1、【单选题】every financial market performs the following function: _________ a、it determines the level of interest rates. b、it allows common stock to be traded. c、it allows loans to be made. d、it channels funds from lenders-savers to borrowers-spenders.
2、【单选题】financial markets have the basic function of _________ a、bringing together people with funds to lend and people who want to borrow funds. b、assuring that the swings in the business cycle are less pronounced. c、assuring that governments need never resort to printing money. d、both a and b of the above. e、both b and c of the above.
3、【单选题】which of the following can be described as involving direct finance? a、a corporation's stock is traded in an over-the-counter market. b、people buy shares in a mutual fund. c、a pension fund manager buys commercial paper in the secondary market. d、an insurance company buys shares of common stock in the over-the-counter markets. e、none of the above.
4、【单选题】which of the following can be described as involving direct finance? a、a corporation's stock is traded in an over-the-counter market. b、a corporation buys commercial paper issued by another corporation. c、a pension fund manager buys commercial paper from the issuing corporation. d、both a and b of the above. e、both b and c of the above.
5、【单选题】which of the following can be described as involving indirect finance? a、a corporation takes out loans from a bank. b、people buy shares in a mutual fund. c、a corporation buys commercial paper in a secondary market. d、all of the above. e、only a and b of the above.
6、【单选题】which of the following can be described as involving indirect finance? a、a bank buys a u.s. treasury bill from one of its depositors. b、a corporation buys commercial paper issued by another corporation. c、a pension fund manager buys commercial paper in the primary market. d、both a and c of the above.
7、【单选题】financial markets improve economic welfare because _________ a、they allow funds to move from those without productive investment opportunities to those who have such opportunities. b、they allow consumers to time their purchases better. c、they weed out inefficient firms. d、they do all of the above. e、they do a and b of the above.
8、【单选题】a country whose financial markets function poorly is likely to _________ a、efficiently allocate its capital resources. b、enjoy high productivity. c、experience economic hardship and financial crises. d、increase its standard of living.
9、【单选题】which of the following are securities? a、a certificate of deposit b、a share of texaco common stock c、a treasury bill d、all of the above e、only a and b of the above
10、【单选题】which of the following statements about the characteristics of debt and equity are true? a、they both can be long-term financial instruments. b、they both involve a claim on the issuer's income. c、they both enable a corporation to raise funds. d、all of the above. e、only a and b of the above.
11、【单选题】the money market is the market in which _________ are traded. a、new issues of securities b、previously issued securities c、short-term debt instruments d、long-term debt and equity instruments
12、【单选题】long-term debt and equity instruments are traded in the _________ market. a、primary b、secondary c、capital d、money
13、【单选题】which of the following are primary markets? a、the new york stock exchange b、the u.s. government bond market c、the over-the-counter stock market d、the options markets e、none of the above
14、【单选题】which of the following are secondary markets? a、the new york stock exchange b、the u.s. government bond market c、the over-the-counter stock market d、the options markets e、all of the above
15、【单选题】a corporation acquires new funds only when its securities are sold in the _________ a、secondary market by an investment bank. b、primary market by an investment bank. c、secondary market by a stock exchange broker. d、secondary market by a commercial bank.
16、【单选题】intermediaries who are agents of investors and match buyers with sellers of securities are called _________ a、investment bankers. b、traders. c、brokers. d、dealers. e、none of the above.
17、【单选题】intermediaries who link buyers and sellers by buying and selling securities at stated prices are called _________ a、investment bankers. b、traders. c、brokers. d、dealers. e、none of the above.
18、【单选题】an important financial institution that assists in the initial sale of securities in the primary market is the _________ a、investment bank. b、commercial bank. c、stock exchange. d、brokerage house.
19、【单选题】which of the following statements about financial markets and securities are true? a、most common stocks are traded over-the-counter, although the largest corporations have their shares traded at organized stock exchanges such as the new york stock exchange. b、a corporation acquires new funds only when its securities are sold in the primary market. c、money market securities are usually more widely traded than longer-term securities and so tend to be more liquid. d、all of the above are true. e、only a and b of the above are true.
20、【单选题】which of the following statements about financial markets and securities are true? 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 long term if its maturity is ten years or longer. d、the maturity of a debt instrument is the time (term) that has elapsed since it was issued.
21、【单选题】which of the following statements about financial markets and securities are true? a、few common stocks are traded over-the-counter, although the over-the-counter markets have grown in recent years. b、a corporation acquires new funds only when its securities are sold in the primary market. c、capital market securities are usually more widely traded than longer term securities and so tend to be more liquid. d、all of the above are true. e、only a and b of the above are true.
22、【单选题】which of the following markets is sometimes organized as an over-the-counter market? a、the stock market b、the bond market c、the foreign exchange market d、the federal funds market e、all of the above
23、【单选题】bonds that are sold in a foreign country and are denominated in that country's currency are known as _________ a、foreign bonds. b、eurobonds. c、eurocurrencies. d、eurodollars.
24、【单选题】bonds that are sold in a foreign country and are denominated in a currency other than that of the country in which they are sold are known as _________ a、foreign bonds. b、eurobonds. c、eurocurrencies. d、eurodollars.
25、【单选题】financial intermediaries _________ a、exist because there are substantial information and transaction costs in the economy. b、improve the lot of the small saver. c、are involved in the process of indirect finance. d、do all of the above. e、do only a and b of the above.
26、【单选题】the main sources of financing for businesses, in order of importance, are _________ a、financial intermediaries, issuing bonds, issuing stocks. b、issuing bonds, issuing stocks, financial intermediaries. c、issuing stocks, issuing bonds, financial intermediaries. d、issuing stocks, financial intermediaries, issuing bonds.
27、【单选题】the presence of transaction costs in financial markets explains, in part, why _________ a、financial intermediaries and indirect finance play such an important role in financial markets. b、equity and bond financing play such an important role in financial markets. c、corporations get more funds through equity financing than they get from financial intermediaries. d、direct financing is more important than indirect financing as a source of funds.
28、【单选题】financial intermediaries can substantially reduce transaction costs per dollar of transactions because their large size allows them to take advantage of _________ a、poorly informed consumers. b、standardization. c、economies of scale. d、their market power.
29、【单选题】the purpose of diversification is to _________ a、reduce the volatility of a portfolio b、raise the volatility of a portfolio c、reduce the average return on a portfolio. d、raise the average return on a portfolio.
30、【单选题】an investor who puts all her funds into one asset _________ her portfolio's _________ a、increases; diversification b、decreases; diversification c、increases; average return d、decreases; average return
31、【单选题】through risk-sharing activities, a financial intermediary _________ its own risk and _________ the risks of its customers. a、reduces; increases b、increases; reduces c、reduces; reduces d、increases; increases
32、【单选题】the presence of _________ in financial markets leads to adverse selection and moral hazard problems that interfere with the efficient functioning of financial markets. a、noncollateralized risk b、free-riding c、asymmetric information d、costly state verification
33、【单选题】when the lender and the borrower have different amounts of information regarding a transaction, _________ is said to exist. a、asymmetric information b、adverse selection c、moral hazard d、fraud
34、【单选题】when the potential borrowers who are the most likely to default are the ones most actively seeking a loan, _________ is said to exist. a、asymmetric information b、adverse selection c、moral hazard d、fraud
35、【单选题】when the borrower engages in activities that make it less likely that the loan will be repaid, _________ is said to exist. a、asymmetric information b、adverse selection c、moral hazard d、fraud
36、【单选题】the concept of adverse selection helps to explain _________ a、which firms are more likely to obtain funds from banks and other financial intermediaries, rather than from the securities markets. b、why indirect finance is more important than direct finance as a source of business finance. c、why direct finance is more important than indirect finance as a source of business finance. d、only a and b of the above. e、only a and c of the above.
37、【单选题】adverse selection is a problem associated with equity and debt contracts arising from _________ a、the lender's relative lack of information about the borrower's potential returns and risks of his investment activities. b、the lender's inability to legally require sufficient collateral to cover a 100 percent loss if the borrower defaults. c、the borrower d、none of the above.
38、【单选题】when the least desirable credit risks are the ones most likely to seek loans, lenders are subject to the _________ a、moral hazard problem. b、adverse selection problem. c、shirking problem. d、free-rider problem. e、principal-agent problem.
39、【单选题】financial institutions expect that _________ a、moral hazard will occur, as the least desirable credit risks will be the ones most likely to seek out loans. b、opportunistic behavior will occur, as the least desirable credit risks will be the ones most likely to seek out loans. c、borrowers will commit moral hazard by taking on too much risk, and this is what drives financial institutions to take steps to limit moral hazard. d、none of the above will occur.
40、【单选题】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 panics.
41、【单选题】in financial markets, lenders typically have inferior information about potential returns and risks associated with any investment project. this difference in information is called _________ a、comparative informational disadvantage. b、asymmetric information. c、variant information. d、caveat venditor.
42、【单选题】the largest depository institution at the end of 2004 was _________ a、life insurance companies. b、pension funds. c、state retirement funds. d、none of the above.
43、【单选题】which of the following financial intermediaries are depository institutions? a、a savings and loan association b、a commercial bank c、a credit union d、all of the above e、only a and c of the above
44、【单选题】which of the following is a contractual savings institution? a、a life insurance company b、a credit union c、a savings and loan association d、a mutual fund
45、【单选题】which of the following are not investment intermediaries? a、a life insurance company b、a pension fund c、a mutual fund d、only a and b of the above
46、【单选题】which of the following are investment intermediaries? a、finance companies b、mutual funds c、pension funds d、all of the above e、only a and b of the above
47、【单选题】the government regulates financial markets for three main reasons: _________ a、to ensure soundness of the financial system, to improve control of monetary policy, and to increase the information available to investors. b、to improve control of monetary policy, to ensure that financial intermediaries earn a normal rate of return, and to increase the information available to investors. c、to ensure that financial intermediaries do not earn more than the normal rate of return, to ensure soundness of the financial system, and to improve control of monetary policy. d、to ensure soundness of financial intermediaries, to increase the information available to investors, and to prevent financial intermediaries from earning less than the normal rate of return.
48、【单选题】which of the following government regulations has the chief purpose of improving control of the money supply? a、deposit insurance b、restrictions on entry into banking or insurance c、reserve requirements d、restrictions on the assets financial intermediaries can hold
49、【单选题】asymmetric information can lead to widespread collapse of financial intermediaries, referred to as a _________ a、bank holiday. b、financial panic. c、financial disintermediation. d、financial collapse.
50、【单选题】foreign currencies that are deposited in banks outside the home country are known as _________ a、foreign bonds. b、eurobond. c、eurocurrencies. d、eurodollars.
51、【单选题】u.s. dollars deposited in foreign banks outside the united states or in foreign branches of u.s. are referred to as _________ a、eurodollars. b、eurocurrencies. c、eurobonds. d、foreign bonds.
52、【单选题】banks providing depositors with checking accounts that enable them to pay their bills easily is known as _________ a、liquidity services. b、asset transformation. c、risk sharing. d、transaction costs.
53、【单选题】a ________ is when one party in a financial contract has incentives to act in its own interest rather than in the interests of the other party. a、moral hazard b、risk c、conflict of interest d、financial panic
54、【单选题】fire and casualty insurance companies are what type of intermediary? a、contractual savings institution b、depository institutions c、investment intermediaries d、none of the above
55、【单选题】the country whose banks are the most restricted in the range of assets they may hold is _________ a、japan. b、canada. c、germany. d、the united states.
56、【判断题】every financial market allows loans to be made.
57、【判断题】an example of direct financing is if you were to lend money to your neighbor.
58、【判断题】the new york stock exchange is an example of a primary market.
59、【判断题】a bond denominated in euros and issued in a country that uses the euro as its currency is an example of a eurobond.
60、【判断题】most people's involvement with the financial system is through financial intermediaries rather than financial markets.
61、【判断题】a financial intermediary's risk-sharing activities are also referred to as asset transformation.
62、【判断题】the process of financial intermediation is also known as direct finance.
63、【判断题】a mutual fund is not a depository institution.
64、【判断题】a pension fund is not a contractual savings institution.
65、【判断题】equity represents an ownership interest in a firm and entitles the holder to the residual cash flows.
66、【判断题】adverse selection refers to those most at risk being most aggressive in their search for funds.
67、【判断题】the capital market is a financial market in which only short-term debt instruments (generally those with original maturity of less than one year) are traded.
68、【判断题】american investors pay attention to only the dow jones industrial average.
69、【判断题】the government agency that insures each depositor at a commercial bank, savings and loan association, or mutual savings bank up to a loss of $100,000 per account ($250,000 for individual retirement accounts) is the securities and exchange commission (sec).
2.3课后作业
1、【单选题】a loan that requires the borrower to make the same payment every period until the maturity date is called a _________ a、simple loan. b、fixed-payment loan. c、discount loan. d、same-payment loan. e、none of the above.
2、【单选题】a coupon bond pays the owner of the bond _________ a、the same amount every month until maturity date. b、a fixed interest payment every period and repays the face value at the maturity date. c、the face value of the bond plus an interest payment once the maturity date has been reached. d、the face value at the maturity date. e、none of the above.
3、【单选题】a bond's future payments are called its _________ a、cash flows. b、maturity values. c、discounted present values. d、yields to maturity.
4、【单选题】a credit market instrument that pays the owner the face value of the security at the maturity date and nothing prior to then is called a _________ a、simple loan. b、fixed-payment loan. c、coupon bond. d、discount bond.
5、【单选题】(i) a simple loan requires the borrower to repay the principal at the maturity date along with an interest payment. (ii) a discount bond is bought at a price below its face value, and the face value is repaid at the maturity date. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
6、【单选题】which of the following are true of coupon bonds? a、the owner of a coupon bond receives a fixed interest payment every year until the maturity date, when the face or par value is repaid. b、u.s. treasury bonds and notes are examples of coupon bonds. c、corporate bonds are examples of coupon bonds. d、all of the above. e、only a and b of the above.
7、【单选题】which of the following are generally true of all bonds? a、the longer a bond's maturity, the lower is the rate of return that occurs as a result of the increase in an interest rate. b、even though a bond has a substantial initial interest rate, its return can turn out to be negative if interest rates rise. c、prices and returns for long-term bonds are more volatile than those for shorter-term bonds. d、all of the above are true. e、only a and b of the above are true.
8、【单选题】(i) a discount bond requires the borrower to repay the principal at the maturity date plus an interest payment. (ii) a coupon bond pays the lender a fixed interest payment every year until the maturity date, when a specified final amount (face or par value) is repaid. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
9、【单选题】if a $5,000 coupon bond has a coupon rate of 13 percent, then the coupon payment every year is _________. a、$650. b、$1,300. c、$130. d、$13. e、none of the above.
10、【单选题】an $8,000 coupon bond with a $400 annual coupon payment has a coupon rate of _________ a、5 percent. b、8 percent. c、10 percent. d、40 percent.
11、【单选题】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. a、present value b、future value c、interest d、deflation
12、【单选题】dollars received in the future are worth _________ than dollars received today. the process of calculating what dollars received in the future are worth today is called _________ a、more; discounting. b、less; discounting. c、more; inflating. d、less; inflating.
13、【单选题】the process of calculating what dollars received in the future are worth today is called _________ a、calculating the yield to maturity. b、discounting the future. c、compounding the future. d、compounding the present.
14、【单选题】with an interest rate of 5 percent, the present value of $100 received one year from now is approximately _________ a、$100. b、$105. c、$95. d、$90.
15、【单选题】with an interest rate of 10 percent, the present value of a security that pays $1,100 next year and $1,460 four years from now is approximately _________ a、$1,000. b、$2,000. c、$2,560. d、$3,000.
16、【单选题】with an interest rate of 8 percent, the present value of $100 received one year from now is approximately _________ a、$93. b、$96. c、$100. d、$108.
17、【单选题】with an interest rate of 6 percent, the present value of $100 received one year from now is approximately _________ a、$106. b、$100. c、$94. d、$92.
18、【单选题】the interest rate that equates the present value of the cash flow received from a debt instrument with its market price today is the _________ a、simple interest rate. b、discount rate. c、yield to maturity. d、real interest rate.
19、【单选题】the interest rate that financial economists consider to be the most accurate measure is the _________ a、current yield. b、yield to maturity. c、yield on a discount basis. d、coupon rate.
20、【单选题】financial economists consider the _________ to be the most accurate measure of interest rates. a、simple interest rate b、discount rate c、yield to maturity d、real interest rate
21、【单选题】for a simple loan, the simple interest rate equals the _________ a、real interest rate. b、nominal interest rate. c、current yield. d、yield to maturity.
22、【单选题】for simple loans, the simple interest rate is _________ the yield to maturity. a、greater than b、less than c、equal to d、not comparable to
23、【单选题】the yield to maturity of a one-year, simple loan of $500 that requires an interest payment of $40 is _________ a、5 percent. b、8 percent. c、12 percent. d、12.5 percent.
24、【单选题】the yield to maturity of a one-year, simple loan of $400 that requires an interest payment of $50 is _________ a、5 percent. b、8 percent. c、12 percent. d、12.5 percent.
25、【单选题】a $10,000, 8 percent coupon bond that sells for $10,000 has a yield to maturity of _________ a、8 percent. b、10 percent. c、12 percent. d、14 percent.
26、【单选题】which of the following $1,000 face value securities has the highest yield to maturity? a、a 5 percent coupon bond selling for $1,000 b、a 10 percent coupon bond selling for $1,000 c、a 12 percent coupon bond selling for $1,000 d、a 12 percent coupon bond selling for $1,100
27、【单选题】which of the following $1,000 face value securities has the highest yield to maturity? a、a 5 percent coupon bond selling for $1,000 b、a 10 percent coupon bond selling for $1,000 c、a 15 percent coupon bond selling for $1,000 d、a 15 percent coupon bond selling for $900
28、【单选题】which of the following are true for a coupon bond? a、when the coupon bond is priced at its face value, the yield to maturity equals the coupon rate. b、the price of a coupon bond and the yield to maturity are negatively related. c、the yield to maturity is greater than the coupon rate when the bond price is below the par value. d、all of the above are true. e、only a and b of the above are true.
