<< Earth Science 14th Edition by Tarbuck and Lutgens Test Bank | Egan Fundamentals of Respiratory Care 10th Edition by Robert M. Kacmarek Test Bank >> |
Economics of Money, Banking, and Fin. Markets, 10e (Mishkin)
Chapter 2 An Overview of the Financial System
2.1 Function of Financial Markets
1) Every financial market has the following characteristic:
Answer: D
Ques Status: Previous Edition
AACSB: Reflective thinking skills
2) Financial markets have the basic function of
Answer: A
Ques Status: Previous Edition
AACSB: Reflective thinking skills
3) Financial markets improve economic welfare because
Answer: B
Ques Status: Previous Edition
AACSB: Reflective thinking skills
4) Well-functioning financial markets
Answer: D
Ques Status: Previous Edition
AACSB: Reflective thinking skills
5) A breakdown of financial markets can result in
Answer: C
Ques Status: Previous Edition
AACSB: Reflective thinking skills
6) The principal lender-savers are
Answer: C
Ques Status: Previous Edition
7) Which of the following can be described as direct finance?
Answer: B
Ques Status: Previous Edition
AACSB: Analytic skills
8) Assume that you borrow $2000 at 10% annual interest to finance a new business project. For this loan to be profitable, the minimum amount this project must generate in annual earnings is
Answer: B
Ques Status: Previous Edition
AACSB: Analytic skills
9) You can borrow $5000 to finance a new business venture. This new venture will generate annual earnings of $251. The maximum interest rate that you would pay on the borrowed funds and still increase your income is
Answer: D
Ques Status: Previous Edition
AACSB: Analytic skills
10) Which of the following can be described as involving direct finance?
Answer: A
Ques Status: Previous Edition
AACSB: Analytic skills
11) Which of the following can be described as involving direct finance?
Answer: D
Ques Status: Previous Edition
AACSB: Analytic skills
12) Which of the following can be described as involving indirect finance?
Answer: D
Ques Status: Previous Edition
AACSB: Analytic skills
13) Which of the following can be described as involving indirect finance?
Answer: B
Ques Status: Previous Edition
AACSB: Analytic skills
14) Securities are ________ for the person who buys them, but are ________ for the individual or firm that issues them.
Answer: A
Ques Status: Previous Edition
AACSB: Reflective thinking skills
15) With ________ finance, borrowers obtain funds from lenders by selling them securities in the financial markets.
Answer: D
Ques Status: Previous Edition
16) With direct finance, funds are channeled through the financial market from the ________ directly to the ________.
Answer: A
Ques Status: Previous Edition
AACSB: Reflective thinking skills
17) Distinguish between direct finance and indirect finance. Which of these is the most important source of funds for corporations in the United States?
Answer: With direct finance, funds flow directly from the lender/saver to the borrower. With indirect finance, funds flow from the lender/saver to a financial intermediary who then channels the funds to the borrower/investor. Financial intermediaries (indirect finance) are the major source of funds for corporations in the U.S.
Ques Status: Previous Edition
AACSB: Reflective thinking skills
2.2 Structure of Financial Markets
1) Which of the following statements about the characteristics of debt and equity is false?
Answer: B
Ques Status: Previous Edition
AACSB: Reflective thinking skills
2) Which of the following statements about the characteristics of debt and equities is true?
Answer: A
Ques Status: Previous Edition
AACSB: Reflective thinking skills
3) Which of the following statements about financial markets and securities is true?
Answer: D
Ques Status: Previous Edition
AACSB: Reflective thinking skills
4) Which of the following is an example of an intermediate-term debt?
Answer: B
Ques Status: Previous Edition
AACSB: Analytic skills
5) If the maturity of a debt instrument is less than one year, the debt is called
Answer: A
Ques Status: Previous Edition
AACSB: Analytic skills
6) Long-term debt has a maturity that is
Answer: D
Ques Status: Previous Edition
7) When I purchase ________, I own a portion of a firm and have the right to vote on issues important to the firm and to elect its directors.
Answer: D
Ques Status: Previous Edition
AACSB: Analytic skills
8) Equity holders are a corporations ________. That means the corporation must pay all of its debt holders before it pays its equity holders.
Answer: C
Ques Status: Previous Edition
AACSB: Reflective thinking skills
9) Which of the following benefit directly from any increase in the corporations profitability?
Answer: C
Ques Status: Previous Edition
AACSB: Reflective thinking skills
10) A financial market in which previously issued securities can be resold is called a ________ market.
