B)  Patents 
C)  Trademarks 
D)  Coupons 
A)  Bonds 
B)  Patents 
C)  Trademarks 
D)  Coupons

Question 7

If the market interest rate rises, _____.

Accepted Answer

A)  the present value of future payments increases 
B)  the supply of bonds decreases 
C)  the market price for bonds decreases 
D)  the demand for bonds decreases 
A)  the present value of future payments increases 
B)  the supply of bonds decreases 
C)  the market price for bonds decreases 
D)  the demand for bonds decreases

Question 8

Mr. X invested $5,000 for a period of 2 years. The investment plan offered a nominal rate of return of 6% on the investment.
-Refer to the scenario above. If the long-run average inflation rate is 3%, the real value of his investment in today's dollars is ____.

Accepted Answer

A)  $5,304.50 
B)  $5,618.00 
C)  $10,430.50 
D)  $15,612.00 
A)  $5,304.50 
B)  $5,618.00 
C)  $10,430.50 
D)  $15,612.00

Question 9

Which of the following is true of shares of stock?

Accepted Answer

A)  Shares of stock are riskier than bonds. 
B)  Share values can be negative. 
C)  Share prices cannot be zero. 
D)  Bonds are riskier than shares of stocks. 
A)  Shares of stock are riskier than bonds. 
B)  Share values can be negative. 
C)  Share prices cannot be zero. 
D)  Bonds are riskier than shares of stocks.

Question 10

The time delay between the initial investment and the final withdrawal is referred to as the _____.

Accepted Answer

A)  effectiveness lag 
B)  problem of time inconsistency 
C)  holding period 
D)  implementation lag 
A)  effectiveness lag 
B)  problem of time inconsistency 
C)  holding period 
D)  implementation lag

Question 11

The real rate of return on an investment is obtained by_____.

Accepted Answer

A)  subtracting the long-run inflation rate from the nominal rate of return 
B)  adding the long-run inflation rate to the nominal rate of return 
C)  multiplying the long-run inflation rate with the nominal rate of return 
D)  dividing the nominal rate of return by the long-run inflation rate 
A)  subtracting the long-run inflation rate from the nominal rate of return 
B)  adding the long-run inflation rate to the nominal rate of return 
C)  multiplying the long-run inflation rate with the nominal rate of return 
D)  dividing the nominal rate of return by the long-run inflation rate

Bonds, stocks, and other financial claims that can be traded among investors are called _____.

The thing you must give up in the future to consume something today is known as the _____of consuming now.

Mark invested an amount of $1,500 for a period of 2 years at a rate of interest of 5%. In order to have a final balance of $1,653.75, Mark should_____.

If the market interest rate falls,_____.

If the nominal rate of return on an investment is 7.5% and the real rate of return is 5.2%, the long-run average inflation rate is _____.

_____ are long-term loans made to a borrower by a lender.

If the market interest rate rises, _____.

Mr. X invested $5,000 for a period of 2 years. The investment plan offered a nominal rate of return of 6% on the investment. -Refer to the scenario above. If the long-run average inflation rate is 3%, the real value of his investment in today's dollars is ____.

Which of the following is true of shares of stock?

The time delay between the initial investment and the final withdrawal is referred to as the _____.

The real rate of return on an investment is obtained by_____.

Economic Methods and Optimization: Doing the Best You Can

Demand, Supply, and Equilibrium

Consumers and Incentives,the Wealth of Nations: Defining and Measuring Macroeconomic Aggregates

Sellers and Incentives,aggregate Incomes

Perfect Competition and the Invisible Hand, Economic Growth

Trade and Why Isnt the Whole World Developed

Externalities and Public Goods, Employment and Unemployment

The Government in the Economy: Taxation and Regulation, Credit Markets

Markets for Factors of Production and the Monetary System

Monopoly and Short-Run Fluctuations

Game Theory and Strategic Play

Oligopoly and Monopolistic Competition

Trade-Offs Involving Time and Risk and Open Economy Macroeconomics

Social Economics and Auctions and Bargaining

Web: Economics of Life, Health, and the Environment

Web: Political Economy

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Exam 15: Web: Financial Decision Making

Bonds, stocks, and other financial claims that can be traded among investors are called _____.

The thing you must give up in the future to consume something today is known as the _____of consuming now.

Mark invested an amount of $1,500 for a period of 2 years at a rate of interest of 5%. In order to have a final balance of $1,653.75, Mark should_____.

If the market interest rate falls,_____.

If the nominal rate of return on an investment is 7.5% and the real rate of return is 5.2%, the long-run average inflation rate is _____.

_____ are long-term loans made to a borrower by a lender.

If the market interest rate rises, _____.

Mr. X invested $5,000 for a period of 2 years. The investment plan offered a nominal rate of return of 6% on the investment. -Refer to the scenario above. If the long-run average inflation rate is 3%, the real value of his investment in today's dollars is ____.

Which of the following is true of shares of stock?

The time delay between the initial investment and the final withdrawal is referred to as the _____.

The real rate of return on an investment is obtained by_____.

Economic Methods and Optimization: Doing the Best You Can

Demand, Supply, and Equilibrium

Consumers and Incentives,the Wealth of Nations: Defining and Measuring Macroeconomic Aggregates

Sellers and Incentives,aggregate Incomes

Perfect Competition and the Invisible Hand, Economic Growth

Trade and Why Isnt the Whole World Developed

Externalities and Public Goods, Employment and Unemployment

The Government in the Economy: Taxation and Regulation, Credit Markets

Markets for Factors of Production and the Monetary System

Monopoly and Short-Run Fluctuations

Game Theory and Strategic Play

Oligopoly and Monopolistic Competition

Trade-Offs Involving Time and Risk and Open Economy Macroeconomics

Social Economics and Auctions and Bargaining

Web: Economics of Life, Health, and the Environment

Web: Political Economy

Filters