29、【单选题】which of the following are true for a coupon bond? a、when the coupon bond is priced at its face value, the yield to maturity equals the coupon rate. b、the price of a coupon bond and the yield to maturity are negatively related. c、the yield to maturity is greater than the coupon rate when the bond price is above the par value. d、all of the above are true. e、only a and b of the above are true.
30、【单选题】which of the following are true for a coupon bond? a、when the coupon bond is priced at its face value, the yield to maturity equals the coupon rate. b、the price of a coupon bond and the yield to maturity are positively related. c、the yield to maturity is greater than the coupon rate when the bond price is above the par value. d、all of the above are true. e、only a and b of the above are true.
31、【单选题】a consol bond is a bond that _________ a、pays interest annually and its face value at maturity. b、pays interest in perpetuity and never matures. c、pays no interest but pays face value at maturity. d、rises in value as its yield to maturity rises.
32、【单选题】the yield to maturity on a consol bond that pays $100 yearly and sells for $500 is _________ a、5 percent. b、10 percent. c、12.5 percent. d、20 percent. e、25 percent.
33、【单选题】the yield to maturity on a consol bond that pays $200 yearly and sells for $1000 is _________ a、5 percent. b、10 percent. c、20 percent. d、25 percent.
34、【单选题】a frequently used approximation for the yield to maturity on a long-term bond is the _________ a、coupon rate. b、current yield. c、cash flow interest rate. d、real interest rate.
35、【单选题】the current yield on a coupon bond is the bond's _________ divided by its _________ a、annual coupon payment; price b、annual coupon payment; face value c、annual return; price d、annual return; face value
36、【单选题】when a bond's price falls, its yield to maturity _________ and its current yield _________ a、falls; falls b、rises; rises c、falls; rises d、rises; falls
37、【单选题】the yield to maturity for a one-year discount bond equals _________ a、the increase in price over the year, divided by the initial price. b、the increase in price over the year, divided by the face value. c、the increase in price over the year, divided by the interest rate. d、none of the above.
38、【单选题】if a $10,000 face value discount bond maturing in one year is selling for $8,000, then its yield to maturity is _________ a、10 percent. b、20 percent. c、25 percent. d、40 percent.
39、【单选题】if a $10,000 face value discount bond maturing in one year is selling for $9,000, then its yield to maturity is _________ a、9 percent. b、10 percent. c、11 percent. d、12 percent.
40、【单选题】if a $10,000 face value discount bond maturing in one year is selling for $5,000, then its yield to maturity is _________ a、5 percent. b、10 percent. c、50 percent. d、100 percent.
41、【单选题】if a $5,000 face value discount bond maturing in one year is selling for $5,000, then its yield to maturity is _________ a、0 percent. b、5 percent. c、10 percent. d、20 percent.
42、【单选题】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 nominal interest rate equals the real interest rate less the expected rate of inflation. d、both a and b of the above are true. e、both a and c of the above are true.
43、【单选题】if you expect the inflation rate to be 15 percent next year and a one-year bond has a yield to maturity of 7 percent, then the real interest rate on this bond is _________ a、7 percent. b、22 percent. c、-15 percent. d、-8 percent. e、none of the above.
44、【单选题】if you expect the inflation rate to be 5 percent next year and a one-year bond has a yield to maturity of 7 percent, then the real interest rate on this bond is _________ a、-12 percent. b、-2 percent. c、2 percent. d、12 percent.
45、【单选题】the nominal interest rate minus the expected rate of inflation _________ a、defines the real interest rate. b、is a better measure of the incentives to borrow and lend than is the nominal interest rate. c、is a more accurate indicator of the tightness of credit market conditions than is the nominal interest rate. d、all of the above. e、only a and b of the above.
46、【单选题】the nominal interest rate minus the expected rate of inflation _________ a、defines the real interest rate. b、is a less accurate measure of the incentives to borrow and lend than is the nominal interest rate. c、is a less accurate indicator of the tightness of credit market conditions than is the nominal interest rate. d、defines the discount rate.
47、【单选题】in which of the following situations would you prefer to be making a loan? a、the interest rate is 9 percent and the expected inflation rate is 7 percent. b、the interest rate is 4 percent and the expected inflation rate is 1 percent. c、the interest rate is 13 percent and the expected inflation rate is 15 percent. d、the interest rate is 25 percent and the expected inflation rate is 50 percent.
48、【单选题】in which of the following situations would you prefer to be borrowing? a、the interest rate is 9 percent and the expected inflation rate is 7 percent. b、the interest rate is 4 percent and the expected inflation rate is 1 percent. c、the interest rate is 13 percent and the expected inflation rate is 15 percent. d、the interest rate is 25 percent and the expected inflation rate is 50 percent.
49、【单选题】what is the return on a 5 percent coupon bond that initially sells for $1,000 and sells for $1,200 one year later? a、5 percent b、10 percent c、-5 percent d、25 percent e、none of the above
50、【单选题】what is the return on a 5 percent coupon bond that initially sells for $1,000 and sells for $900 one year later? a、5 percent b、10 percent c、-5 percent d、-10 percent e、none of the above
51、【单选题】the return on a 5 percent coupon bond that initially sells for $1,000 and sells for $1,100 one year later is _________ a、5 percent. b、10 percent. c、14 percent. d、15 percent.
52、【单选题】the return on a 10 percent coupon bond that initially sells for $1,000 and sells for $900 one year later is _________ a、-10 percent. b、-5 percent. c、0 percent. d、5 percent.
53、【单选题】which of the following are generally true of all bonds? a、the only bond whose return equals the initial yield to maturity is one whose time to maturity is the same as the holding period. b、a rise in interest rates is associated with a fall in bond prices, resulting in capital losses on bonds whose term to maturities are longer than the holding period. c、the longer a bond's maturity, the greater is the price change associated with a given interest rate change. d、all of the above are true. e、only a and b of the above are true.
54、【单选题】which of the following are true concerning the distinction between interest rates and return? a、the rate of return on a bond will not necessarily equal the interest rate on that bond. b、the return can be expressed as the sum of the current yield and the rate of capital gains. c、the rate of return will be greater than the interest rate when the price of the bond falls between time t and time t 1. d、all of the above are true. e、only a and b of the above are true.
55、【单选题】if the interest rates on all bonds rise from 5 to 6 percent over the course of the year, which bond would you prefer to have been holding? a、a bond with one year to maturity b、a bond with five years to maturity c、a bond with ten years to maturity d、a bond with twenty years to maturity
56、【单选题】suppose you are holding a 5 percent coupon bond maturing in one year with a yield to maturity of 15 percent. if the interest rate on one-year bonds rises from 15 percent to 20 percent over the course of the year, what is the yearly return on the bond you are holding? a、5 percent b、10 percent c、15 percent d、20 percent
57、【单选题】(i) prices of longer-maturity bonds respond more dramatically to changes in interest rates. (ii) prices and returns for long-term bonds are less volatile than those for short-term bonds. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
58、【单选题】(i) prices of longer-maturity bonds respond less dramatically to changes in interest rates. (ii) prices and returns for long-term bonds are less volatile than those for shorter-term bonds. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
59、【单选题】the riskiness of an asset's return that results from interest rate changes is called _________ a、interest-rate risk. b、coupon-rate risk. c、reinvestment risk. d、yield-to-maturity risk.
60、【单选题】if an investor's holding period is longer than the term to maturity of a bond, he or she is exposed to _________ a、interest-rate risk. b、reinvestment risk. c、bond-market risk. d、yield-to-maturity risk.
61、【单选题】reinvestment risk is the risk that _________ a、a bond b、a bond's future coupon payments may have to be invested at a rate lower than the bond's yield to maturity. c、an investor's holding period will be short and equal in length to the maturity of the bonds he or she holds. d、a bond's issuer may fail to make the future coupon payments and an investor will have no cash to reinvest.
62、【单选题】(i) the average lifetime of a debt security's stream of payments is called duration. (ii) the duration of a portfolio is the weighted average of the durations of the individual securities, with the weights reflecting the proportion of the portfolio invested in each. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
63、【单选题】the duration of a ten-year, 10 percent coupon bond when the interest rate is 10 percent is 6.76 years. what happens to the price of the bond if the interest rate falls to 8 percent? a、it rises 20 percent b、it rises 12.3 percent c、it falls 20 percent d、it falls 12.3 percent
64、【单选题】when the lender provides the borrower with an amount of funds that must be repaid to the lender at the maturity date, along with an additional payment for the interest, it is called a ______ a、fixed-payment loan b、discount loan c、simple loan d、none of the above
65、【单选题】a discount bond _________ a、is also called a coupon bond. b、is also called a zero-coupon bond. c、is also called a fixed-payment bond. d、is also called a corporate bond.
66、【单选题】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.
67、【单选题】the change in the bond's price relative to the initial purchase price is _________ a、the current yield. b、coupon payment. c、yield to maturity. d、rate of capital gain.
68、【单选题】the return on a bond is equal to the yield to maturity when _________ a、the holding period is longer than the maturity of the bond. b、the maturity of the bond is longer than the holding period. c、the holding period and the maturity of the bond are identical. d、none of the above.
69、【单选题】bonds whose term to maturity is shorter than the holding period are also subject to _________ a、default. b、reinvestment risk. c、both of the above. d、none of the above.
70、【单选题】a _____ is a type of loan that has the same cash flow payment every year throughout the life of the loan. a、discount loan b、simple loan c、fixed-payment loan d、interest-free loan
71、【判断题】a bond's current market value is equal to the present value of the coupon payments plus the present value of the face amount.
72、【判断题】discounting the future is the procedure used to find the future value of a dollar received today.
73、【判断题】the current yield is the best measure of an investor's return from holding a bond.
74、【判断题】unless a bond defaults, an investor cannot lose money investing in bonds.
75、【判断题】the current yield is the yearly coupon payment divided by the current market price.
76、【判断题】prices for long-term bonds are more volatile than for shorter-term bonds.
77、【判断题】a long-term bond's price is less affected by interest rate movements than is a short-term bond's price.
78、【判断题】increasing duration implies that interest-rate risk has increased.
79、【判断题】all else being equal, the greater the interest rate the greater is the duration.
80、【判断题】interest-rate risk is the uncertainty that an investor faces because the interest rate at which a bond's future coupon payments can be invested is unknown.
81、【判断题】the real interest rate is equal to the nominal rate minus inflation.
82、【判断题】the current yield goes up as the price of a bond falls.
83、【判断题】changes in interest rates make investments in long-term bonds risky.
84、【判断题】bonds with a maturity that is longer than the holding period have no interest-rate risk.
3.3课后作业
1、【单选题】as the price of a bond _________ and the expected return _________, bonds become more attractive to investors and the quantity demanded rises. a、falls; rises b、falls; falls c、rises; rises d、rises; falls
2、【单选题】the supply curve for bonds has the usual upward slope, indicating that as the price _________, ceteris paribus, the _________ increases. a、falls; supply b、falls; quantity supplied c、rises; supply d、rises; quantity supplied
3、【单选题】when the price of a bond is above the equilibrium price, there is excess _________ in the bond market and the price will _________ a、demand; rise b、demand; fall c、supply; fall d、supply; rise
4、【单选题】when the price of a bond is below the equilibrium price, there is excess _________ in the bond market and the price will _________ a、demand; rise b、demand; fall c、supply; fall d、supply; rise
5、【单选题】when the price of a bond is _________ the equilibrium price, there is an excess supply of bonds and the price will _________ a、above; rise b、above; fall c、below; fall d、below; rise
6、【单选题】when the price of a bond is _________ the equilibrium price, there is an excess demand for bonds and the price will _________ a、above; rise b、above; fall c、below; fall d、below; rise
7、【单选题】when the interest rate on a bond is above the equilibrium interest rate, there is excess _________ in the bond market and the interest rate will _________ a、demand; rise b、demand; fall c、supply; fall d、supply; rise
8、【单选题】when the interest rate on a bond is below the equilibrium interest rate, there is excess _________ in the bond market and the interest rate will _________ a、demand; rise b、demand; fall c、supply; fall d、supply; rise
9、【单选题】when the interest rate on a bond is _________ the equilibrium interest rate, there is excess _________ in the bond market and the interest rate will _________ a、above; demand; fall b、above; demand; rise c、below; supply; fall d、above; supply; rise
10、【单选题】when the interest rate on a bond is _________ the equilibrium interest rate, there is excess _________ in the bond market and the interest rate will _________ a、below; demand; rise b、below; demand; fall c、below; supply; rise d、above; supply; fall
11、【单选题】when the demand for bonds _________ or the supply of bonds _________, interest rate rise. a、increases; increases b、increases; decreases c、decreases; decreases d、decreases; increases
12、【单选题】when the demand for bonds _________ or the supply of bonds _________, interest rates fall. a、increases; increases b、increases; decreases c、decreases; decreases d、decreases; increases
13、【单选题】when the demand for bonds _________ or the supply of bonds _________, bond prices rise. a、increases; decreases b、decreases; increases c、decreases; decreases d、increases; increases
14、【单选题】when the demand for bonds _________ or the supply of bonds _________, bond prices fall. a、increases; increases b、increases; decreases c、decreases; decreases d、decreases; increases
15、【单选题】factors that determine the demand for an asset include changes in the ________ a、wealth of investors. b、liquidity of bonds relative to alternative assets. c、expected returns on bonds relative to alternative assets. d、risk of bonds relative to alternative assets. e、all of the above.
16、【单选题】the demand for an asset rises if _________ falls. a、risk relative to other assets b、expected return relative to other assets c、liquidity relative to other assets d、wealth
17、【单选题】the higher the standard deviation of returns on an asset, the _________ is the asset's _________ a、greater; risk b、smaller; risk c、greater; expected return d、smaller; expected return
18、【单选题】diversification benefits an investor by ________ a、increasing wealth. b、increasing expected return. c、reducing risk. d、increasing liquidity.
19、【单选题】in a recession when income and wealth are falling, the demand for bonds _________ and the demand curve shifts to the _________. a、falls; right b、falls; left c、rises; right d、rises; left
20、【单选题】during business cycle expansions when income and wealth are rising, the demand for bonds _________ and the demand curve shifts to the _________. a、falls; right b、falls; left c、rises; right d、rises; left
21、【单选题】for a holding period of one year, the expected return on a consol is _________ the higher is the price of the consol today, and _________ the higher is the price of the consol next year. a、higher; higher b、higher; lower c、lower; higher d、lower; lower
22、【单选题】higher expected interest rates in the future _________ the demand for long-term bonds and shift the demand curve to the _________. a、increase; left b、increase; right c、decrease; left d、decrease; right
23、【单选题】lower expected interest rates in the future _________ the demand for long-term bonds and shift the demand curve to the _________ a、increase; left. b、increase; right. c、decrease; left. d、decrease; right.
24、【单选题】when people begin to expect a large stock market decline, the demand curve for bonds shifts to the _________ and the interest rate _________. a、right; falls b、right; rises c、left; falls d、left; rises
25、【单选题】when people begin to expect a large run up in stock prices, the demand curve for bonds shifts to the _________ and the interest rate _________. a、right; rises b、right; falls c、left; falls d、left; rises
26、【单选题】an increase in the expected rate of inflation will _________ the expected return on bonds relative to that on _________ assets, and shift the _________ curve to the left. a、reduce; financial; demand b、reduce; real; demand c、raise; financial; supply d、raise; real; supply
27、【单选题】a decrease in the expected rate of inflation will _________ the expected return on bonds relative to that on _________ assets. a、reduce; financial b、reduce; real c、raise; financial d、raise; real
28、【单选题】when the expected inflation rate increases, the demand for bonds _________, the supply of bonds _________, and the interest rate _________. a、increases; increases; rises b、decreases; decreases; falls c、increases; decreases; falls d、decreases; increases; rises
29、【单选题】when the expected inflation rate decreases, the demand for bonds _________, the supply of bonds _________, and the interest rate _________. a、increases; increases; rises b、decreases; decreases; falls c、increases; decreases; falls d、decreases; increases; rises
30、【单选题】when bond interest rates become more volatile, the demand for bonds _________ and the interest rate _________. a、increases; rises b、increases; falls c、decreases; falls d、decreases; rises
31、【单选题】when bond interest rates become less volatile, the demand for bonds _________ and the interest rate _________. a、increases; rises b、increases; falls c、decreases; falls d、decreases; rises
32、【单选题】when prices in the stock market become more uncertain, the demand curve for bonds shifts to the _________ and the interest rate _________. a、right; rises b、right; falls c、left; falls d、left; rises
33、【单选题】when stock prices become less volatile, the demand curve for bonds shifts to the _________ and the interest rate _________. a、right; rises b、right; falls c、left; falls d、left; rises
34、【单选题】when bonds become more widely traded, and as a consequence the market becomes more liquid, the demand curve for bonds shifts to the _________ and the interest rate _________. a、right; rises b、right; falls c、left; falls d、left; rises
35、【单选题】when bonds become less widely traded, and as a consequence the market becomes less liquid, the demand curve for bonds shifts to the _________ and the interest rate _________. a、right; rises b、right; falls c、left; falls d、left; rises
36、【单选题】factors that cause the demand curve for bonds to shift to the left include ________ a、an increase in the inflation rate. b、an increase in the liquidity of stocks. c、a decrease in the volatility of stock prices. d、all of the above. e、none of the above.
37、【单选题】factors that cause the demand curve for bonds to shift to the left include ________ a、a decrease in the inflation rate. b、an increase in the volatility of stock prices. c、an increase in the liquidity of stocks. d、all of the above. e、only a and b of the above.