Answer: B
Ques Status: Previous Edition
11) An important financial institution that assists in the initial sale of securities in the primary market is the
Answer: A
Ques Status: Previous Edition
12) When an investment bank ________ securities, it guarantees a price for a corporations securities and then sells them to the public.
Answer: A
Ques Status: Previous Edition
13) Which of the following is not a secondary market?
Answer: D
Ques Status: Previous Edition
AACSB: Reflective thinking skills
14) ________ work in the secondary markets matching buyers with sellers of securities.
Answer: C
Ques Status: Previous Edition
15) A corporation acquires new funds only when its securities are sold in the
Answer: A
Ques Status: Previous Edition
AACSB: Reflective thinking skills
16) A corporation acquires new funds only when its securities are sold in the
Answer: B
Ques Status: Previous Edition
AACSB: Reflective thinking skills
17) An important function of secondary markets is to
Answer: A
Ques Status: Previous Edition
AACSB: Reflective thinking skills
18) Secondary markets make financial instruments more
Answer: C
Ques Status: Previous Edition
AACSB: Reflective thinking skills
19) A liquid asset is
Answer: A
Ques Status: Previous Edition
AACSB: Reflective thinking skills
20) The higher a securitys price in the secondary market the ________ funds a firm can raise by selling securities in the ________ market.
Answer: A
Ques Status: Previous Edition
AACSB: Reflective thinking skills
21) When secondary market buyers and sellers of securities meet in one central location to conduct trades the market is called a(n)
Answer: A
Ques Status: Previous Edition
22) In a(n) ________ market, dealers in different locations buy and sell securities to anyone who comes to them and is willing to accept their prices.
Answer: B
Ques Status: New
23) Forty or so dealers establish a market in these securities by standing ready to buy and sell them.
Answer: C
Ques Status: Previous Edition
24) Which of the following statements about financial markets and securities is true?
Answer: A
Ques Status: Previous Edition
AACSB: Reflective thinking skills
25) A financial market in which only short-term debt instruments are traded is called the ________ market.
Answer: B
Ques Status: Previous Edition
26) Equity instruments are traded in the ________ market.
Answer: C
Ques Status: Previous Edition
AACSB: Analytic skills
27) Because these securities are more liquid and generally have smaller price fluctuations, corporations and banks use the ________ securities to earn interest on temporary surplus funds.
Answer: A
Ques Status: New
AACSB: Reflective thinking skills
28) Corporations receive funds when their stock is sold in the primary market. Why do corporations pay attention to what is happening to their stock in the secondary market?
Answer: The existence of the secondary market makes their stock more liquid and the price in the secondary market sets the price that the corporation would receive if they choose to sell more stock in the primary market.
Ques Status: Previous Edition
AACSB: Reflective thinking skills
29) Describe the two methods of organizing a secondary market.
Answer: A secondary market can be organized as an exchange where buyers and sellers meet in one central location to conduct trades. An example of an exchange is the New York Stock Exchange. A secondary market can also be organized as an over-the-counter market. In this type of market, dealers in different locations buy and sell securities to anyone who comes to them and is willing to accept their prices. An example of an over-the-counter market is the federal funds market.
Ques Status: Previous Edition
2.3 Financial Market Instruments
1) Prices of money market instruments undergo the least price fluctuations because of
Answer: A
Ques Status: Previous Edition
AACSB: Reflective thinking skills
2) U.S. Treasury bills pay no interest but are sold at a ________. That is, you will pay a lower purchase price than the amount you receive at maturity.
Answer: D
Ques Status: Previous Edition
AACSB: Analytic skills
3) U.S. Treasury bills are considered the safest of all money market instruments because there is almost no risk of
Answer: B
Ques Status: Revised
AACSB: Analytic skills
4) A debt instrument sold by a bank to its depositors that pays annual interest of a given amount and at maturity pays back the original purchase price is called
Answer: B
Ques Status: Previous Edition
AACSB: Analytic skills
5) A short-term debt instrument issued by well-known corporations is called
Answer: A
Ques Status: Previous Edition
AACSB: Analytic skills
6) ________ are short-term loans in which Treasury bills serve as collateral.
Answer: A
Ques Status: Previous Edition
AACSB: Analytic skills
7) Collateral is ________ the lender receives if the borrower does not pay back the loan.
