Question 1

The primary assets of credit unions are

Accepted Answer

A)  municipal bonds. 
B)  business loans. 
C)  consumer loans. 
D)  mortgages. 
A)  municipal bonds. 
B)  business loans. 
C)  consumer loans. 
D)  mortgages.

Question 2

One reason for the extraordinary growth of foreign financial markets is

Accepted Answer

A)  decreased trade. 
B)  increases in the pool of savings in foreign countries. 
C)  the recent introduction of the foreign bond. 
D)  slower technological innovation in foreign markets. 
A)  decreased trade. 
B)  increases in the pool of savings in foreign countries. 
C)  the recent introduction of the foreign bond. 
D)  slower technological innovation in foreign markets.

Question 3

The concept of diversification is captured by the statement

Accepted Answer

A)  don't look a gift horse in the mouth. 
B)  don't put all your eggs in one basket. 
C)  it never rains, but it pours. 
D)  make hay while the sun shines. 
A)  don't look a gift horse in the mouth. 
B)  don't put all your eggs in one basket. 
C)  it never rains, but it pours. 
D)  make hay while the sun shines.

Question 4

Conflicts of interest are a type of ________ problem that can happen when an institution provides multiple services.

Accepted Answer

A)  adverse selection 
B)  free-riding 
C)  discounting 
D)  moral hazard 
A)  adverse selection 
B)  free-riding 
C)  discounting 
D)  moral hazard

Question 5

Which of the following statements about financial markets and securities is true?

Accepted Answer

A)  A bond is a long-term security that promises to make periodic payments called dividends to the firm's residual claimants. 
B)  A debt instrument is intermediate term if its maturity is less than one year. 
C)  A debt instrument is intermediate term if its maturity is ten years or longer. 
D)  The maturity of a debt instrument is the number of years (term) to that instrument's expiration date. 
A)  A bond is a long-term security that promises to make periodic payments called dividends to the firm's residual claimants. 
B)  A debt instrument is intermediate term if its maturity is less than one year. 
C)  A debt instrument is intermediate term if its maturity is ten years or longer. 
D)  The maturity of a debt instrument is the number of years (term) to that instrument's expiration date.

Question 6

Which of the following instruments are traded in a money market?

Accepted Answer

A)  Bank commercial loans 
B)  Commercial paper 
C)  State and local government bonds 
D)  Residential mortgages 
A)  Bank commercial loans 
B)  Commercial paper 
C)  State and local government bonds 
D)  Residential mortgages

Question 7

An investment intermediary that lends funds to consumers is

Accepted Answer

A)  a finance company. 
B)  an investment bank. 
C)  a finance fund. 
D)  a consumer company. 
A)  a finance company. 
B)  an investment bank. 
C)  a finance fund. 
D)  a consumer company.

Question 8

The countries that have made the least use of securities markets are ________ and ________; in these two countries finance from financial intermediaries has been almost ten times greater than that from securities markets.

Accepted Answer

A)  Germany; Japan 
B)  Germany; Great Britain 
C)  Great Britain; Canada 
D)  Canada; Japan 
A)  Germany; Japan 
B)  Germany; Great Britain 
C)  Great Britain; Canada 
D)  Canada; Japan

Question 9

Increasing the amount of information available to investors helps to reduce the problems of ________ and ________ in the financial markets.

Accepted Answer

A)  adverse selection; moral hazard 
B)  adverse selection; risk sharing 
C)  moral hazard; transactions costs 
D)  adverse selection; economies of scale 
A)  adverse selection; moral hazard 
B)  adverse selection; risk sharing 
C)  moral hazard; transactions costs 
D)  adverse selection; economies of scale

Question 10

________ are short-term loans in which Treasury bills serve as collateral.

Accepted Answer

A)  Repurchase agreements 
B)  Negotiable certificates of deposit 
C)  Federal funds 
D)  U.S. government agency securities 
A)  Repurchase agreements 
B)  Negotiable certificates of deposit 
C)  Federal funds 
D)  U.S. government agency securities

Question 11

Which of the following is a contractual savings institution?