38、【单选题】during an economic expansion, the supply of bonds _________ and the supply curve shifts to the _________. a、increases, left b、increases, right c、decreases, left d、decreases, right
39、【单选题】during a recession, the supply of bonds _________ and the supply curve shifts to the _________. a、increases, left b、increases, right c、decreases, left d、decreases, right
40、【单选题】an increase in expected inflation causes the supply of bonds to _________ and the supply curve to shift to the _________. a、increase, left b、increase, right c、decrease, left d、decrease, right
41、【单选题】when the federal government's budget deficit increases, the _________ curve for bonds shifts to the _________. a、demand; right b、demand; left c、supply; left d、supply; right
42、【单选题】when the federal government's budget deficit decreases, the _________ curve for bonds shifts to the _________. a、demand; right b、demand; left c、supply; left d、supply; right
43、【单选题】when the inflation rate is expected to increase, the expected return on bonds relative to real assets falls for any given interest rate; as a result, the _________ bonds falls and the _________ curve shifts to the left. a、demand for; demand b、demand for; supply c、supply of; demand d、supply of; supply
44、【单选题】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、demand for; supply c、supply of; demand d、supply of; supply
45、【单选题】in figure 4.1, the most likely cause of the increase in the equilibrium interest rate from i1 to i2 is ________ figure 4.1 a、an increase in the price of bonds. b、a business cycle boom. c、an increase in the expected inflation rate. d、a decrease in the expected inflation rate.
46、【单选题】in figure 4.1, the most likely cause of the increase in the equilibrium interest rate from i1 to i2 is a(n) _________ in the _________. figure 4.1 a、increase; expected inflation rate b、decrease; expected inflation rate c、increase; government budget deficit d、decrease; government budget deficit
47、【单选题】in figure 4.1, the most likely cause of a decrease in the equilibrium interest rate from i2 to i1 is ________ figure 4.1 a、an increase in the expected inflation rate. b、a decrease in the expected inflation rate. c、a business cycle expansion. d、a combination of both a and c of the above.
48、【单选题】factors that can cause the supply curve for bonds to shift to the right include ________ a、an expansion in overall economic activity. b、a decrease in expected inflation. c、a decrease in government deficits. d、all of the above. e、only a and b of the above.
49、【单选题】factors that can cause the supply curve for bonds to shift to the left include ________ a、an expansion in overall economic activity. b、a decrease in expected inflation. c、an increase in government deficits. d、only a and c of the above.
50、【单选题】the economist irving fisher, after whom the fisher effect is named, explained why interest rates _________ as the expected rate of inflation _________. a、rise; increases b、rise; stabilizes c、rise; decreases d、fall; increases e、fall; stabilizes
51、【单选题】an increase in the expected rate of inflation causes the demand for bonds to _________ and the supply for bonds to _________. a、fall; fall b、fall; rise c、rise; fall d、rise; rise
52、【单选题】a decrease in the expected rate of inflation causes the demand for bonds to _________ and the supply of bonds to _________. a、fall; fall b、fall; rise c、rise; fall d、rise; rise
53、【单选题】when the economy slips into a recession, normally the demand for bonds _________, the supply of bonds _________, and the interest rate _________. a、increases; increases; rises b、decreases; decreases; falls c、increases; decreases; falls d、decreases; increases; rises
54、【单选题】when the economy enters into a boom, normally the demand for bonds _________,the supply of bonds _________, and the interest rate _________. a、increases; increases; rises b、decreases; decreases; falls c、increases; decreases; rises d、decreases; increases; rises
55、【单选题】in figure 4.2, one possible explanation for the increase in the interest rate from i1 to i2 is a(n) _________ in _________. figure 4.2 a、increase; the expected inflation rate b、decrease; the expected inflation rate c、increase; economic growth d、decrease; economic growth
56、【单选题】in figure 4.2, one possible explanation for the increase in the interest rate from i1 to i2 is ________ figure 4.2 a、an increase in economic growth. b、an increase in government budget deficits. c、a decrease in government budget deficits. d、a decrease in economic growth. e、a decrease in the riskiness of bonds relative to other investments.
57、【单选题】in figure 4.2, one possible explanation for a decrease in the interest rate from i2to i1 is ________ figure 4.2 a、an increase in government budget deficits. b、an increase in expected inflation. c、a decrease in economic growth. d、a decrease in the riskiness of bonds relative to other investments.
58、【单选题】in keynes's liquidity preference framework, individuals are assumed to hold their wealth in two forms: ________ a、real assets and financial assets. b、stocks and bonds. c、money and bonds. d、money and gold.
59、【单选题】in his liquidity preference framework, keynes assumed that money has a zero rate of return; thus, when interest rates _________ the expected return on money falls relative to the expected return on bonds, causing the demand for money to _________. a、rise; fall b、rise; rise c、fall; fall d、fall; rise
60、【单选题】the loanable funds framework is easier to use when analyzing the effects of changes in _________, while the liquidity preference framework provides a simpler analysis of the effects from changes in income, the price level, and the supply of _________ a、expected inflation; bonds. b、expected inflation; money. c、government budget deficits; bonds. d、the supply of money; bonds.
61、【单选题】when comparing the loanable funds and liquidity preference frameworks of interest rate determination, which of the following is true? a、the liquidity preference framework is easier to use when analyzing the effects of changes in expected inflation. b、the loanable funds framework provides a simpler analysis of the effects of changes in income, the price level, and the supply of money. c、in most instances, the two approaches to interest rate determination yield the same predictions. d、all of the above are true. e、only a and b of the above are true.
62、【单选题】a higher level of income causes the demand for money to _________ and the interest rate to _________ a、decrease; decrease. b、decrease; increase. c、increase; decrease. d、increase; increase.
63、【单选题】a lower level of income causes the demand for money to _________ and the interest rate to _________ a、decrease; decrease. b、decrease; increase. c、increase; decrease. d、increase; increase.
64、【单选题】a rise in the price level causes the demand for money to _________ and the demand curve to shift to the _________ a、decrease; right. b、decrease; left. c、increase; right. d、increase; left.
65、【单选题】a decline in the price level causes the demand for money to _________ and the demand curve to shift to the _________ a、decrease; right. b、decrease; left. c、increase; right. d、increase; left.
66、【单选题】a decline in the expected inflation rate causes the demand for money to _________ and the demand curve to shift to the ________ a、decrease; right. b、decrease; left. c、increase; right. d、increase; left.
67、【单选题】holding everything else constant, an increase in the money supply causes ________ a、interest rates to decline initially. b、interest rates to increase initially. c、bond prices to decline initially. d、both a and c of the above. e、both b and c of the above.
68、【单选题】holding everything else constant, a decrease in the money supply causes ________ a、interest rates to decline initially. b、interest rates to increase initially. c、bond prices to increase initially. d、both a and c of the above. e、both b and c of the above.
69、【单选题】in figure 4.3, the factor responsible for the decline in the interest rate is ________ figure 4.3 a、a decline in the price level. b、a decline in income. c、an increase in the money supply. d、a decline in the expected inflation rate.
70、【单选题】in figure 4.3, the decrease in the interest rate from i1 to i2 can be explained by ________ figure 4.3 a、a decrease in money growth. b、an increase in money growth. c、a decline in the expected price level. d、only a and b of the above.
71、【单选题】in figure 4.3, an increase in the interest rate from i2 to i1 can be explained by ________ figure 4.3 a、a decrease in money growth. b、an increase in money growth. c、a decline in the price level. d、an increase in the expected price level.
72、【单选题】of the four effects on interest rates from an increase in the money supply, the one that works in the opposite direction of the other three is the ________ a、liquidity effect. b、income effect. c、price level effect. d、expected inflation effect.
73、【单选题】of the four effects on interest rates from an increase in the money supply, the initial effect is, generally, the ________ a、income effect. b、liquidity effect. c、price level effect. d、expected inflation effect.
74、【单选题】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 above the initial level in response to an increase in money growth. d、interest rate will initially rise but eventually fall below the initial level in response to an increase in money growth.
75、【单选题】when the growth rate of the money supply increases, interest rates end up being permanently lower if ________ a、the liquidity effect is larger than the other effects. b、there is fast adjustment of expected inflation. c、there is slow adjustment of expected inflation. d、the expected inflation effect is larger than the liquidity effect.
76、【单选题】when the growth rate of the money supply decreases, interest rates end up being permanently lower if ________ a、the liquidity effect is larger than the other effects. b、there is fast adjustment of expected inflation. c、there is slow adjustment of expected inflation. d、the expected inflation effect is larger than the liquidity effect.
77、【单选题】when the growth rate of the money supply is decreased, interest rates will rise immediately if the liquidity effect is _________ than the other effects and if there is _________ adjustment of expected inflation. a、larger; rapid b、larger; slow c、smaller; slow d、smaller; rapid
78、【单选题】when the growth rate of the money supply is increased, interest rates will rise immediately if the liquidity effect is _________ than the other effects and if there is _________ adjustment of expected inflation. a、larger; rapid b、larger; slow c、smaller; slow d、smaller; rapid
79、【单选题】if the fed wants to permanently lower interest rates, then it should lower the rate of money growth if ________ a、there is fast adjustment of expected inflation. b、there is slow adjustment of expected inflation. c、the liquidity effect is smaller than the expected inflation effect. d、the liquidity effect is larger than the other effects.
80、【单选题】if the fed wants to permanently lower interest rates, then it should raise the rate of money growth if ________ a、there is fast adjustment of expected inflation. b、there is slow adjustment of expected inflation. c、the liquidity effect is smaller than the expected inflation effect. d、the liquidity effect is larger than the other effects.
81、【单选题】milton friedman contends that it is entirely possible that when the money supply rises, interest rates may _________ if the _________ effect is more than offset by changes in income, the price level, and expected inflation. a、fall; liquidity b、fall; risk c、rise; liquidity d、rise; risk
82、【单选题】figure 4.4 illustrates the effect of an increased rate of money supply growth. from the figure, one can conclude that the liquidity effect is _________ than the expected inflation effect and interest rates adjust _________ to changes in expected inflation. figure 4.4 a、smaller; quickly b、larger; quickly c、larger; slowly d、smaller; slowly
83、【单选题】figure 4.4 illustrates the effect of an increased rate of money supply growth. from the figure, one can conclude that the ________ figure 4.4 a、fisher effect is dominated by the liquidity effect and interest rates adjust slowly to changes in expected inflation. b、liquidity effect is dominated by the fisher effect and interest rates adjust slowly to changes in expected inflation. c、liquidity effect is dominated by the fisher effect and interest rates adjust quickly to changes in expected inflation. d、fisher effect is smaller than the expected inflation effect and interest rates adjust quickly to changes in expected inflation.
84、【单选题】figure 4.5 illustrates the effect of an increased rate of money supply growth. from the figure, one can conclude that the liquidity effect is _________ than the expected inflation effect and interest rates adjust _________ to changes in expected inflation. figure 4.5 a、smaller; quickly b、larger; quickly c、larger; slowly d、smaller; slowly
85、【单选题】figure 4.5 illustrates the effect of an increased rate of money supply growth. from the figure, one can conclude that the ________ figure 4.5 a、fisher effect is dominated by the liquidity effect and interest rates adjust slowly to changes in expected inflation. b、liquidity effect is dominated by the fisher effect and interest rates adjust slowly to changes in expected inflation. c、liquidity effect is dominated by the fisher effect and interest rates adjust quickly to changes in expected inflation. d、fisher effect is smaller than the expected inflation effect and interest rates adjust quickly to changes in expected inflation.
86、【单选题】_______ is the total resources owned by the individual, including all assets. a、expected return b、wealth c、liquidity d、risk
87、【单选题】a ________ prefers stock in the less risky asset than in the riskier asset. a、risk preferrer b、risk-averse person c、risk lover d、risk-favorable person
88、【单选题】when the quantity of bonds demanded equals the quantity of bonds supplied there is ________ a、excess supply. b、excess demand. c、market equilibrium. d、asset market approach.
89、【单选题】determining asset prices using stocks of assets rather than flow is called ________ a、asset transformation. b、expected return. c、asset market approach. d、market equilibrium.
90、【单选题】what is the model whose equations are estimated using statistical procedures used in forecasting interest rates called? a、econometric model b、liquidity preference framework c、market equilibrium d、fisher effect
91、【判断题】when interest rates decrease, the demand curve for bonds shifts to the left.
92、【判断题】when an economy grows out of a recession, normally the demand for bonds increases and the supply of bonds increases.
93、【判断题】when the federal government's budget deficit decreases, the demand curve for bonds shifts to the right.
94、【判断题】investors make their choices of which assets to hold by comparing the expected return, liquidity, and risk of alternative assets.
95、【判断题】a person who is risk averse prefers to hold assets that are more, not less, risky.
96、【判断题】interest rates are procyclical in that they tend to rise during business cycle expansions and fall during recessions.
97、【判断题】when income and wealth are rising, the demand for bonds rises and the demand curve shifts to the right.
98、【判断题】an increase in the inflation rate will cause the demand curve for bonds to shift to the right.
99、【判断题】the fisher effect predicts that an incease in expected inflation will lower the interest rate on bonds.
100、【判断题】an increase in the federal government budget deficit will raise the interest rate on bonds.
101、【判断题】holding everything else constant, an increase in wealth lowers the quantity demanded of an asset.
102、【判断题】an increase in an asset's expected return relative to that of an alternative asset, holding everthing else unchanged, raises the quantity demanded of the asset.
103、【判断题】the more liquid an asset is relative to alternative assets, holding everything else unchanged, the more desirable it is, and the greater will be the quantity demanded.
104、【判断题】a movement along the demand (or supply) curve occurs when the quantity demanded (or supplied) changes at each given price (or interest rate) of the bond in response to a change in some other factor besides the bond's price or interest rate.
4.3课后作业
1、【单选题】the term structure of interest rates is ________ a、the relationship among interest rates of different bonds with the same maturity. b、the structure of how interest rates move over time. c、the relationship among the terms to maturity of different bonds. d、the relationship among interest rates on bonds with different maturities.
2、【单选题】the risk structure of interest rates is ________ a、the structure of how interest rates move over time. b、the relationship among interest rates of different bonds with the same maturity. c、the relationship among the terms to maturity of different bonds. d、the relationship among interest rates on bonds with different maturities.
3、【单选题】which of the following long-term bonds should have the lowest interest rate? a、corporate baa bonds b、u.s. treasury bonds c、corporate aaa bonds d、municipal bonds
4、【单选题】which of the following long-term bonds should have the highest interest rate? a、corporate baa bonds b、u.s. treasury bonds c、corporate aaa bonds d、municipal bonds
5、【单选题】the risk premium on corporate bonds becomes smaller if ________ a、the riskiness of corporate bonds increases. b、the liquidity of corporate bonds increases. c、the liquidity of corporate bonds decreases. d、the riskiness of corporate bonds decreases. e、either (b) or (d) occur.
6、【单选题】bonds with relatively low risk of default are called ________ a、zero coupon bonds. b、junk bonds. c、investment grade bonds. d、none of the above.
7、【单选题】bonds with relatively high risk of default are called ________ a、brady bonds. b、junk bonds. c、zero coupon bonds. d、investment grade bonds.
8、【单选题】a corporation suffering big losses might be more likely to suspend interest payments on its bonds, thereby ________ a、raising the default risk and causing the demand for its bonds to rise. b、raising the default risk and causing the demand for its bonds to fall. c、lowering the default risk and causing the demand for its bonds to rise. d、lowering the default risk and causing the demand for its bonds to fall.
9、【单选题】(i) if a corporation suffers big losses, the demand for its bonds will rise because of the higher interest rates the firm must pay. (ii) the spread between the interest rates on bonds with default risk and default-free bonds is called the risk premium. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
10、【单选题】holding everything else constant, if a corporation begins to suffer large losses, then the default risk on its bonds will _________ and the expected return on those bonds will _________. a、increase: increase b、decrease; increase c、increase; decrease d、decrease; decrease
11、【单选题】holding everything else the same, if a corporation's earnings rise, then the default risk on its bonds will _________ and the expected return on those bonds will _________. a、increase; decrease b、decrease; decrease c、increase; increase d、decrease; increase
12、【单选题】if a corporation begins to suffer large losses, then the default risk on its bonds will _________ and the equilibrium interest rate on these bonds will _________. a、increase; decrease b、decrease; increase c、increase; increase d、decrease; decrease
13、【单选题】if a corporation's earnings rise, then the default risk on its bonds will _________ and the equilibrium interest rate on these bonds will _________. a、increase; decrease b、decrease; decrease c、increase; increase d、decrease; increase
14、【单选题】when the default risk on corporate bonds decreases, other things equal, the demand curve for corporate bonds shifts to the _________ and the demand curve for treasury bonds shifts to the _________. a、right; right b、right; left c、left; left d、left; right
15、【单选题】(i) an increase in default risk on corporate bonds shifts the demand curve for corporate bonds to the right. (ii) an increase in default risk on corporate bonds shifts the demand curve for treasury bonds to the left. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
16、【单选题】(i) an increase in default risk on corporate bonds shifts the demand curve for corporate bonds to the left. (ii) an increase in default risk on corporate bonds shifts the demand curve for treasury bonds to the right. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
17、【单选题】when budget talks between congressional republicans and president clinton occurred in late 1995, fear of a government default _________, treasury bond values _________, and interest rates on treasury bonds _________. a、rose; fell; rose b、rose; rose; rose c、fell; rose; fell d、fell; fell; fell
18、【单选题】the spread between interest rates on low quality corporate bonds and u.s. government bonds _________ during the great depression. a、was reversed b、narrowed significantly c、widened significantly d、did not change
19、【单选题】as a result of the enron collapse and bankruptcy, the demand for low quality corporate bonds _________, the demand for high quality corporate bonds _________, and the risk spread _________. a、increased; decreased; was unchanged b、decreased; increased; increased c、increased; decreased; decreased d、decreased; increased; was unchanged
20、【单选题】moody's and standard and poor's are agencies that ________ a、help investors collect when corporations default on their bonds. b、advise municipal bond issuers on the tax exempt status of their bonds. c、produce information about the probability of default on corporate bonds. d、maintain liquid markets for corporate bonds.