Answer: B
Ques Status: Previous Edition
AACSB: Analytic skills
8) Federal funds are
Answer: D
Ques Status: Previous Edition
AACSB: Analytic skills
9) The British Bankers Association average of interbank rates for dollar deposits in the London market is called the
Answer: A
Ques Status: Previous Edition
10) Which of the following are short-term financial instruments?
Answer: A
Ques Status: Previous Edition
AACSB: Analytic skills
11) Which of the following instruments are traded in a money market?
Answer: B
Ques Status: Previous Edition
AACSB: Analytic skills
12) Which of the following instruments are traded in a money market?
Answer: B
Ques Status: Previous Edition
AACSB: Analytic skills
13) Which of the following instruments is not traded in a money market?
Answer: A
Ques Status: Previous Edition
AACSB: Analytic skills
14) Bonds issued by state and local governments are called ________ bonds.
Answer: C
Ques Status: Previous Edition
15) Equity and debt instruments with maturities greater than one year are called ________ market instruments.
Answer: A
Ques Status: Previous Edition
16) Which of the following is a long-term financial instrument?
Answer: C
Ques Status: Previous Edition
AACSB: Analytic skills
17) Which of the following instruments are traded in a capital market?
Answer: A
Ques Status: Previous Edition
AACSB: Analytic skills
18) Which of the following instruments are traded in a capital market?
Answer: A
Ques Status: Previous Edition
AACSB: Analytic skills
19) Which of the following are not traded in a capital market?
Answer: C
Ques Status: Previous Edition
AACSB: Analytic skills
20) The most liquid securities traded in the capital market are
Answer: C
Ques Status: New
AACSB: Reflective thinking skills
2.4 Internationalization of Financial Markets
1) Equity of U.S. companies can be purchased by
Answer: C
Ques Status: Previous Edition
AACSB: Dynamics of the global economy
2) One reason for the extraordinary growth of foreign financial markets is
Answer: B
Ques Status: Previous Edition
AACSB: Dynamics of the global economy
3) Bonds that are sold in a foreign country and are denominated in the countrys currency in which they are sold are known as
Answer: A
Ques Status: Previous Edition
AACSB: Dynamics of the global economy
4) Bonds that are sold in a foreign country and are denominated in a currency other than that of the country in which it is sold are known as
Answer: B
Ques Status: Previous Edition
AACSB: Dynamics of the global economy
5) If Microsoft sells a bond in London and it is denominated in dollars, the bond is a
Answer: A
Ques Status: Previous Edition
AACSB: Dynamics of the global economy
6) U.S. dollar deposits in foreign banks outside the U.S. or in foreign branches of U.S. banks are called
Answer: B
Ques Status: Previous Edition
AACSB: Dynamics of the global economy
7) Distinguish between a foreign bond and a Eurobond.
Answer: A foreign bond is sold in a foreign country and priced in that countrys currency. A Eurobond is sold in a foreign country and priced in a currency that is not that countrys currency.
Ques Status: Previous Edition
AACSB: Dynamics of the global economy
2.5 Function of Financial Intermediaries: Indirect Finance
1) The process of indirect finance using financial intermediaries is called
Answer: B
Ques Status: Previous Edition
AACSB: Reflective thinking skills
2) In the United States, loans from ________ are far ________ important for corporate finance than are securities markets.
Answer: C
Ques Status: Previous Edition
AACSB: Reflective thinking skills
3) The time and money spent in carrying out financial transactions are called
Answer: D
Ques Status: Previous Edition
4) Economies of scale enable financial institutions to
Answer: A
Ques Status: Previous Edition
AACSB: Reflective thinking skills
5) An example of economies of scale in the provision of financial services is
Answer: D
Ques Status: Previous Edition
AACSB: Reflective thinking skills
6) Financial intermediaries provide customers with liquidity services. Liquidity services
Answer: A
Ques Status: Previous Edition
AACSB: Reflective thinking skills
7) The process where financial intermediaries create and sell low-risk assets and use the proceeds to purchase riskier assets is known as
Answer: A
Ques Status: Previous Edition
AACSB: Analytic skills
8) The process of asset transformation refers to the conversion of
Answer: C
Ques Status: Previous Edition
AACSB: Analytic skills
9) Reducing risk through the purchase of assets whose returns do not always move together is
Answer: A
Ques Status: Previous Edition
AACSB: Analytic skills
10) The concept of diversification is captured by the statement
Answer: B
Ques Status: Previous Edition
AACSB: Reflective thinking skills
11) Risk sharing is profitable for financial institutions due to
Answer: A
Ques Status: Previous Edition
AACSB: Reflective thinking skills
12) Typically, borrowers have superior information relative to lenders about the potential returns and risks associated with an investment project. The difference in information is called
Answer: C
Ques Status: Previous Edition
AACSB: Analytic skills
13) If bad credit risks are the ones who most actively seek loans and, therefore, receive them from financial intermediaries, then financial intermediaries face the problem of
Answer: B
Ques Status: Previous Edition
AACSB: Reflective thinking skills
14) The problem created by asymmetric information before the transaction occurs is called ________, while the problem created after the transaction occurs is called ________.