Accepted Answer

A)  A life insurance company 
B)  A credit union 
C)  A savings and loan association 
D)  A mutual fund 
A)  A life insurance company 
B)  A credit union 
C)  A savings and loan association 
D)  A mutual fund

Question 12

When an investment bank ________ securities,it guarantees a price for a corporation's securities and then sells them to the public.

Accepted Answer

A)  underwrites 
B)  undertakes 
C)  overwrites 
D)  overtakes 
A)  underwrites 
B)  undertakes 
C)  overwrites 
D)  overtakes

The primary assets of credit unions are

One reason for the extraordinary growth of foreign financial markets is

The concept of diversification is captured by the statement

Conflicts of interest are a type of ________ problem that can happen when an institution provides multiple services.

Which of the following statements about financial markets and securities is true?

Which of the following instruments are traded in a money market?

An investment intermediary that lends funds to consumers is

The countries that have made the least use of securities markets are and ; in these two countries finance from financial intermediaries has been almost ten times greater than that from securities markets.

Increasing the amount of information available to investors helps to reduce the problems of and in the financial markets.

________ are short-term loans in which Treasury bills serve as collateral.

Which of the following is a contractual savings institution?

When an investment bank ________ securities,it guarantees a price for a corporation's securities and then sells them to the public.

Why Study Money, banking, and Financial Markets

What Is Money

Understanding Interest Rates

The Behavior of Interest Rates

The Risk and Term Structure of Interest Rates

The Stock Market, the Theory of Rational Expectations, and the Efficient Market Hypothesis

An Economic Analysis of Financial Structure

Financial Crises

Banking and the Management of Financial Institutions

Economic Analysis of Financial Regulation

Banking Industry: Structure and Competition

Central Banks and the Federal Reserve System

The Money Supply Process

Tools of Monetary Policy

The Conduct of Monetary Policy: Strategy and Tactics

The Foreign Exchange Market

The International Financial System

Quantity Theory, inflation and the Demand for Money

The Is Curve

The Monetary Policy and Aggregate Demand Curves

Aggregate Demand and Supply Analysis

Monetary Policy Theory

The Role of Expectations in Monetary Policy

Transmission Mechanisms of Monetary Policy

The ISLM Model

Filters

Exam 2: An Overview of the Financial System

The primary assets of credit unions are

One reason for the extraordinary growth of foreign financial markets is

The concept of diversification is captured by the statement

Conflicts of interest are a type of ________ problem that can happen when an institution provides multiple services.

Which of the following statements about financial markets and securities is true?

Which of the following instruments are traded in a money market?

An investment intermediary that lends funds to consumers is

The countries that have made the least use of securities markets are ________ and ________; in these two countries finance from financial intermediaries has been almost ten times greater than that from securities markets.

Increasing the amount of information available to investors helps to reduce the problems of ________ and ________ in the financial markets.

________ are short-term loans in which Treasury bills serve as collateral.

Which of the following is a contractual savings institution?

When an investment bank ________ securities,it guarantees a price for a corporation's securities and then sells them to the public.

Why Study Money, banking, and Financial Markets

What Is Money

Understanding Interest Rates

The Behavior of Interest Rates

The Risk and Term Structure of Interest Rates

The Stock Market, the Theory of Rational Expectations, and the Efficient Market Hypothesis

An Economic Analysis of Financial Structure

Financial Crises

Banking and the Management of Financial Institutions

Economic Analysis of Financial Regulation

Banking Industry: Structure and Competition

Central Banks and the Federal Reserve System

The Money Supply Process

Tools of Monetary Policy

The Conduct of Monetary Policy: Strategy and Tactics

The Foreign Exchange Market

The International Financial System

Quantity Theory, inflation and the Demand for Money

The Is Curve

The Monetary Policy and Aggregate Demand Curves

Aggregate Demand and Supply Analysis

Monetary Policy Theory

The Role of Expectations in Monetary Policy

Transmission Mechanisms of Monetary Policy

The ISLM Model

Filters

The countries that have made the least use of securities markets are and ; in these two countries finance from financial intermediaries has been almost ten times greater than that from securities markets.

Increasing the amount of information available to investors helps to reduce the problems of and in the financial markets.