21、【单选题】if moody's or standard and poor's downgrades its rating on a corporate bond, the demand for the bond _________ and its yield _________. a、increases; decreases b、decreases; increases c、increases; increases d、decreases; decreases
22、【单选题】corporate bonds are not as liquid as government bonds because ________ a、fewer bonds for any one corporation are traded, making them more costly to sell. b、the corporate bond rating must be calculated each time they are traded. c、corporate bonds are not callable. d、all of the above. e、only a and b of the above.
23、【单选题】(i) the risk premium widens as the default risk on corporate bonds increases. (ii) the risk premium widens as corporate bonds become less liquid. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
24、【单选题】when the corporate bond market becomes less liquid, other things equal, the demand curve for corporate bonds shifts to the _________ and the demand curve for treasury bonds shifts to the _________. a、right; right b、right; left c、left; left d、left; right.
25、【单选题】when the corporate bond market becomes more liquid, other things equal, the demand curve for corporate bonds shifts to the _________ and the demand curve for treasury bonds shifts to the _________. a、right; right b、right; left c、left; left d、left; right
26、【单选题】(i) if a corporate bond becomes less liquid, the demand for the bond will fall, causing the interest rate to rise. (ii) if a corporate bond becomes less liquid, the demand for treasury bonds does not change. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
27、【单选题】(i) if a corporate bond becomes less liquid, the interest rate on the bond will fall. (ii) if a corporate bond becomes less liquid, the interest rate on treasury bonds will fall. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
28、【单选题】if income tax rates were lowered, then ________ a、the interest rate on municipal bonds would fall. b、the interest rate on treasury bonds would rise. c、the interest rate on municipal bonds would rise. d、the price of treasury bonds would fall.
29、【单选题】if income tax rates rise, then ________ a、the prices of municipal bonds will fall. b、the prices of treasury bonds will rise. c、the interest rate on treasury bonds will rise. d、the interest rate on municipal bonds will rise.
30、【单选题】an increase in marginal tax rates would likely have the effect of _________ the demand for municipal bonds and _________ the demand for u.s. government bonds. a、increasing; increasing b、increasing; decreasing c、decreasing; increasing d、decreasing; decreasing
31、【单选题】a decrease in marginal tax rates would likely have the effect of _________ the demand for municipal bonds and _________ the demand for u.s. government bonds. a、increasing; increasing b、increasing; decreasing c、decreasing; increasing d、decreasing; decreasing
32、【单选题】which of the following statements are true? a、because coupon payments on municipal bonds are exempt from federal income tax, the expected after-tax return on them will be higher for individuals in higher income tax brackets. b、an increase in tax rates will increase the demand for municipal bonds, lowering their interest rates. c、interest rates on municipal bonds will be lower than on comparable bonds without the tax exemption. d、all of the above are true statements. e、only a and b are true statements.
33、【单选题】which of the following statements are true? a、because coupon payments on municipal bonds are exempt from federal income tax, the expected after-tax return on them will be higher for individuals in higher income tax brackets. b、an increase in tax rates will increase the demand for treasury bonds, lowering their interest rates. c、interest rates on municipal bonds will be higher than on comparable bonds without the tax exemption. d、only a and b are true statements.
34、【单选题】when a municipal bond is given tax-free status, the demand for municipal bonds shifts _________, causing the interest rate on the bond to _________ a、leftward; rise. b、leftward; fall. c、rightward; rise. d、rightward; fall.
35、【单选题】when a municipal bond is given tax-free status, the demand for treasury bonds shifts _________, and the interest rate on treasury bonds _________ a、leftward; rises. b、leftward; falls. c、rightward; rises. d、rightward; falls.
36、【单选题】if municipal bonds were to lose their tax-free status, then the demand for treasury bonds would shift _________, and the interest rate on treasury bonds would _________ a、rightward; fall. b、rightward; rise. c、leftward; fall. d、leftward; rise.
37、【单选题】the bush tax cut passed in 2001 reduces the top income tax bracket from 39 percent to 35 percent over the next ten years. as a result of this tax cut, the demand for municipal bonds should shift to the _________ and the interest rate on municipal bonds should _________. a、right; decline b、right; increase c、left; decline d、left; increase
38、【单选题】the relationship among interest rates on bonds with identical default risk, but different maturities, is called the ________ a、time-risk structure of interest rates. b、liquidity structure of interest rates. c、yield curve. d、bond demand curve.
39、【单选题】yield curves can be classified as ________ a、upward-sloping. b、downward-sloping. c、flat. d、all of the above. e、only a and b of the above.
41、【单选题】when yield curves are steeply upward-sloping, ________ a、long-term interest rates are above short-term interest rates. b、short-term interest rates are above long-term interest rates. c、short-term interest rates are about the same as long-term interest rates. d、medium-term interest rates are above both short-term and long-term interest rates. e、medium-term interest rates are below both short-term and long-term interest rates.
42、【单选题】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 observed behavior of interest rate movements. c、prove that the real world is a special case that tends to get short shrift in theoretical models. d、have proved entirely unsatisfactory to date.
43、【单选题】according to the expectations theory of the term structure, ________ a、the interest rate on long-term bonds will exceed the average of expected future short-term interest rates. b、interest rates on bonds of different maturities move together over time. c、buyers of bonds prefer short-term to long-term bonds. d、all of the above. e、only a and b of the above.
44、【单选题】according to the expectations theory of the term structure, ________ a、when the yield curve is steeply upward-sloping, short-term interest rates are expected to rise in the future. b、when the yield curve is downward-sloping, short-term interest rates are expected to decline in the future. c、buyers of bonds prefer short-term to long-term bonds. d、all of the above. e、only a and b of the above.
45、【单选题】according to the expectations theory of the term structure, ________ a、when the yield curve is steeply upward-sloping, short-term interest rates are expected to rise in the future. b、when the yield curve is downward-sloping, short-term interest rates are expected to remain relatively stable in the future. c、investors have strong preferences for short-term relative to long-term bonds, explaining why yield curves typically slope upward. d、all of the above. e、only a and b of the above.
46、【单选题】according to the expectations theory of the term structure, ________ a、yield curves should be equally likely to slope downward as to slope upward. b、when the yield curve is steeply upward-sloping, short-term interest rates are expected to rise in the future. c、when the yield curve is downward-sloping, short-term interest rates are expected to remain relatively stable in the future. d、all of the above. e、only a and b of the above.
47、【单选题】if the expected path of one-year interest rates over the next four years is 5 percent, 4 percent, 2 percent, and 1 percent, then the pure expectations theory predicts that today's interest rate on the four-year bond is ________ a、1 percent. b、2 percent. c、4 percent. d、none of the above.
48、【单选题】if the expected path of one-year interest rates over the next five years is 1 percent, 2 percent, 3 percent, 4 percent, and 5 percent, the pure expectations theory predicts that the bond with the highest interest rate today is the one with a maturity of ________ a、one year. b、two years. c、three years. d、four years. e、five years.
49、【单选题】if the expected path of one-year interest rates over the next five years is 2 percent, 4 percent, 1 percent, 4 percent, and 3 percent, the pure expectations theory predicts that the bond with the lowest interest rate today is the one with a maturity of ________ a、one year. b、two years. c、three years. d、four years.
50、【单选题】according to the market segmentation theory of the term structure, ________ a、the interest rate for bonds of one maturity is determined by supply and demand for bonds of that maturity. b、bonds of one maturity are not substitutes for bonds of other maturities; therefore, interest rates on bonds of different maturities do not move together over time. c、investors' strong preference for short-term relative to long-term bonds explains why yield curves typically slope upward. d、all of the above. e、none of the above.
51、【单选题】according to the market segmentation theory of the term structure, ________ a、the interest rate for bonds of one maturity is determined by supply and demand for bonds of that maturity. b、bonds of one maturity are not substitutes for bonds of other maturities; therefore, interest rates on bonds of different maturities do not move together over time. c、investors' strong preference for short-term relative to long-term bonds explains why yield curves typically slope downward. d、only a and b of the above.
52、【单选题】the liquidity premium theory of the term structure ________ a、indicates that today's long-term interest rate equals the average of short-term interest rates that people expect to occur over the life of the long-term bond. b、assumes that bonds of different maturities are perfect substitutes. c、suggests that markets for bonds of different maturities are completely separate because people have preferred habitats. d、does none of the above.
53、【单选题】the liquidity premium theory of the term structure ________ a、assumes investors tend to prefer short-term bonds because they have less interest-rate risk. b、assumes that interest rates on the long-term bond respond to demand and supply conditions for that bond. c、assumes that an average of expected short-term rates is an important component of interest rates on long-term bonds. d、assumes all of the above. e、assumes none of the above.
54、【单选题】according to the liquidity premium theory of the term structure, ________ a、the interest rate on long-term bonds will equal an average of short-term interest rates that people expect to occur over the life of the long-term bonds plus a liquidity premium. b、buyers of bonds may prefer bonds of one maturity over another, yet interest rates on bonds of different maturities move together over time. c、even with a positive liquidity premium, if future short-term interest rates are expected to fall significantly, then the yield curve will be downward-sloping. d、all of the above. e、only a and b of the above.
55、【单选题】according to the liquidity premium theory of the term structure, ________ a、because buyers of bonds may prefer bonds of one maturity over another, interest rates on bonds of different maturities do not move together over time. b、the interest rate on long-term bonds will equal an average of short-term interest rates that people expect to occur over the life of the long-term bonds plus a term premium. c、because of the positive term premium, the yield curve cannot be downward-sloping. d、all of the above. e、only a and b of the above.
56、【单选题】if the yield curve slope is flat, the liquidity premium theory indicates that the market is predicting ________ a、a mild rise in short-term interest rates in the near future and a mild decline further out in the future. b、constant short-term interest rates in the near future and further out in the future. c、a mild decline in short-term interest rates in the near future and a continuing mild decline further out in the future. d、constant short-term interest rates in the near future and a mild decline further out in the future.
57、【单选题】if the yield curve has a mild upward slope, the liquidity premium theory indicates that the market is predicting ________ a、a rise in short-term interest rates in the near future and a decline further out in the future. b、constant short-term interest rates in the near future and further out in the future. c、a decline in short-term interest rates in the near future and a rise further out in the future. d、a decline in short-term interest rates in the near future and an even steeper decline further out in the future.
58、【单选题】according to the liquidity premium theory of the term structure, a downward-sloping yield curve indicates that short-term interest rates are expected to ________ a、rise in the future. b、remain unchanged in the future. c、decline moderately in the future. d、decline sharply in the future.
59、【单选题】according to the liquidity premium theory of the term structure, when the yield curve has its usual slope, the market expects ________ a、short-term interest rates to rise sharply. b、short-term interest rates to drop sharply. c、short-term interest rates to stay near their current levels. d、none of the above.
60、【单选题】in actual practice, short-term interest rates are just as likely to fall as to rise; this is the major shortcoming of the ________ a、market segmentation theory. b、expectations theory. c、liquidity premium theory. d、separable markets theory.
61、【单选题】which theory of the term structure proposes that bonds of different maturities are not substitutes for one another? a、market segmentation theory b、expectations theory c、liquidity premium theory d、separable markets theory
62、【单选题】since yield curves are usually upward sloping, the _________ indicates that, on average, people tend to prefer holding short-term bonds to long-term bonds. a、market segmentation theory b、expectations theory c、liquidity premium theory d、both a and b of the above e、both a and c of the above
63、【单选题】_________ cannot explain the empirical fact that interest rates on bonds of different maturities tend to move together. a、the market segmentation theory b、the expectations theory c、the liquidity premium theory d、both a and b of the above e、both a and c of the above
64、【单选题】which of the following theories of the term structure is (are) able to explain the fact that interest rates on bonds of different maturities tend to move together over time? a、the pure expectations hypothesis b、the segmented markets theory c、the preferred habitat theory d、both a and b of the above e、both a and c of the above
65、【单选题】of the four theories that explain how interest rates on bonds with different terms to maturity are related, the one that views long-term interest rates as equaling the average of future short-term rates expected to occur over the life of the bond is the ________ a、pure expectations theory. b、preferred habitat theory. c、liquidity premium theory. d、segmented markets theory.
66、【单选题】of the four theories that explain how interest rates on bonds with different terms to maturity are related, the one that assumes that bonds of different maturities are not substitutes for one another is the ________ a、expectations theory. b、segmented markets theory. c、liquidity premium theory. d、preferred habitat theory.
67、【单选题】a moderately upward-sloping yield curve indicates that short-term interest rates are expected to ________ a、neither rise nor fall in the near future. b、remain relatively unchanged, but that long-term rates are expected to fall. c、neither rise nor fall, but that long-term rates are expected to rise moderately. d、rise moderately in the near future.
68、【单选题】a steep upward sloping yield curve indicates that short-term interest rates are expected to ________ a、neither rise nor fall in the near future. b、remain relatively unchanged, but that long-term rates are expected to fall. c、neither rise nor fall, but that long-term rates are expected to rise moderately. d、rise moderately in the near future.
69、【单选题】a bond rating of aa or aa would mean that the quality of the bond is ________ a、the highest. b、high. c、medium grade. d、speculative.
70、【单选题】______ bonds are the most liquid of all long-term bonds. a、callable b、municipal c、corporate aaa d、u.s. treasury
71、【单选题】______ bonds are exempt from federal income taxes. a、corporate aaa b、u.s. treasury c、corporate baa d、municipal
72、【单选题】the risk structure of interest rates is explained by ________ a、default risk. b、liquidity. c、tax considerations. d、all of the above.
73、【单选题】the ________ theory is the most widely accepted theory of the term structure of interest rates because it explains the major empirical facts about the term structure so well. a、liquidity premium b、market segmentation c、expectations d、none of the above
74、【单选题】________ are investment advisory firms that rate the quality of corporate and municipal bonds in terms of probability of default. a、financial institutions b、credit-rating agencies c、securities companies d、none of the above
75、【单选题】if a bond has favorable tax treatment, its interest rate ________ a、will be higher. b、will not be effected. c、will be lower. d、all of the above could happen.
76、【判断题】the term structure of interest rates describes how interest rates move over time.
77、【判断题】the risk structure of interest rates describes the relationship between the interest rates of different bonds with the same maturity.
78、【判断题】following the enron bankruptcy, the spread between the interest rates on baa bonds and aaa bonds widened.
79、【判断题】the risk premium on corporate bonds becomes smaller as the liquidity of the bonds falls.
80、【判断题】an increase in income tax rates will cause the interest rates on tax exempt municipal bonds to fall relative to the interest rate on taxable corporate securities.
81、【判断题】the interest rates on bonds of different maturities tend to move together over time.
82、【判断题】the expectations theory is able to explain why yield curves are usually upward-sloping.
83、【判断题】according to the expectations theory, the interest rate on a long-term bond is the average of the short-term interest rates expected over the life of the long-term bond.
84、【判断题】the market segmentation theory is able to explain why interest rates on bonds of different maturities move together over time.
85、【判断题】bonds with the lowest risk of default are often referred to as junk bonds.
86、【判断题】a positive liquidity premium indicates that investors prefer long-term bonds over short-term bonds.
87、【判断题】a mildly upward sloping yield curve suggests that the market is predicting constant short-term interest rates.
88、【判断题】an increase in the marginal tax rate would likely increase the demand for municipal bonds, and decrease the demand for u.s. government bonds.
89、【判断题】when yield curves are downward sloping, long-term interest rates are above short-term interest rates.
90、【判断题】risk occurs when the issuer of the bond is unable or unwilling to make interest payments when promised or pay off the face value when the bond matures.
91、【判断题】the spread between the interest rates on bonds with default risk and default-free bonds is called the risk premium.
5.4课后作业
1、【单选题】activity in money markets increased significantly in the late 1970s and early 1980s because of _________ a、rising short-term interest rates. b、regulations that limited what banks could pay for deposits. c、both (a) and (b). d、neither (a) nor (b).
2、【单选题】money market securities have all the following characteristics except they are not _________ a、short term. b、money. c、low risk. d、very liquid.
3、【单选题】money market instruments _________ a、are usually sold in large denominations. b、have low default risk. c、mature in one year or less. d、are characterized by all of the above. e、are characterized by only (a) and (b) of the above.
4、【单选题】the banking industry _________ a、should have an efficiency advantage in gathering information that would eliminate the need for the money markets. b、exists primarily to mediate the asymmetric information problem between saver-lenders and borrower-spenders. c、is subject to more regulations and governmental costs than are the money markets. d、all of the above are true. e、only (a) and (b) of the above are true.
5、【单选题】in situations where asymmetric information problems are not severe, _________ a、the money markets have a distinct cost advantage over banks in providing short-term funds. b、the money markets have a distinct cost advantage over banks in providing long-term funds. c、banks have a distinct cost advantage over the money markets in providing short-term funds. d、the money markets cannot allocate short-term funds as efficiently as banks can.
6、【单选题】brokerage firms that offered money market security accounts in the 1970s had a cost advantage over banks in attracting funds because the brokerage firms _________ a、were not subject to deposit reserve requirements. b、were not subject to the deposit interest rate ceilings. c、were not limited in how much they could borrow from depositors. d、had the advantage of all the above. e、had the advantage of only (a) and (b) of the above.
7、【单选题】which of the following statements about the money market are true? a、not all commercial banks deal for their customers in the secondary market. b、money markets are used extensively by businesses both to warehouse surplus funds and to raise short-term funds. c、the single most influential participant in the u.s. money market is the u.s. treasury department. d、all of the above are true. e、only (a) and (b) of the above are true.