Answer: A
Ques Status: Previous Edition
15) Adverse selection is a problem associated with equity and debt contracts arising from
Answer: A
Ques Status: Previous Edition
AACSB: Reflective thinking skills
16) An example of the problem of ________ is when a corporation uses the funds raised from selling bonds to fund corporate expansion to pay for Caribbean cruises for all of its employees and their families.
Answer: B
Ques Status: Previous Edition
AACSB: Ethical understanding and reasoning abilities
17) Banks can lower the cost of information production by applying one information resource to many different services. This process is called
Answer: C
Ques Status: New
18) Conflicts of interest are a type of ________ problem that can happen when an institution provides multiple services.
Answer: D
Ques Status: New
AACSB: Ethical understanding and reasoning abilities
19) Studies of the major developed countries show that when businesses go looking for funds to finance their activities they usually obtain these funds from
Answer: C
Ques Status: Previous Edition
AACSB: Dynamics of the global economy
20) 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.
Answer: A
Ques Status: Previous Edition
AACSB: Dynamics of the global economy
21) Although the dominance of ________ over ________ is clear in all countries, the relative importance of bond versus stock markets differs widely.
Answer: A
Ques Status: Previous Edition
AACSB: Reflective thinking skills
22) Because there is an imbalance of information in a lending situation, we must deal with the problems of adverse selection and moral hazard. Define these terms and explain how financial intermediaries can reduce these problems.
Answer: Adverse selection is the asymmetric information problem that exists before the transaction occurs. For lenders, it is the difficulty in judging a good credit risk from a bad credit risk. Moral hazard is the asymmetric information problem that exists after the transaction occurs. For lenders, it is the difficulty in making sure the borrower uses the funds appropriately. Financial intermediaries can reduce adverse selection through intensive screening and can reduce moral hazard by monitoring the borrower.
Ques Status: Previous Edition
AACSB: Reflective thinking skills
2.6 Types of Financial Intermediaries
1) Financial institutions that accept deposits and make loans are called ________ institutions.
Answer: C
Ques Status: Previous Edition
2) Thrift institutions include
Answer: B
Ques Status: Previous Edition
AACSB: Analytic skills
3) Which of the following is a depository institution?
Answer: B
Ques Status: Previous Edition
AACSB: Analytic skills
4) Which of the following is a depository institution?
Answer: B
Ques Status: Previous Edition
AACSB: Analytic skills
5) Which of the following financial intermediaries is not a depository institution?
Answer: D
Ques Status: Previous Edition
AACSB: Analytic skills
6) The primary assets of credit unions are
Answer: C
Ques Status: Previous Edition
AACSB: Analytic skills
7) The primary liabilities of a commercial bank are
Answer: C
Ques Status: Previous Edition
AACSB: Analytic skills
8) The primary liabilities of depository institutions are
Answer: C
Ques Status: Previous Edition
AACSB: Analytic skills
9) ________ institutions are financial intermediaries that acquire funds at periodic intervals on a contractual basis.
Answer: B
Ques Status: Previous Edition
10) Which of the following is a contractual savings institution?
Answer: A
Ques Status: Previous Edition
AACSB: Analytic skills
11) Contractual savings institutions include
Answer: D
Ques Status: Previous Edition
AACSB: Analytic skills
12) Which of the following are not contractual savings institutions?
Answer: B
Ques Status: Previous Edition
AACSB: Analytic skills
13) Which of the following is not a contractual savings institution?
Answer: C
Ques Status: Previous Edition
AACSB: Analytic skills
14) The primary assets of a pension fund are
Answer: B
Ques Status: Previous Edition
AACSB: Analytic skills
15) Which of the following are investment intermediaries?
Answer: B
Ques Status: Previous Edition
AACSB: Analytic skills
16) An investment intermediary that lends funds to consumers is
Answer: A
Ques Status: Previous Edition
17) The primary assets of a finance company are
Answer: C
Ques Status: Previous Edition
AACSB: Analytic skills
18) ________ are financial intermediaries that acquire funds by selling shares to many individuals and using the proceeds to purchase diversified portfolios of stocks and bonds.
Answer: A
Ques Status: Previous Edition
AACSB: Analytic skills
19) Money market mutual fund shares function like
Answer: A
Ques Status: Previous Edition
AACSB: Reflective thinking skills
20) An important feature of money market mutual fund shares is
Answer: B
Ques Status: Previous Edition
AACSB: Reflective thinking skills
21) The primary assets of money market mutual funds are
Answer: C
Ques Status: Previous Edition
AACSB: Analytic skills
22) An investment bank helps ________ issue securities.
Answer: A
Ques Status: Previous Edition
AACSB: Analytic skills
23) An investment bank purchases securities from a corporation at a predetermined price and then resells them in the market. This process is called
Answer: A
Ques Status: Previous Edition
AACSB: Analytic skills
2.7 Regulation of the Financial System
1) Which of the following is not a goal of financial regulation?
Answer: D
Ques Status: Previous Edition
AACSB: Analytic skills
2) Increasing the amount of information available to investors helps to reduce the problems of ________ and ________ in the financial markets.
Answer: A
Ques Status: Previous Edition
AACSB: Reflective thinking skills
3) A goal of the Securities and Exchange Commission is to reduce problems arising from
Answer: D
Ques Status: Previous Edition
AACSB: Reflective thinking skills
4) The purpose of the disclosure requirements of the Securities and Exchange Commission is to
Answer: A
Ques Status: Previous Edition
AACSB: Reflective thinking skills
5) Government regulations to reduce the possibility of financial panic include all of the following except
Answer: A
Ques Status: Previous Edition
AACSB: Reflective thinking skills
6) Which of the following do not provide charters?
Answer: B
Ques Status: Previous Edition
AACSB: Analytic skills
7) A restriction on bank activities that was repealed in 1999 was
Answer: D
Ques Status: Previous Edition
AACSB: Reflective thinking skills
8) In order to reduce risk and increase the safety of financial institutions, commercial banks and other depository institutions are prohibited from
Answer: D
Ques Status: Previous Edition
AACSB: Reflective thinking skills
9) The primary purpose of deposit insurance is to
Answer: B
Ques Status: Previous Edition
AACSB: Reflective thinking skills
10) The agency that was created to protect depositors after the banking failures of 1930-1933 is the
Answer: B
Ques Status: Previous Edition
AACSB: Analytic skills
11) Savings and loan associations are regulated by the
Answer: D
Ques Status: Previous Edition
AACSB: Analytic skills
12) The regulatory agency that sets reserve requirements for all banks is
Answer: A
Ques Status: Previous Edition
AACSB: Analytic skills
13) Asymmetric information is a universal problem. This would suggest that financial regulations
Answer: C
Ques Status: Previous Edition
AACSB: Dynamics of the global economy
14) How do regulators help to ensure the soundness of financial intermediaries?
Answer: Regulators restrict who can set up a financial intermediary, conduct regular examinations, restrict assets, and provide insurance to help ensure the soundness of financial intermediaries.
Ques Status: Previous Edition
AACSB: Reflective thinking skills
Economics of Money, Banking, and Fin. Markets, 10e (Mishkin)
Chapter 4 Understanding Interest Rates
4.1 Measuring Interest Rates
1) The concept of ________ is based on the common-sense notion that a dollar paid to you in the future is less valuable to you than a dollar today.
Answer: A
Ques Status: Previous Edition
2) The present value of an expected future payment ________ as the interest rate increases.
Answer: A
Ques Status: Previous Edition
AACSB: Reflective thinking skills
3) An increase in the time to the promised future payment ________ the present value of the payment.
Answer: A
Ques Status: Previous Edition
AACSB: Reflective thinking skills
4) With an interest rate of 6 percent, the present value of $100 next year is approximately
Answer: C
Ques Status: Previous Edition
AACSB: Analytic skills
5) What is the present value of $500.00 to be paid in two years if the interest rate is 5 percent?
Answer: A
Ques Status: New
AACSB: Analytic skills
6) If a security pays $55 in one year and $133 in three years, its present value is $150 if the interest rate is
Answer: B
Ques Status: Previous Edition
AACSB: Analytic skills
7) To claim that a lottery winner who is to receive $1 million per year for twenty years has won $20 million ignores the process of
Answer: D
Ques Status: Previous Edition
AACSB: Analytic skills
8) A credit market instrument that provides the borrower with an amount of funds that must be repaid at the maturity date along with an interest payment is known as a
Answer: A
Ques Status: Previous Edition
9) A credit market instrument that requires the borrower to make the same payment every period until the maturity date is known as a
Answer: B
Ques Status: Previous Edition
10) Which of the following are true of fixed payment loans?