8、【单选题】which of the following statements about the money markets are true? a、most money market securities do not pay interest. instead the investor pays less for the security than it will be worth when it matures. b、pension funds invest a portion of their assets in the money market to have sufficient liquidity to meet their obligations. c、unlike most participants in the money market, the u.s. treasury department is always a demander of money market funds and never a supplier. d、all of the above are true. e、only (a) and (b) of the above are true.
9、【单选题】which of the following are true statements about participants in the money markets? a、large banks participate in the money markets by selling large negotiable cds. b、the u.s. government and corporations borrow in the money markets because cash inflows and outflows are rarely synchronized. c、the federal reserve is the single most influential participant in the u.s. money market. d、all of the above are true. e、only (a) and (b) of the above are true.
10、【单选题】the most influential participant(s) in the u.s. money market _________ a、is the federal reserve. b、is the u.s. treasury department. c、are the large money center banks. d、are the investment banks that underwrite securities.
11、【单选题】the fed is an active participant in money markets mainly because of its responsibility to _________ a、lower borrowing costs to encourage capital investment. b、control the money supply. c、increase the interest income of retirees holding money market instruments. d、assist the securities and exchange commission in regulating the behavior other money market participants.
12、【单选题】commercial banks are large holders of _________ and are the major issuer of _________. a、negotiable certificates of deposit; u.s. government securities b、u.s. government securities; negotiable certificates of deposit c、commercial paper; eurodollars d、eurodollars; commercial paper
13、【单选题】the primary function of large diversified brokerage firms in the money market is to _________ a、sell money market securities to the federal reserve for its open market operations. b、make a market for money market securities by maintaining an inventory from which to buy or sell. c、buy money market securities from corporations that need liquidity. d、buy t-bills from the u.s. treasury department.
14、【单选题】finance companies raise funds in the money market by selling _________ a、commercial paper. b、federal funds. c、negotiable certificates of deposit. d、eurodollars.
15、【单选题】finance companies play a unique role in money markets by _________ a、giving consumers indirect access to money markets. b、combining consumers’ investments to purchase money market securities on their behalf. c、borrowing in capital markets to finance purchases of money market securities. d、assisting the government in its sales of u.s. treasury securities.
16、【单选题】when inflation rose in the late 1970s, _________ a、consumers moved money out of money market mutual funds because their returns did not keep pace with inflation. b、banks solidified their advantage over money markets by offering higher deposit rates. c、brokerage houses introduced highly popular money market mutual funds, which drew significant amounts of money out of bank deposits. d、consumers were unable to take advantage of higher rates in money markets because of the requirement of large transaction sizes.
17、【单选题】which of the following is the largest borrower in the money markets? a、commercial banks b、large corporations c、the u.s. treasury d、u.s. firms engaged in foreign trade
18、【单选题】money market instruments issued by the u.s. treasury are called _________ a、treasury bills. b、treasury notes. c、treasury bonds. d、treasury strips.
19、【单选题】the treasury auctions 91-day and 182-day treasury bills once a week. it auctions 52-week bills _________ a、once a month. b、once every 13 weeks. c、once a year. d、every two weeks.
20、【单选题】which of the following statements are true of treasury bills? a、the market for treasury bills is extremely deep and liquid. b、occasionally, investors find that earnings on t-bills do not compensate them for changes in purchasing power due to inflation. c、by volume, most treasury bills are sold to individuals who submit noncompetitive bids. d、all of the above are true. e、only (a) and (b) of the above are true.
21、【单选题】suppose that you purchase a 91-day treasury bill for $9,850 that is worth $10,000 when it matures. the security’s annualized yield if held to maturity is about _________ a、4 percent. b、5 percent. c、6 percent. d、7 percent.
22、【单选题】suppose that you purchase a 182-day treasury bill for $9,850 that is worth $10,000 when it matures. the security’s annualized yield if held to maturity is about _________. a、1.5% b、2% c、3% d、6%
23、【单选题】treasury bills do not _________ a、pay interest. b、have a maturity date. c、have a face amount. d、have an active secondary market.
24、【单选题】if your competitive bid for a treasury bill is successful, then you will _________ a、certainly pay less than if you had submitted a noncompetitive bid. b、probably pay more than if you had submitted a noncompetitive bid. c、pay the average of prices offered in other successful competitive bids. d、pay the same as other successful competitive bidders.
25、【单选题】if your noncompetitive bid for a treasury bill is successful, then you will _________ a、certainly pay less than if you had submitted a competitive bid. b、certainly pay more than if you had submitted a competitive bid. c、pay the average of prices offered in other noncompetitive bids. d、pay the same as other successful noncompetitive bidders.
26、【单选题】federal funds _________ a、are short-term funds transferred between financial institutions, usually for a period of one day. b、actually have nothing to do with the federal government. c、provide banks with an immediate infusion of reserves. d、are all of the above. e、are only (a) and (b) of the above.
27、【单选题】federal funds are _________ a、usually overnight investments. b、borrowed by banks that have a deficit of reserves. c、lent by banks that have an excess of reserves. d、all of the above. e、only (a) and (b) of the above.
28、【单选题】the fed can influence the federal funds interest rate by adjusting the level of reserves available to banks. the fed can _________ a、lower the federal funds interest rate by adding reserves. b、raise the federal funds interest rate by removing reserves. c、remove reserves by selling securities. d、do all of the above. e、do only (a) and (b) of the above.
29、【单选题】the federal reserve can influence the federal funds interest rate by buying securities, which _________ reserves, thereby _________ the federal funds rate. a、adds; raising b、removes; lowering c、adds; lowering d、removes; raising
30、【单选题】the fed can lower the federal funds interest rate by _________ securities, thereby _________ reserves. a、selling; adding b、selling; lowering c、buying; adding d、buying; lowering
31、【单选题】if the fed wants to lower the federal funds interest rate, it will _________ the banking system by _________ securities. a、add reserves to; selling b、add reserves to; buying c、remove reserves from; selling d、remove reserves from; buying
32、【单选题】if the fed wants to raise the federal funds interest rate, it will _________ securities to _________ the banking system. a、sell; add reserves to b、sell; remove reserves from c、buy; add reserves to d、buy; remove reserves from
33、【单选题】government securities dealers frequently engage in repos to_________ a、manage liquidity. b、take advantage of anticipated changes in interest rates. c、lend or borrow for a day or two with what is essentially a collateralized loan. d、do all of the above. e、do only (a) and (b) of the above.
34、【单选题】repos are _________ a、usually low risk loans. b、usually collateralized with treasury securities. c、low interest rate loans. d、all of the above. e、only (a) and (b) of the above.
35、【单选题】a negotiable certificate of deposit _________ a、is a term security because it has a specified maturity date. b、is a bearer instrument, meaning whoever holds the certificate at maturity receives the principal and interest. c、can be bought and sold until maturity. d、all of the above. e、only (a) and (b) of the above.
36、【单选题】negotiable certificates of deposit _________ a、are bearer instruments because their holders earn the interest and principal at maturity. b、typically have a maturity of one to four months. c、are usually denominated at $100,000. d、are all of the above. e、are only (a) and (b) of the above.
37、【单选题】commercial paper securities _________ a、are issued only by the largest and most creditworthy corporations, as they are unsecured. b、carry an interest rate that varies according to the firm’s level of risk. c、never have a term to maturity that exceeds 270 days. d、all of the above. e、only (a) and (b) of the above.
38、【单选题】unlike most money market securities, commercial paper _________ a、is not generally traded in a secondary market. b、usually has a term to maturity that is longer than a year. c、is not popular with most money market investors because of the high default risk. d、all of the above. e、only (a) and (b) of the above.
39、【单选题】a banker’s acceptance is _________ a、used to finance goods that have not yet been transferred from the seller to the buyer. b、an order to pay a specified amount of money to the bearer on a given date. c、a relatively new money market security that arose in the 1960s as international trade expanded. d、all of the above. e、only (a) and (b) of the above.
40、【单选题】banker’s acceptances _________ a、can be bought and sold until they mature. b、are issued only by large money center banks. c、carry low interest rates because of the very low default risk. d、are all of the above. e、are only (a) and (b) of the above.
41、【单选题】eurodollars _________ a、are time deposits with fixed maturities and are, therefore, somewhat illiquid. b、may offer the borrower a lower interest rate than can be received in the domestic market. c、are limited to london banks. d、are all of the above. e、are only (a) and (b) of the above.
42、【单选题】which of the following statements about money market securities are true? a、the interest rates on all money market instruments move very closely together over time. b、the secondary market for treasury bills is extensive and well developed. c、there is no well-developed secondary market for commercial paper. d、all of the above are true. e、only (a) and (b) of the above are true.
43、【判断题】money market securities are short-term instruments with an original maturity of less than one year.
44、【判断题】money market securities include treasury bills, commercial paper, federal funds, repurchase agreements, negotiable certificates of deposit, banker’s acceptances, and eurodollars.
45、【判断题】the term money market is actually a misnomer, because liquid securities are traded in these markets rather than money.
46、【判断题】money markets are referred to as retail markets because small individual investors are the primary buyers of money market securities.
47、【判断题】the u.s. treasury department is the single most influential participant in the u.s. money market.
48、【判断题】the u.s. treasury department is the single largest borrower in the u.s. money market.
49、【判断题】banks are unusual participants in the money market because they buy, but do not sell, money market instruments.
50、【判断题】money markets are used extensively by businesses both to warehouse surplus funds and to raise short-term funds.
51、【判断题】the market for u.s. treasury bills is a shallow market because so few individual investors buy t-bills.
52、【判断题】the t-bill is not an investment to be used for anything but temporary storage of excess funds because it barely keeps up with inflation.
53、【判断题】the main purpose for federal funds is to provide banks with an immediate infusion of reserves should they be short.
54、【判断题】the fed can influence the federal funds rate by adjusting the level of reserves in the banking system.
55、【判断题】commercial paper securities are unsecured promissory notes, issued by corporations, that mature in no more than 270 days.
56、【判断题】a banker’s acceptance is an order to pay a specified amount of money to the bearer on a given date. banker’s acceptances have been used since the twelfth century.
57、【判断题】interest rates on banker’s acceptances are low because the risk of default is very low.
58、【判断题】in general, money market instruments are low risk, high yield securities.
6.5课后作业
1、【单选题】compared to money market securities, capital market securities have _________ a、more liquidity. b、longer maturities. c、lower yields. d、less risk.
2、【单选题】(i) securities that have an original maturity greater than one year are traded in capital markets. (ii) the best known capital market securities are stocks and bonds. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
3、【单选题】(i) securities that have an original maturity greater than one year are traded in money markets. (ii) the best known money market securities are stocks and bonds. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
4、【单选题】(i) firms and individuals use the capital markets for long-term investments. (ii) the capital markets provide an alternative to investment in assets such as real estate and gold. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
5、【单选题】the primary reason that individuals and firms choose to borrow long-term is to reduce the risk that interest rates will _________ before they pay off their debt. a、rise b、fall c、become more volatile d、become more stable
6、【单选题】a firm that chooses to finance a new plant by issuing money market securities _________ a、must incur the cost of issuing new securities to roll over its debt. b、runs the risk of having to pay higher interest rates when it rolls over its debt. c、incurs both the cost of reissuing securities and the risk of having to pay higher interest rates on the new debt. d、is more likely to profit if interest rates rise while the plant is being constructed.
7、【单选题】the primary reason that individuals and firms choose to borrow long-term is to _________ a、reduce the risk that interest rates will fall before they pay off their debt. b、reduce the risk that interest rates will rise before they pay off their debt. c、reduce monthly interest payments, as interest rates tend to be higher on short-term than long-term debt instruments. d、reduce total interest payments over the life of the debt.
8、【单选题】a firm will borrow long-term _________ a、if the extra interest cost of borrowing long-term is less than the expected cost of rising interest rates before it retires its debt. b、if the extra interest cost of borrowing short-term due to rising interest rates does not exceed the expected premium that is paid for borrowing long term. c、if short-term interest rates are expected to decline during the term of the debt. d、if long-term interest rates are expected to decline during the term of the debt.
9、【单选题】the primary issuers of capital market securities include _________ a、the federal and local governments. b、the federal and local governments, and corporations. c、the federal and local governments, corporations, and financial institutions. d、local governments and corporations.
10、【单选题】governments never issue stock because _________ a、they cannot sell ownership claims. b、the constitution expressly forbids it. c、both (a) and (b) of the above. d、neither (a) nor (b) of the above.
11、【单选题】(i) the primary issuers of capital market securities are federal and local governments, and corporations. (ii) governments never issue stock because they cannot sell ownership claims. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
12、【单选题】(i) the primary issuers of capital market securities are financial institutions. (ii) the largest purchasers of capital market securities are corporations. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
13、【单选题】the distribution of a firm’s capital between debt and equity is its _________ a、leverage ratio. b、liability structure. c、acid ratio. d、capital structure.
14、【单选题】the largest purchasers of capital market securities are _________ a、households. b、corporations. c、governments. d、central banks.
15、【单选题】individuals and households frequently purchase capital market securities through financial institutions such as _________ a、mutual funds. b、pension funds. c、money market mutual funds. d、all of the above. e、only (a) and (b) of the above.
16、【单选题】(i) there are two types of exchanges in the secondary market for capital securities: organized exchanges and over-the-counter exchanges. (ii) when firms sell securities for the very first time, the issue is an initial public offering. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
17、【单选题】(i) capital market securities fall into two categories: bonds and stocks. (ii) long-term bonds include government bonds and long-term notes, municipal bonds, and corporate bonds. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
18、【单选题】the _________ value of a bond is the amount that the issuer must pay at maturity. a、market b、present c、discounted d、face
19、【单选题】the _________ rate is the rate of interest that the issuer must pay. a、market b、coupon c、discount d、funds
20、【单选题】(i) the coupon rate is the rate of interest that the issuer of the bond must pay. (ii) the coupon rate is usually fixed for the duration of the bond and does not fluctuate with market interest rates. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
21、【单选题】(i) the coupon rate is the rate of interest that the issuer of the bond must pay. (ii) the coupon rate on old bonds fluctuates with market interest rates so they will remain attractive to investors. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
22、【单选题】treasury bonds are subject to _________ risk but are free of _________ risk. a、default; interest-rate b、default; underwriting c、interest-rate; default d、interest-rate; underwriting
23、【单选题】the prices of treasury notes, bonds, and bills are quoted _________ a、as a percentage of the coupon rate. b、as a percentage of the previous day’s closing value. c、as a percentage of $100 face value. d、as a multiple of the annual interest paid.
24、【单选题】the security with the longest maturity is a treasury _________ a、note. b、bond. c、acceptance. d、bill.
25、【单选题】(i) to sell an old bond when interest rates have risen, the holder will have to discount the bond until the yield to the buyer is the same as the market rate. (ii) the risk that the value of a bond will fall when market interest rates rise is called interest-rate risk. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
26、【单选题】to sell an old bond when interest rates have _________, the holder will have to _________ the price of the bond until the yield to the buyer is the same as the market rate. a、risen; lower b、risen; raise c、fallen; lower d、risen; inflate
27、【单选题】most of the time, the interest rate on treasury notes and bonds is _________ that on money market securities because of _________ risk. a、above; interest-rate b、above; default c、below; interest-rate d、below; default
28、【单选题】(i) in most years the rate of return on short-term treasury bills is below that on the 20-year treasury bond. (ii) interest rates on treasury bills are more volatile than rates on long-term treasury securities. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
29、【单选题】(i) because interest rates on treasury bills are more volatile than rates on long-term securities, the return on short-term treasury securities is usually above that on longer-term treasury securities. (ii) a treasury strip separates the periodic interest payments from the final principal repayment. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
30、【单选题】which of the following statements about treasury inflation-indexed bonds is not true? a、the principal amount used to compute the interest payment varies with the consumer price index. b、the interest payment rises when inflation occurs. c、the interest rate rises when inflation occurs. d、at maturity the securities pay the greater of face-value or inflation-adjusted principal.
31、【单选题】the interest rates on government agency bonds are _________ a、almost identical to those available on treasury securities since it is unlikely that the federal government would permit its agencies to default on their obligations. b、significantly higher than those available on treasury securities due to their low liquidity. c、significantly lower than those available on treasury securities because agency interest payments are tax exempt. d、significantly lower than those available on treasury securities because the interest-rate risk on agency securities is lower than that on treasury securities.
32、【单选题】(i) municipal bonds that are issued to pay for essential public projects are exempt from federal taxation. (ii) general obligation bonds do not have specific assets pledged as security or a specific source of revenue allocated for their repayment. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
33、【单选题】(i) most corporate bonds have a face value of $1000, pay interest semi-annually, and can be redeemed anytime the issuer wishes. (ii) registered bonds have now been largely replaced by bearer bonds, which do not have coupons. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
34、【单选题】the bond contract that states the lender’s rights and privileges and the borrower’s obligations is called the _________ a、bond syndicate. b、restrictive covenant. c、bond covenant. d、bond indenture.
35、【单选题】policies that limit the discretion of managers as a way of protecting bondholders’ interests are called _________ a、restrictive covenants. b、debentures. c、sinking funds. d、bond indentures.
36、【单选题】typically, the interest rate on corporate bonds will be _________ the more restrictions are placed on management through restrictive covenants, because _________. a、higher; corporate earnings will be limited by the restrictions b、higher; the bonds will be considered safer by bondholders c、lower; the bonds will be considered safer by buyers d、lower; corporate earnings will be higher with more restrictions in place
37、【单选题】restrictive covenants can _________ a、limit the amount of dividends the firm can pay. b、limit the ability of the firm to issue additional debt. c、restrict the ability of the firm to enter into a merger agreement. d、do all of the above. e、do only (a) and (b) of the above.
38、【单选题】(i) restrictive covenants often limit the amount of dividends that firms can pay the stockholders. (ii) most corporate indentures include a call provision, which states that the issuer has the right to force the holder to sell the bond back. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
39、【单选题】call provisions will be exercised when interest rates _________ and bond values _________. a、rise; rise b、fall; rise c、rise; fall d、fall; fall
40、【单选题】a requirement in the bond indenture that the firm pay off a portion of the bond issue each year is called _________ a、a sinking fund. b、a call provision. c、a restrictive covenant. d、a shelf registration.
41、【单选题】(i) callable bonds must have a higher yield than comparable noncallable bonds. (ii) convertible bonds are attractive to bondholders and sell for a higher price than comparable nonconvertible bonds. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
42、【单选题】long-term unsecured bonds that are backed only by the general creditworthiness of the issuer are called _________ a、junk bonds. b、callable bonds. c、convertible bonds. d、debentures.
43、【单选题】a secured bond is backed by _________ a、the general creditworthiness of the borrower. b、an insurance company’s financial guarantee. c、the expected future earnings of the borrower. d、specific collateral.
44、【单选题】financial guarantees _________ a、are insurance policies to back bond issues. b、are purchased by financially weaker security issuers. c、lower the risk of the bonds covered by the guarantee. d、do all of the above. e、do only (a) and (b) of the above.
45、【单选题】corporate bonds are less risky if they are _________ bonds and municipal bonds are less risky if they are _________ bonds. a、secured; revenue b、secured; general obligation c、unsecured; revenue d、unsecured; general obligation
46、【单选题】which of the following are true for the current yield? a、the current yield is defined as the yearly coupon payment divided by the price of the security. b、the formula for the current yield is identical to the formula describing the yield to maturity for a discount bond. c、the current yield is always a poor approximation for the yield to maturity. d、all of the above are true. e、only (a) and (b) of the above are true.
47、【单选题】the nearer a bond’s price is to its par value and the longer the maturity of the bond the more closely _________ approximates _________ a、current yield; yield to maturity. b、current yield; coupon rate. c、yield to maturity; current yield. d、yield to maturity; coupon rate.
48、【单选题】which of the following are true for the current yield? a、the current yield is defined as the yearly coupon payment divided by the price of the security. b、the current yield and the yield to maturity always move together. c、the formula for the current yield is identical to the formula describing the yield to maturity for a discount bond. d、all of the above are true. e、only (a) and (b) of the above are true.
49、【单选题】the current yield is a less accurate approximation of the yield to maturity the _________ the time to maturity of the bond and the _________ the price is from/to the par value. a、shorter; closer b、shorter; farther c、longer; closer d、longer; farther
50、【单选题】the current yield on a $6,000, 10 percent coupon bond selling for $5,000 is _________ a、5 percent. b、10 percent. c、12 percent. d、15 percent.
51、【单选题】the current yield on a $5,000, 8 percent coupon bond selling for $4,000 is _________ a、5 percent. b、8 percent. c、10 percent. d、20 percent. e、none of the above.
52、【单选题】for a consol, the current yield is an _________ of the yield to maturity. a、underestimate b、overestimate c、approximate measure d、exact measure
53、【单选题】which of the following are true of the yield on a discount basis as a measure of the interest rate? a、it uses the percentage gain on the face value of the security, rather than the percentage gain on the purchase price of the security. b、it puts the yield on the annual basis of a 360-day year. c、it ignores the time to maturity. d、all of the above are true. e、only (a) and (b) of the above are true.
54、【单选题】the formula for the measure of the interest rate called the yield on a discount basis is peculiar because _________ a、it puts the yield on the annual basis of a 360-day year. b、it uses the percentage gain on the purchase price of the bill. c、it ignores the time to maturity. d、both (a) and (b) of the above. e、both (a) and (c) of the above.
55、【单选题】the yield on a discount basis of a 180-day $1,000 treasury bill selling for $950 is _________ a、10 percent. b、20 percent. c、25 percent. d、40 percent.
56、【单选题】the yield on a discount basis of a 90-day $1,000 treasury bill selling for $950 is _________ a、5 percent. b、10 percent. c、15 percent. d、20 percent. e、none of the above.
57、【单选题】the yield on a discount basis of a 90-day $1,000 treasury bill selling for $900 is _________ a、10 percent. b、20 percent. c、25 percent. d、40 percent.
58、【单选题】the yield on a discount basis of a 180-day $1,000 treasury bill selling for $900 is _________ a、10 percent. b、20 percent. c、25 percent. d、40 percent.
59、【单选题】when an old bond’s market value is above its par value the bond is selling at a _________. this occurs because the old bond’s coupon rate is _________ the coupon rates of new bonds with similar risk. a、premium; below b、premium; above c、discount; below d、discount; above
60、【判断题】the primary issuers of capital market securities are local governments and corporations.
61、【判断题】capital market securuties are less liquid and have longer maturities than money market securities.
62、【判断题】governments never issue stock because they cannot sell ownership claims.
63、【判断题】to sell an old bond when rates have risen, the holder will have to discount the bond until the yield to the buyer is the same as the market rate.
64、【判断题】most of the time, the interest rate on treasury notes is below that on money market securities because of their low default risk.
65、【判断题】municipal bonds that are issued to pay for essential public projects are exempt from federal taxation.
66、【判断题】most municipal bonds are revenue bonds rather than general obligation bonds.
67、【判断题】most corporate bonds have a face value of $1000, are sold at a discount, and can only be redeemed at the maturity date.
68、【判断题】registered bonds have now been largely replaced by bearer bonds, which do not have coupons.
69、【判断题】a sinking fund is a requirement in the bond indenture that the firm pay off a portion of the bond issue each year.
70、【判断题】debentures are long-term unsecured bonds that are backed only by the general creditworthiness of the issuer.
71、【判断题】in a leveraged buy out, a firm greatly increases its debt level by issuing junk bonds to finance the purchase of another firm’s stock.
72、【判断题】a financial guarantee ensures that the lender (bond purchaser) will be paid both principal and interest in the event the issuer defaults.
73、【判断题】the current yield on a bond is a good approximation of the bond’s yield to maturity when the bond matures in five years or less and its price differs from its par value by a large amount.
7.4课后作业
1、【单选题】(i) a share of common stock in a firm represents an ownership interest in that firm. (ii) a share of preferred stock is as much like a bond as it is like common stock. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
2、【单选题】preferred stockholders hold a claim on assets that has priority over the claims of _________ a、both common stockholders and bondholders. b、neither common stockholders nor bondholders. c、common stockholders, but after that of bondholders. d、bondholders, but after that of common stockholders.
3、【单选题】(i) preferred stockholders hold a claim on assets that has priority over the claims of common stockholders, but after that of bondholders. (ii) firms issue preferred stock in far greater amounts than common stock. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
4、【单选题】(i) preferred stockholders hold a claim on assets that has priority over the claims of common stockholders. (ii) bondholders hold a claim on assets that has priority over the claims of preferred stockholders. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
5、【单选题】(i) firms issue common stock in far greater amounts than preferred stock. (ii) the total volume of stock issued is much less than the volume of bonds issued. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
6、【单选题】the riskiest capital market security is _________ a、preferred stock. b、common stock. c、corporate bonds. d、treasury bonds.
7、【单选题】organized exchanges account for about _________ percent of the total dollar volume of domestic stock shares traded. a、30 b、45 c、60 d、70
8、【单选题】organized exchanges account for about _________ percent of the total dollar volume of domestic stocks traded. a、60 b、70 c、80 d、90
9、【单选题】(i) the largest of the organized stock exchanges in the united states is the new york stock exchange. (ii) to be listed on the nyse, a firm must have a minimum of $100 million dollars in market value or $10 million in revenues. a、(i) is true, (ii) false. b、(i) is false, (ii) true. c、both are true. d、both are false.
10、【单选题】to list on the nyse, a firm must _________ a、have earnings of at least $100 million for each of the last three years. b、have at least $500 million of market value and $100 million of revenue. c、have a total of $100 million in market value of publicly traded shares. d、meet all of the above requirements. e、meet (a) and (b) of the above requirements.
11、【单选题】securities not listed on one of the exchanges trade in the over-the-counter market. in this exchange, dealers “make a market” by _________ a、buying stocks for inventory when investors want to sell. b、selling stocks from inventory when investors want to buy. c、doing both of the above. d、doing neither of the above.
12、【单选题】the most active stock exchange in the world is the _________ a、nikkei stock exchange. b、london stock exchange. c、shanghai stock exchange. d、new york stock exchange.
13、【单选题】which of the following statements about trading operations in an organized exchange are correct? a、floor traders all deal in a wide variety of stocks. b、in most trades, specialists match buy and sell orders. c、in most trades, specialists buy for or sell from their own inventories. d、the superdot system is used to expedite large trades of over 100,000 shares.
14、【单选题】which of the following is not an advantage of electronic communications networks (ecns)? a、all unfilled orders are available for review by ecn traders. b、transactions costs are lower for ecn trades. c、trades are made and confirmed faster. d、ecns work well for thinly traded stocks.
15、【单选题】which of the following statements is false regarding electronic communications networks (ecns)? a、archipelago and instinet are two examples of ecns. b、competition from ecns has forced nasdaq to cut its fees. c、traders benefit from lower trading costs and faster service. d、ecns allow institutional investors, but not individuals, to trade after hours.
16、【单选题】a basic principle of finance is that the value of any investment is _________ a、the present value of all future net cash flows generated by the investment. b、the undiscounted sum of all future net cash flows generated by the investment. c、unrelated to the future net cash flows generated by the investment. d、unrelated to the degree of risk associated with the future net cash flows generated by the investment.
17、【单选题】a stock currently sells for $25 per share and pays $0.24 per year in dividends. what is an investor’s valuation of this stock if she expects it to be selling for $30 in one year and requires 15 percent return on equity investments? a、$30.24 b、$26.30 c、$26.09 d、$27.74
18、【单选题】a stock currently sells for $30 per share and pays $1.00 per year in dividends. what is an investor’s valuation of this stock if he expects it to be selling for $37 in one year and requires 12 percent return on equity investments? a、$38 b、$33.50 c、$34.50 d、$33.93
19、【单选题】in the one-period valuation model, a stock’s value will be higher _________ a、the higher is its expected future price. b、the lower is its dividend. c、the higher is the required return on investments in equity. d、all of the above.
20、【单选题】in the one-period valuation model, a stock’s value falls if the _________ rises. a、dividend b、expected future price c、required return on equity d、current price
21、【单选题】in the generalized dividend valuation model a stock’s value depend only on _________ a、its future dividend payments and its future price. b、its future dividend payments and the required return on equity. c、its future price and the required return on investments on equity. d、its future dividend payments.
22、【单选题】which of the following is not an element of the gordon growth model of stock valuation? a、the stock’s most recent dividend paid. b、the expected constant growth rate of dividends. c、the required return on investments in equity. d、the stock’s expected future price.
23、【单选题】according to the gordon growth model, what is an investor’s valuation of a stock whose current dividend is $1.00 per year if dividends are expected to grow at a constant rate of 10 percent over a long period of time and the investor’s required return is 11 percent? a、$110 b、$100 c、$11 d、$10 e、$5.24
24、【单选题】according to the gordon growth model, what is an investor’s valuation of a stock whose current dividend is $1.00 per year if dividends are expected to grow at a constant rate of 10 percent over a long period of time and the investor’s required return is 15 percent? a、$20 b、$11 c、$22 d、$7.33 e、$4.40
25、【单选题】holding other things constant, a stock’s value will be highest if its dividend growth rate is _________. a、15 percent b、10 percent c、5 percent d、2 percent
26、【单选题】holding other things constant, a stock’s value will be highest if its most recent dividend is _________. a、$2.00 b、$5.00 c、$0.50 d、$1.00
27、【单选题】holding other things constant, a stock’s value will be highest if the investor’s required return on investments in equity is _________. a、20 percent b、15 percent c、10 percent d、5 percent
28、【单选题】suppose the average industry pe ratio for auto parts retailers is 20. what is the current price of auto zone stock if the retailer’s earnings per share are projected to be $1.85? a、$21.85 b、$37 c、$10.81 d、$9.25
29、【单选题】which of the following is true regarding the gordon growth model? a、dividends are assumed to grow at a constant rate forever. b、the dividend growth rate is assumed to be greater than the required return on equity. c、both (a) and (b). d、neither (a) nor (b).
30、【单选题】the pe ratio approach to valuing stock is especially useful for valuing _________ a、privately held firms. b、firms that don’t pay dividends. c、both (a) and (b). d、neither (a) nor (b).
31、【单选题】the pe ratio approach to valuing stock is especially useful for valuing _________ a、publicly held corporations. b、firms that regularly pay dividends. c、both (a) and (b). d、neither (a) nor (b).
32、【单选题】a weakness of the pe approach to valuing stock is that it is _________ a、difficult to estimate the constant growth rate of a firm’s dividends. b、difficult to estimate the required return on equity. c、difficult to predict how much a firm will pay in dividends. d、based on industry averages rather than firm-specific factors.
33、【单选题】a firm is expected to pay a dividend of $1.00 next year and the dividend is expected to grow at a constant rate of 4 percent over time. some investors have required returns on investments in equity of 12 percent, some 10 percent, and some 8 percent. the market price of this firm’s stock will be slightly above _________. a、$25 b、$18 c、$16.67 d、$12.50
34、【单选题】(i) the market price of a security at a given time is the highest value any investor puts on the security. (ii) superior information about a security increases its value by reducing its risk. a、(i) is true, (ii) is false. b、(i) is false, (ii) is true. c、both are true. d、both are false.
35、【单选题】the main cause of fluctuations in stock prices is changes in _________ a、tax laws. b、errors in technical stock analysis. c、daily trading volume in stock markets. d、information available to investors. e、total household wealth in the economy.
36、【单选题】stock values computed by valuation models may differ from actual market prices because it is difficult to _________ a、estimate future dividend growth rates. b、estimate the risk of a stock. c、forecast a stock’s future dividends. d、all of the above are true.
37、【单选题】the 2001 terrorist attacks and the enron financial scandal caused anticipated dividend growth to _________, investors’ required return on equity to _________, and stock prices to _________. a、decreases; increase; decrease b、decrease; increase; increase c、increase; decrease; decrease d、increase; decrease; increase
38、【单选题】which of the following is not an objective of the securities and exchange commission? a、maintain integrity of the securities markets b、advise investors about which particular stocks are good buys c、require firms to provide specific information to investors d、regulate major participants in securities markets
39、【判断题】more stock trading in the u.s. occurs in over-the-counter markets rather than on organized exchanges.
40、【判断题】in over-the-counter markets, dealers increases the liquidity of thinly traded securities.
41、【判断题】electronic communications networks apply technology to make organized exchanges more efficient and speedy.
42、【判断题】all stocks pay dividends, as that is the only way an investor can profit from holding stock.
43、【判断题】common stock is the riskiest corporate security, followed by preferred stock and then bonds.
44、【判断题】the enron financial scandal increased uncertainty about the quality of accounting information and as a result increased required return on investment in stocks.
45、【判断题】the dow jones industrial average is the broadest and best indicator of the stock market’s day-to-day performance.
46、【判断题】the securities and exchange commission requires firms to submit various documents to increase the flow of information to investors but does not verify the accuracy of that information.
47、【判断题】about half of new equity issues are preferred stock.
48、【判断题】a stock’s market value will be higher the higher is its expected dividend stream.
49、【判断题】the gordon growth model assumes that a stock’s dividend grows at a constant rate forever.
50、【判断题】a stock’s market value will be higher the higher is the investor’s required rate of return.
8.5课后作业
1、【单选题】american firms became less competitive compared to foreign firms during the 1980s because _________ a、the quality and productivity of american workers declined. b、foreign firms were younger than american firms and as a result had more modern facilities that made use of the latest technology. c、the u.s. dollar became worth more in terms of foreign currencies. d、the u.s. dollar became worth less in terms of foreign currencies.
2、【单选题】a spot transaction in the foreign exchange market involves the _________ a、exchange of exports and imports at a specified future date. b、exchange of bank deposits at a specified future date. c、immediate (within two days) exchange of exports and imports. d、immediate (within two days) exchange of bank deposits.
3、【单选题】when the value of the british pound changes from $1.50 to $1.25, then the pound has _________ and the dollar has _________. a、appreciated; appreciated b、depreciated; appreciated c、appreciated; depreciated d、depreciated; depreciated
4、【单选题】when the value of the dollar changes from £0.5 to £0.75, then the pound has _________ and the dollar has _________. a、appreciated; appreciated b、depreciated; appreciated c、appreciated; depreciated d、depreciated; depreciated
5、【单选题】when the exchange rate changes from 1.0 euros to the dollar to 1.2 euros to the dollar, then the euro has _________ and the dollar has _________. a、appreciated; appreciated b、depreciated; appreciated c、appreciated; depreciated d、depreciated; depreciated
6、【单选题】when the exchange rate changes from 1.0 euros to the dollar to 0.8 euros to the dollar, then the euro has _________ and the dollar has _________. a、appreciated; appreciated b、depreciated; appreciated c、appreciated; depreciated d、depreciated; depreciated
7、【单选题】if the dollar _________ from 1.2 euros per dollar to 0.8 euros per dollar, the euro _________ from 0.83 dollars to 1.25 dollars per euro. a、appreciates; appreciates b、appreciates; depreciates c、depreciates; depreciates d、depreciates; appreciates
8、【单选题】if the dollar appreciates from 0.8 euros per dollar to 1.2 euros per dollar, the euro depreciates from _________ dollars to _________ dollars per euro. a、1.25; 0.83 b、0.83; 1.25 c、0.67; 1.50 d、1.50; 0.67
9、【单选题】if the dollar depreciates relative to the swiss franc, _________ a、swiss chocolate will become more expensive in the united states. b、american computers will become less expensive in switzerland. c、swiss chocolate will become cheaper in the united states. d、both a and b of the above.