Answer: B
Ques Status: Previous Edition
AACSB: Reflective thinking skills
11) A fully amortized loan is another name for
Answer: B
Ques Status: Previous Edition
12) A credit market instrument that pays the owner a fixed coupon payment every year until the maturity date and then repays the face value is called a
Answer: C
Ques Status: Previous Edition
13) A ________ pays the owner a fixed coupon payment every year until the maturity date, when the ________ value is repaid.
Answer: C
Ques Status: Previous Edition
AACSB: Analytic skills
14) The ________ is the final amount that will be paid to the holder of a coupon bond.
Answer: C
Ques Status: Previous Edition
15) When talking about a coupon bond, face value and ________ mean the same thing.
Answer: A
Ques Status: Previous Edition
16) The dollar amount of the yearly coupon payment expressed as a percentage of the face value of the bond is called the bonds
Answer: A
Ques Status: Previous Edition
17) The ________ is calculated by multiplying the coupon rate times the par value of the bond.
Answer: C
Ques Status: New
AACSB: Analytic skills
18) If a $1000 face value coupon bond has a coupon rate of 3.75 percent, then the coupon payment every year is
Answer: A
Ques Status: New
AACSB: Analytic skills
19) If a $5,000 coupon bond has a coupon rate of 13 percent, then the coupon payment every year is
Answer: A
Ques Status: Previous Edition
AACSB: Analytic skills
20) An $8,000 coupon bond with a $400 coupon payment every year has a coupon rate of
Answer: A
Ques Status: Previous Edition
AACSB: Analytic skills
21) A $1000 face value coupon bond with a $60 coupon payment every year has a coupon rate of
Answer: C
Ques Status: New
AACSB: Analytic skills
22) All of the following are examples of coupon bonds except
Answer: B
Ques Status: Previous Edition
AACSB: Analytic skills
23) A bond that is bought at a price below its face value and the face value is repaid at a maturity date is called a
Answer: D
Ques Status: Previous Edition
24) A ________ is bought at a price below its face value, and the ________ value is repaid at the maturity date.
Answer: D
Ques Status: Previous Edition
AACSB: Analytic skills
25) A discount bond
Answer: B
Ques Status: Previous Edition
AACSB: Reflective thinking skills
26) Examples of discount bonds include
Answer: A
Ques Status: Previous Edition
AACSB: Analytic skills
27) Which of the following are true for discount bonds?
Answer: B
Ques Status: Previous Edition
AACSB: Reflective thinking skills
28) The interest rate that equates the present value of payments received from a debt instrument with its value today is the
Answer: C
Ques Status: Previous Edition
29) Economists consider the ________ to be the most accurate measure of interest rates.
Answer: C
Ques Status: Previous Edition
AACSB: Reflective thinking skills
30) For simple loans, the simple interest rate is ________ the yield to maturity.
Answer: C
Ques Status: Previous Edition
31) If the amount payable in two years is $2420 for a simple loan at 10 percent interest, the loan amount is
Answer: C
Ques Status: Previous Edition
AACSB: Analytic skills
32) For a 3-year simple loan of $10,000 at 10 percent, the amount to be repaid is
Answer: D
Ques Status: Previous Edition
AACSB: Analytic skills
33) If $22,050 is the amount payable in two years for a $20,000 simple loan made today, the interest rate is
Answer: A
Ques Status: Previous Edition
AACSB: Analytic skills
34) If a security pays $110 next year and $121 the year after that, what is its yield to maturity if it sells for $200?
Answer: B
Ques Status: Previous Edition
AACSB: Analytic skills
35) The present value of a fixed-payment loan is calculated as the ________ of the present value of all cash flow payments.
Answer: A
Ques Status: Previous Edition
AACSB: Analytic skills
36) Which of the following are true for a coupon bond?
Answer: A
Ques Status: Previous Edition
AACSB: Reflective thinking skills
37) The ________ of a coupon bond and the yield to maturity are inversely related.
Answer: A
Ques Status: New
AACSB: Reflective thinking skills
38) The price of a coupon bond a
Once the order is placed, the order will be delivered to your email less than 24 hours, mostly within 4 hours.
If you have questions, you can contact us here