10、【单选题】if the dollar appreciates relative to the swiss franc, _________ a、swiss chocolate will become more expensive in the united states. b、american computers will become less expensive in switzerland. c、swiss chocolate will become cheaper in the united states. d、both a and b of the above.
11、【单选题】when the exchange rate for the euro changes from $1.00 to $1.20 then, holding everything else constant, the euro has _________ a、appreciated and german cars sold in the united states become more expensive. b、appreciated and german cars sold in the united states become less expensive. c、depreciated and american wheat sold in germany becomes more expensive. d、depreciated and american wheat sold in germany becomes less expensive.
12、【单选题】when the exchange rate for the euro changes from $1.20 to $1.00, then, holding everything else constant, the euro has _________ a、appreciated and german cars sold in the united states become more expensive. b、appreciated and german cars sold in the united states become less expensive. c、depreciated and american wheat sold in germany becomes more expensive. d、depreciated and american wheat sold in germany becomes less expensive.
13、【单选题】the starting point for understanding how exchange rates are determined is a simple idea called _________, which states that if two countries produce an identical good, the price of the good should be the same throughout the world no matter which country produces it. a、gresham's law b、the law of one price c、purchasing power parity d、arbitrage
14、【单选题】the theory of purchasing power parity is a theory of how exchange rate are determined in _________ a、the long run. b、the short run. c、both a and b. d、none of the above.
15、【单选题】the _________ states that exchange rates between any two currencies will adjust to reflect changes in the price levels of the two countries. a、theory of purchasing power parity b、law of one price c、theory of money neutrality d、quantity theory of money
16、【单选题】the theory of purchasing power parity states that exchange rates between any two currencies will adjust to reflect changes in _________ a、the trade balances of the two countries. b、the current account balances of the two countries. c、fiscal policies of the two countries. d、the price levels of the two countries.
17、【单选题】in the long run, a rise in a country's price level (relative to the foreign price level) causes its currency to _________, while a rise in the country's relative productivity causes its currency to _________ a、appreciate; appreciate. b、appreciate; depreciate. c、depreciate; appreciate. d、depreciate; depreciate.
18、【单选题】if the 2005 inflation rate in britain is 6 percent, and the inflation rate in the u.s. is 4 percent, then the theory of purchasing power parity predicts that, during 2005, the value of the british pound in terms of u.s. dollars will _________ a、rise by 10 percent. b、rise by 2 percent. c、fall by 10 percent. d、fall by 2 percent. e、do none of the above.
19、【单选题】the theory of purchasing power parity cannot fully explain exchange rate movements because _________ a、not all goods are identical in different countries. b、monetary policy differs across countries. c、some goods are not traded between countries. d、both a and c of the above. e、both b and c of the above.
20、【单选题】the theory of purchasing power parity cannot fully explain exchange rate movements because _________ a、all goods are identical even if produced in different countries. b、monetary policy differs across countries. c、some goods are not traded between countries. d、fiscal policy differs across countries.
21、【单选题】increased demand for a country's _________ causes its currency to appreciate in the long run, while increased demand for _________ causes its currency to depreciate. a、imports; imports b、imports; exports c、exports; imports d、exports; exports
22、【单选题】if the demand for _________ goods decreases relative to _________ goods, the domestic currency will depreciate. a、foreign; domestic b、foreign; foreign c、domestic; domestic d、domestic; foreign
23、【单选题】higher tariffs and quotas cause a country's currency to _________ in the _________ run. a、depreciate; short b、appreciate; short c、depreciate; long d、appreciate; long
24、【单选题】lower tariffs and quotas cause a country's currency to _________ in the _________ run. a、depreciate; short b、appreciate; short c、depreciate; long d、appreciate; long
25、【单选题】if the inflation rate in the united states is higher than that in germany and productivity is growing at a slower rate in the united states than it is in germany, in the long run, _________ a、the euro should appreciate relative to the dollar. b、the euro should depreciate relative to the dollar. c、there should be no change in the euro price of dollars. d、it is not clear what will happen to the euro price of dollars.
26、【单选题】if the french demand for american exports rises at the same time that u.s. productivity rises relative to french productivity, then, in the long run, _________ a、the euro should appreciate relative to the dollar. b、the dollar should depreciate relative to the euro. c、the dollar should appreciate relative to the euro. d、it is not clear whether the euro should appreciate or depreciate relative to the dollar.
27、【单选题】the theory of asset demand suggests that the most important factor affecting the demand for domestic and foreign deposits is _________ a、the level of trade and capital flows. b、the expected return on these assets relative to one another. c、the liquidity of these assets relative to one another. d、the riskiness of these assets relative to one another.
28、【单选题】when francois the foreigner considers the expected return on dollar deposits in terms of foreign currency, the expected return must be adjusted for _________ a、any expected appreciation or depreciation of the dollar. b、the interest rates on foreign deposits. c、both a and b of the above. d、neither (a) nor (b) of the above.
29、【单选题】the expected return on dollar deposits in terms of foreign currency is the _________ the interest rate on dollar deposits and the expected appreciation of the dollar. a、product of b、ratio of c、sum of d、difference in
30、【单选题】if the interest rate on foreign deposits (if) increases, holding everything else constant, _________ a、the expected return on these deposits must also increase. b、the expected return on domestic deposits must decrease. c、the expected return on domestic deposits must increase. d、both a and b of the above. e、both a and c of the above.
31、【单选题】if the interest rate on dollar deposits is 10 percent, and the dollar is expected to appreciate by 7 percent over the coming year, the expected return on dollar deposits in terms of the foreign currency is _________ a、3 percent. b、10 percent. c、13.5 percent. d、17 percent. e、24 percent.
32、【单选题】if the interest rate is 7 percent on euro deposits and 5 percent on dollar deposits, and if the dollar is expected to appreciate at a 4 percent rate, _________ a、euro deposits have a higher expected return than dollar deposits. b、the expected return on euro deposits in terms of dollars is 11 percent. c、the expected return on dollar deposits in terms of euros is 1 percent. d、the expected return on euro deposits in terms of dollars is 3 percent. e、the expected return on dollar deposits equals the expected return on euro deposits.
33、【单选题】if the interest rate is 13 percent on euro deposits and 15 percent on dollar deposits, and if the euro is expected to appreciate at a 4 percent rate relative to the dollar, then _________ a、euro deposits have a lower expected return than dollar deposits. b、the expected return on euro deposits in terms of dollars is 9 percent. c、the expected return on dollar deposits in terms of euros is 19 percent. d、both a and b of the above will occur. e、none of the above will occur.
34、【单选题】the expected return on dollar deposits in terms of dollars, rd, is _________ a、 b、 c、 d、
35、【单选题】the condition which states that the domestic interest rate equals the foreign interest rate minus the expected appreciation of the domestic currency is called _________ a、the purchasing power parity condition. b、the interest parity condition. c、money neutrality. d、the theory of foreign capital mobility.
36、【单选题】in a world with few impediments to capital mobility, the domestic interest rate equals the sum of the foreign interest rate and the expected depreciation of the domestic currency, a situation known as the _________ a、interest parity condition. b、purchasing power parity condition. c、exchange rate parity condition. d、foreign asset parity condition.
37、【单选题】according to the interest parity condition, the domestic interest rate is equal to the foreign interest rate _________ a、plus the expected appreciation of the domestic currency. b、less the expected appreciation of the domestic currency. c、less the expected depreciation of the domestic currency. d、less the expected depreciation of the domestic currency weighted by the domestic interest rate.
38、【单选题】according to the interest parity condition, if the domestic interest rate is _________ the foreign interest rate, then _________ a、above; there is expected appreciation of the foreign currency. b、above; there is expected depreciation of the foreign currency. c、below; there is expected appreciation of the foreign currency. d、below; the interest parity condition is violated.
39、【单选题】according to the interest parity condition, if the domestic interest rate is 12 percent and the foreign interest rate is 10 percent, then the expected _________ of the foreign currency must be _________ percent. a、appreciation; 4 b、appreciation; 2 c、depreciation; 2 d、depreciation; 4
40、【单选题】according to the interest parity condition, if the domestic interest rate is 10 percent and the foreign interest rate is 12 percent, then the expected _________ of the foreign currency must be _________ percent. a、appreciation; 4 b、appreciation; 2 c、depreciation; 2 d、depreciation; 4
41、【单选题】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 b、dollar; foreign c、foreign; dollar d、foreign; foreign
42、【单选题】when americans and foreigners expect the return on dollar deposits to be high relative to the return on foreign deposits, there is a _________ demand for dollar deposits and a correspondingly _________ demand for foreign deposits. a、higher; higher b、higher; lower c、lower; higher d、lower; lower
43、【单选题】as the relative expected return on dollar deposits increases, foreigners will want to hold more _________ deposits and less _________ deposits. a、foreign; foreign b、foreign; dollar c、dollar; foreign d、dollar; dollar
44、【单选题】as the relative expected return on dollar deposits increases, _________ a、foreigners will want to hold fewer dollar deposits and more foreign deposits. b、americans will want to hold more dollar deposits and less foreign deposits. c、americans will want to hold fewer dollar deposits and more foreign deposits. d、americans and foreigners will be indifferent towards holding dollar deposits or foreign deposits.
45、【单选题】an increase in the foreign interest rate shifts the expected return schedule for _________ deposits to the _________ and causes the domestic currency to depreciate. a、domestic; right b、domestic; left c、foreign; right d、foreign; left
46、【单选题】a decrease in the foreign interest rate shifts the expected return schedule for _________ deposits to the _________ and causes the domestic currency to appreciate. a、domestic; right b、domestic; left c、foreign; right d、foreign; left
47、【单选题】a rise in the expected future exchange rate shifts the expected return schedule for _________ deposits to the _________ and causes the domestic currency to appreciate. a、domestic; right b、domestic; left c、foreign; right d、foreign; left
48、【单选题】a fall in the expected future exchange rate shifts the expected return schedule for _________ deposits to the _________ and causes the domestic currency to depreciate. a、domestic; right b、domestic; left c、foreign; right d、foreign; left
49、【单选题】an increase in the domestic interest rate shifts the expected return schedule for _________ deposits to the _________ and causes the domestic currency to appreciate. a、domestic; right b、domestic; left c、foreign; right d、foreign; left
50、【单选题】a decrease in the domestic interest rate shifts the expected return schedule for _________ deposits to the _________ and causes the domestic currency to depreciate. a、domestic; right b、domestic; left c、foreign; right d、foreign; left
51、【单选题】which of the following causes a depreciation of the domestic currency? a、a lower domestic interest rate due to a lower expected inflation rate. b、a decline in the domestic real interest rate. c、a decrease in the domestic money supply. d、all of the above.
52、【单选题】which of the following causes an appreciation of the domestic currency? a、a lower domestic interest rate due to a lower expected inflation rate. b、a decline in the domestic real interest rate. c、an increase in the domestic money supply. d、all of the above.
53、【单选题】when the domestic nominal interest rate rises because of an increase in expected inflation, the expected appreciation of the dollar declines, _________ shifts out more than _________, and the exchange rate declines. a、 b、 c、 d、
54、【单选题】when an increase in the money supply causes the exchange rate to fall by more in the short run than it does in the long run, it is called _________ a、exchange rate disequilibrium. b、exchange rate overshooting. c、the j-curve effect. d、none of the above.
55、【单选题】in the long run, a one-time percentage increase in the money supply is matched by the same one-time percentage rise in the price level, _________ a、leaving unchanged the real money supply and all other economic variables such as interest rates. this proposition is called money neutrality. b、leaving unchanged the real money supply and the nominal exchange rate. this proposition is called money neutrality. c、leaving unchanged the real money supply and all other economic variables such as interest rates. this proposition is called money illusion. d、leaving unchanged the real money supply and the nominal exchange rate. this proposition is called money illusion.
56、【单选题】money neutrality means that in the long run the domestic interest rate and rd remain unchanged, implying that the fall in the exchange rate is greater in the _________ run than in the _________ run, a phenomenon called exchange rate overshooting. a、short; short b、short; long c、long; short d、long; long
57、【单选题】a lower domestic money supply causes the domestic currency to _________ a、depreciate in the short run. b、depreciate in the long run. c、appreciate in the short run. d、do both a and b of the above. e、do both b and c of the above.
58、【单选题】a higher domestic money supply causes the domestic currency to _________ a、depreciate more in the short run than in the long run. b、depreciate more in the long run than in the short run. c、appreciate more in the short run than in the long run. d、appreciate more in the long run than in the short run.
59、【单选题】the weakness of the dollar in the late 1970s and the strength of the dollar in the early 1980s can be explained by movements in _________ a、real interest rates, but not nominal interest rates. b、nominal interest rates, but not real interest rates. c、relative price levels, but not real interest rates. d、none of the above.
60、【单选题】evidence from the united states during the period 1973-2001 indicates the correspondence between nominal interest rates and exchange rate movements is _________ a、much closer than that between real interest rates and exchange rate movements. b、not nearly as close as that between government spending and exchange rate movements. c、not nearly as close as that between government deficits and exchange rate movements. d、not nearly as close as that between real interest rates and exchange rate movements.
61、【单选题】forward exchange rates _________ a、involve the immediate exchange of bank deposits. b、involve the exchange of bank deposits as some specified future date. c、involve the immediate exchange of imports and exports. d、none of the above.
62、【单选题】the foreign exchange market _________ a、is organized as as on over-the-counter market in which several hundred dealers stand ready to buy and sell deposits denominated in foreign currencies. b、is very competitive. c、functions no differently from a centralized market. d、all of the above.
63、【单选题】the purchasing power parity _________ a、has significant predictive power in the short run. b、the starting point for understanding how exchange rates are determined. c、does not take into account that many goods and services are not traded across borders. d、none of the above.
64、【单选题】in the long run _________ affect the exchange rate. a、relative price levels b、tariffs and quotas c、productivity d、all of the above.
65、【单选题】quotas _________ a、are restrictions placed on the quality of foreign goods that can be imported. b、fees placed on imported goods. c、are restrictions placed on the quantity of foreign goods that can be exported. d、none of the above.
66、【单选题】the more modern asset market approach to exchange rate determination _________ a、emphasizes the role of import and export demand. b、emphasizes stocks of assets. c、both of the above. d、neither of the above.
67、【单选题】the interest parity condition _________ a、can be used to explain how the exchange rate is determined. b、simply means that the expected returns on both dollar assets and foreign assets. c、both of the above. d、neither of the above.
68、【判断题】the foreign exchange market is organized as an over-the-counter market in which deposits denominated in foreign currencies are bought and sold.
69、【判断题】when the value of the dollar changes from 0.5 pounds to 0.75 pounds, then the pound has appreciated and the dollar has depreciated.
70、【判断题】when the exchange rate for the euro changes from $0.90 to $0.85, then holding everything else constant, the euro has depreciated and american wheat sold in germany becomes more expensive.
71、【判断题】the theory of purchasing power parity cannot fully explain exchange rate movements because fiscal policy differs across countries.
72、【判断题】if the dollar depreciates relative to the british pound, british sweaters will become more expensive in the united states.
73、【判断题】if the dollar appreciates relative to the swiss franc, swiss chocolate will become cheaper in the united states.
74、【判断题】if the exchange rate between the dollar and the swiss franc changes from 1.8 to 1.5 francs per dollar, the franc depreciates and the dollar appreciates.
75、【判断题】an increase in tariffs and quotas on imports causes a country's currency to appreciate.
76、【判断题】increased demand for a country's exports causes its currency to depreciate.
77、【判断题】as the relative expected return on dollar deposits increases, americans will want to hold fewer dollar deposits and more foreign deposits.
78、【判断题】according to the interest rate parity condition, if the domestic interest rate is 12 percent and the foreign interest rate is 10 percent, then the expected appreciation of the foreign currency must be 2 percent.
79、【判断题】a fall in the expected future exchange rate shifts the expected return schedule for domestic deposits to the right and causes the domestic currency to depreciate.
80、【判断题】depreciation of a currency makes it easier for domestic manufacturers to sell their goods abroad and makes foreign goods less competitive in domestic markets.
81、【判断题】there are two kinds of exchange rate transactions.
9.2课后作业
1、【单选题】which of the following statements are true? a、a bank's assets are its sources of funds. b、a bank's liabilities are its uses of funds. c、a bank's balance sheet shows that total assets equal total liabilities plus equity capital. d、each of the above.
2、【单选题】which of the following statements is true? a、a bank's assets are its uses of funds. b、a bank's assets are its sources of funds. c、a bank's liabilities are its uses of funds. d、only b and c of the above are true.
3、【单选题】which of the following statements is false? a、a bank's assets are its uses of funds. b、a bank issues liabilities to acquire funds. c、a bank's assets provide the bank with income. d、bank capital is an asset on the bank balance sheet.
4、【单选题】a bank's balance sheet _________ a、shows that total assets equal total liabilities plus equity capital. b、lists sources and uses of bank funds. c、indicates whether or not the bank is profitable. d、does all of the above. e、does only a and b of the above.
5、【单选题】which of the following are reported as liabilities on a bank's balance sheet? a、reserves b、checkable deposits c、loans d、deposits with other banks
6、【单选题】which of the following are reported as liabilities on a bank's balance sheet? a、discount loans b、cash items in the process of collection c、state government securities d、all of the above e、only b and c of the above
7、【单选题】the share of checkable deposits in total bank liabilities has _________ a、expanded moderately over time. b、expanded dramatically over time. c、shrunk over time. d、remained virtually unchanged since 1960.
8、【单选题】checkable deposits and money market deposit accounts are _________ a、payable on demand. b、liabilities of the banks. c、assets of the banks. d、only a and b of the above. e、only a and c of the above.
9、【单选题】which of the following statements is false? a、checkable deposits are usually the lowest cost source of bank funds. b、checkable deposits are the primary source of bank funds. c、checkable deposits are payable on demand. d、checkable deposits include now accounts.
10、【单选题】in recent years, the interest paid on checkable and time deposits has accounted for around _________ of total bank operating expenses, while the costs involved in running the bank have been approximately _________ of total operating expenses. a、50%; 50% b、50%; 25% c、25%; 50% d、25%; 75%
11、【单选题】because checking accounts are _________ liquid for the depositor than passbook savings, they earn _________ interest rates. a、less; higher b、less; lower c、more; higher d、more; lower
12、【单选题】because passbook savings are _________ liquid for the depositor than checking accounts, they earn _________ interest rates. a、less; higher b、less; lower c、more; higher d、more; lower
13、【单选题】which of the following are transaction deposits? a、savings accounts b、small-denomination time deposits c、money market deposit accounts d、certificates of deposit
14、【单选题】which of the following are nontransaction deposits? a、savings accounts b、small-denomination time deposits c、negotiable order of withdrawal accounts d、all of the above e、only a and b of the above
15、【单选题】which of the following are transaction deposits? a、savings accounts b、small-denomination time deposits c、negotiable order of withdrawal accounts d、certificates of deposit
16、【单选题】large-denomination cds are _________, so that like a bond they can be resold in a _________ market before they mature. a、nonnegotiable; secondary b、nonnegotiable; primary c、negotiable; secondary d、negotiable; primary
17、【单选题】bank loans from the federal reserve are called _________ and represent a _________ of funds. a、discount loans; use b、discount loans; source c、fed funds; use d、fed funds; source
18、【单选题】which of the following would substitute for discount loans? a、loans to businesses b、repurchase agreements c、investing in eurodollars d、loans to bank holding companies e、reverse repurchase agreements
19、【单选题】which of the following are reported as assets on a bank's balance sheet? a、discount loans from the fed b、loans c、borrowings d、only a and b of the above
20、【单选题】which of the following are reported as assets on a bank's balance sheet? a、cash items in the process of collection b、deposits with other banks c、checkable deposits d、bank capital e、only a and b of the above
21、【单选题】which of the following are reported as assets on a bank's balance sheet? a、borrowings b、reserves c、savings deposits d、bank capital e、only a and b of the above
22、【单选题】which of the following are not reported as assets on a bank's balance sheet? a、cash items in the process of collection b、deposits with other banks c、u.s. treasury securities d、checkable deposits
23、【单选题】which of the following are not reported as assets on a bank's balance sheet? a、cash items in the process of collection b、borrowings c、u.s. treasury securities d、reserves
24、【单选题】because of their _________ liquidity, _________ u.s. government securities are called secondary reserves. a、low; short-term b、low; long-term c、high; short-term d、high; long-term
25、【单选题】secondary reserves are so-called because _________ a、they can be converted into cash with low transactions costs. b、they are not easily converted into cash and are, therefore, of secondary importance to banks. c、50 percent of these assets count toward meeting required reserves. d、of none of the above.
26、【单选题】the most important category of assets on a bank's balance sheet is _________ a、discount loans. b、securities. c、loans. d、cash items in the process of collection.
27、【单选题】which of the following bank assets is the least liquid? a、reserves b、secondary reserves c、cash items in process of collection d、deposits with other banks
28、【单选题】which of the following bank assets is the most liquid? a、consumer loans b、reserves c、cash items in process of collection d、u.s. government securities
29、【单选题】loans _________ a、are the largest category of bank assets. b、provide most of the bank c、earn the highest return of all bank assets. d、do each of the above. e、do only a and b of the above.
30、【单选题】a bank's largest source of funds is its _________ a、nontransaction deposits. b、checking deposits. c、borrowing from the fed. d、federal funds.
31、【单选题】banks earn profits by selling _________ with attractive combinations of liquidity, risk, and return, and using the proceeds to buy _________ with a different set of characteristics. a、loans; deposits b、securities; deposits c、liabilities; assets d、assets; liabilities
32、【单选题】in general, banks make profits by selling _________ liabilities and buying _________ assets. a、long-term; shorter-term b、short-term; longer-term c、illiquid; liquid d、risky; risk-free
33、【单选题】when you deposit $50 in the first national bank, _________ a、its liabilities decrease by $50. b、its assets increase by $50. c、its reserves increase by $50. d、only b and c of the above occur.
34、【单选题】when you deposit $50 in the first national bank, _________ a、its liabilities decrease by $50. b、its assets increase by $50. c、its reserves decrease by $50. d、only b and c of the above occur.
35、【单选题】when you deposit $50 in currency at old national bank, _________ a、its assets increase by $50. b、its reserves increase by less than $50 because of reserve requirements. c、its liabilities decrease by $50. d、only a and b of the above occur.
36、【单选题】when you deposit $50 in currency at old national bank, _________ a、its assets increase by less than $50 because of reserve requirements. b、its reserves increase by less than $50 because of reserve requirements. c、its liabilities increase by $50. d、only a and b of the above occur.
37、【单选题】when a $10 check written on the first national bank is deposited in an account at the second national bank, then _________ a、the liabilities of the first national bank decrease by $10. b、the reserves of the first national bank increase by $10. c、the liabilities of second national bank decrease by $10. d、the assets of second national bank decrease by $10.
38、【单选题】when a $10 check written on the first national bank is deposited in an account at second national bank, then _________ a、the liabilities of the first national bank decrease by $10. b、the liabilities of second national bank increase by $10. c、the reserves of the first national bank increase by $10. d、all of the above occur. e、only a and b of the above occur.
39、【单选题】holding all else constant, when a bank receives the funds for a deposited check, _________ a、cash items in process of collection fall by the amount of the check. b、bank assets increase by the amount of the check. c、bank liabilities decrease by the amount of the check. d、all of the above.
40、【单选题】holding all else constant, when a bank receives the funds for a deposited check, _________ a、cash items in process of collection fall by the amount of the check. b、bank assets remain unchanged. c、bank liabilities decrease by the amount of the check. d、all of the above. e、only a and b of the above.
41、【单选题】a bank manager has which of the following concerns? a、to acquire funds at low cost b、to minimize risk by diversifying asset holdings c、to have enough ready cash to meet deposit outflows d、all of the above
42、【单选题】which of the following are primary concerns of a bank manager? a、maintaining sufficient reserves to minimize the cost to the bank of deposit outflows b、extending loans to borrowers who will pay high interest-rates, but who are also good credit risks c、acquiring funds at a relatively low cost, so that profitable lending opportunities can be realized d、all of the above
43、【单选题】bankers' concern regarding the optimal mix of excess reserves, secondary reserves, borrowings from the fed, and borrowings from other banks to deal with deposit outflows is an example of _________ a、liability management. b、liquidity management. c、managing interest-rate risk. d、none of the above.
44、【单选题】when $1 million is deposited at a bank, the required reserve ratio is 20 percent, and the bank chooses not to hold any excess reserves but makes loans instead, then, in the bank's final balance sheet, _________ a、the assets at the bank increase by $200,000. b、the liabilities of the bank increase by $200,000. c、reserves increase by $200,000. d、each of the above occurs.
45、【单选题】when $1 million is deposited at a bank, the required reserve ratio is 20 percent, and the bank chooses not to hold any excess reserves but makes loans instead, then, in the bank's final balance sheet, _________ a、the assets at the bank increase by $800,000. b、the liabilities of the bank increase by $1,000,000. c、the liabilities of the bank increase by $800,000. d、reserves increase by $160,000.
46、【单选题】if a bank has $1 million of deposits, a required reserve ratio of 20 percent, and $300,000 in reserves, it need not rearrange its balance sheet if there is a deposit outflow of _________ a、$50,000. b、$75,000. c、$150,000. d、either (a) or (b) of the above.
47、【单选题】if a bank has $100,000 of deposits, a required reserve ratio of 20 percent, and $40,000 in reserves, then the maximum deposit outflow it can sustain without altering its balance sheet is _________ a、$30,000. b、$25,000. c、$20,000. d、$10,000.
48、【单选题】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、$25,000.
49、【单选题】if a bank has $10 million of deposits, a required reserve ratio of 10 percent, and $2 million in reserves, then it does not have enough reserves to support a deposit outflow of _________ a、$1.2 million. b、$1.1 million. c、$1 million. d、either a or b of the above.
50、【单选题】banks can protect themselves from the disruption caused by deposit outflows by _________ a、holding excess reserves. b、selling securities. c、"calling in" loans. d、doing all of the above. e、doing only a and b of the above.
51、【单选题】in general, banks would prefer to meet deposit outflows by _________ rather than _________ a、selling loans; selling securities. b、selling loans; borrowing from the fed. c、borrowing from the fed; selling loans. d、"calling in" loans; selling securities.
52、【单选题】which of the following do banks hold as insurance against the high cost of deposit outflows? a、excess reserves b、secondary reserves c、bank equity capital d、each of the above e、only a and b of the above
53、【单选题】which is the least costly way for a bank to handle deposit outflow? a、hold excess reserves. b、borrow from other banks. c、sell securities. d、call in loans.
54、【单选题】the _________ are the costs associated with deposit outflows, the _________ excess reserves banks will want to hold. a、lower; more b、higher; less c、higher; more d、none of the above, since deposit outflows cannot be anticipated
55、【单选题】a bank can reduce its total amount of loans outstanding by _________ a、"calling in" loans, that is, by not renewing some loans when they come due. b、selling loans to other banks. c、selling loans to the federal reserve. d、doing all of the above. e、doing only a and b of the above.
56、【单选题】which of the following statements are accurate descriptions of modern liability management? a、greater flexibility in liability management has allowed banks to increase the proportion of their assets held in loans. b、new financial instruments enable banks to acquire funds quickly. c、the introduction of negotiable cds have significantly reduced the percentage of funds that banks borrow from one another to finance loans. d、all of the above have occurred since 1960. e、only a and b of the above have occurred since 1960.
57、【单选题】banks fail when the value of bank _________ falls below the value of _________, causing the bank to become insolvent. a、reserves; required reserves b、loans; secondary reserves c、assets; liabilities d、income; expenses
58、【单选题】a bank fails when the value of its _________ falls below the value of _________, causing the bank to become insolvent. a、reserves; required reserves b、loans; secondary reserves c、securities; deposit liabilities d、assets; liabilities
59、【单选题】bank failure is less likely to occur when a bank _________ a、holds less in u.s. government securities. b、suffers large deposit outflows. c、holds more excess reserves. d、has less bank capital.
60、【单选题】a bank failure is more likely to occur when _________ a、a bank holds less in u.s. government securities. b、a bank suffers large deposit outflows. c、a bank holds less equity capital. d、each of the above occur. e、only a and b of the above occur.
61、【单选题】the largest source of bank income is _________ a、interest on loans. b、interest on securities. c、service charges on deposit accounts. d、noninterest income.
62、【单选题】the largest operating expense for a bank is _________ a、salaries and employee benefits. b、interest paid on discount loans. c、interest paid on federal funds borrowed from other banks. d、interest paid on deposits.
63、【单选题】on a bank's income statement the provision for loan losses is an _________ item and represent the amount of _________ in the bank's loan loss reserves. a、income; decrease b、income; increase c、expense; decrease d、expense; increase
64、【单选题】on a bank's income statement, the amount available to keep as retained earning or pay to the stockholders in dividends is the bank's _________ a、net income. b、net operating income. c、net extraordinary items. d、net interest margin.
65、【单选题】net profit after taxes per dollar of equity capital is a basic measure of bank profitability called _________ a、return on assets. b、return after taxes. c、return on equity. d、equity multiplier.
66、【单选题】net profit after taxes per dollar of assets is a basic measure of bank profitability called _________ a、return on assets. b、return on capital. c、return on equity. d、return after taxes.
67、【单选题】the amount of assets per dollar of equity capital is called the _________ a、asset ratio. b、equity ratio. c、equity multiplier. d、asset multiplier. e、return on equity.
68、【单选题】for a given return on assets, the lower is bank capital, _________ a、the lower is the return for the owners of the bank. b、the higher is the return for the owners of the bank. c、the lower is the credit risk for the owners of the bank. d、both a and c of the above.
69、【单选题】in the absence of regulation, banks would probably hold _________ a、too much capital, reducing the efficiency of the payments system. b、too much capital, reducing the profitability of banks. c、too little capital, increasing the return on equity. d、none of the above.
70、【单选题】an argument that supports a regulated minimum capital requirement is that banks that hold too little capital _________ a、are unprofitable. b、impose costs on other banks because they are more likely to fail. c、have an unfair competitive advantage over savings and loans. d、all of the above.
71、【单选题】conditions that likely contributed to a credit crunch in 1990-92 include _________ a、a decline in bank capital caused by loan losses due to falling real estate prices. b、regulated hikes in bank capital requirements. c、falling interest rates that raised interest- rate risk, causing banks to choose to hold more capital d、all of the above. e、only a and b of the above.
72、【单选题】conditions that likely contributed to a credit crunch in 1990-92 include _________ a、a hike in the equity multiplier caused by loan losses due to falling real estate prices. b、regulated hikes in bank capital requirements. c、falling interest rates that raised interest-rate risk, causing banks to choose to hold more capital. d、all of the above. e、only a and b of the above.
73、【单选题】examples of off-balance-sheet activities include _________ a、loan sales. b、foreign exchange market transactions. c、trading in financial futures. d、all of the above. e、only a and b of the above.
74、【单选题】examples of off-balance-sheet activities include _________ a、loan sales. b、extending loans to depositors. c、borrowing from other banks. d、all of the above.
75、【单选题】the danger of banks engaging in activities such as trading in financial futures and interest-rate swaps is that these activities allow banks to _________ a、increase profits. b、decrease risks. c、avoid bank regulations. d、engage in speculation.
76、【单选题】when a bank sells all or part of the cash stream from a specific loan, _________ a、it thereby removes the loan from its balance sheet. b、it usually does so at a loss. c、it usually does so at a profit. d、both a and b of the above. e、both a and c of the above.
77、【单选题】a bank _________ a、obtains funds by borrowing and by issuing liabilities. b、makes profits by charging an interest rate on their asset holdings of securities and loans that is lower than the interest and other expenses on their liabilities. c、both a and b. d、neither a nor b.
78、【单选题】______ were once the most common type of nontransaction deposit. a、checking accounts b、time deposits c、savings accounts d、none of the above
79、【单选题】discount loans are also known as _________. a、interest-free loans b、advances c、credits d、market loans
80、【单选题】bank capital _________ a、is raised by selling new equity. b、is a cushion against a drop in the value of its assets. c、comes from retained earnings. d、all of the above.
81、【单选题】before the 1960s _________ a、over half of the sources of bank funds were obtained through checkable deposits that by law could not pay any interest. b、banks mostly borrowed from other banks to meet their reserve needs. c、both (a) and (b) d、neither (a) nor (b)
82、【单选题】with large banks beginning to explore ways in which the liabilities on their balance sheet could provide them with reserves and liquidity, this led to _________ a、the expansion of overnite loan markets. b、the development of negotiable cds. c、the ability of money center banks to acquire funds quickly. d、all of the above.
83、【单选题】in the late 1960s _________ a、money market banks no longer needed to depend on checkable deposits as the primary source of bank funds. b、aggressively set target goals for their asset growth. c、the new management of liabilities created more flexibility. d、all of the above.
84、【判断题】since their introduction in 1961, negotiable cds have become an important source of bank funds.
85、【判断题】deposits that banks keep in accounts at the federal reserve less vault cash is called reserves.
86、【判断题】when a bank receives additional deposits, it gains an equal amount of reserves; when it loses deposits, it loses an equal amount of reserves.
87、【判断题】to keep enough cash on hand to meet depositors' demand for withdrawals, banks must engage in liquidity management.
88、【判断题】required reserves are insurance against the costs associated with deposit outflows. the higher the costs associated with deposit outflows, the more required reserves banks will want to hold.
89、【判断题】a bank maintains bank capital to lessen the chance that it will become insolvent.
90、【判断题】given a bank's return on assets, the higher the bank capital, the higher the return for the owners of the bank.
91、【判断题】loan loss reserves are an asset on a bank's balance sheet.
92、【判断题】off-balance-sheet activities consist of trading financial instruments and generating income from fees and loan sales, all of which affect bank profits but are not visible on bank balance sheets.
93、【判断题】the value-at-risk method for estimating a bank's risk exposure measures the losses a bank could incur under a worst-case scenario.
94、【判断题】the share of bank operating income earned from off-balance sheet activities has increased over the past two decades.
95、【判断题】since a bank's assets exceed its equity capital, the return on assets always exceeds the return on equity.
96、【判断题】a loan commitment is an agreement to provide a loan up to a certan dollar amount if a customer requests the loan during a specific time period.
97、【判断题】non-transaction deposits are the primary source of bank funds.
98、【判断题】owners cannot write checks on non-transaction deposits, but the interest rate paid on these deposits are usually higher than those on checkable deposits.
10.2课后作业
1、【单选题】an investment bank is a financial institution that _________ a、bundles small deposits into larger loans. b、helps corporations raise funds. c、holds most of its assets in commercial paper. d、does all of the above. e、does only a and b of the above.
2、【单选题】the glass-steagall act _________ a、separated commercial and investment banking. b、made it illegal for a commercial bank to buy or sell securities on behalf of its customers. c、made it illegal for investment banks to engage in the underwriting of corporate securities. d、did all of the above. e、did only a and b of the above.
3、【单选题】investment banks sell _________ securities to the public, and brokerage firms sell _________ securities to the public. a、new; existing b、new and existing; existing c、existing; new d、existing; new and existing
4、【单选题】the primary function of investment banks is _________ a、the bundling of deposits into loans. b、extending long-term credit to other financial institutions. c、helping corporations raise funds. d、providing credit to firms engaged in international trade.
5、【单选题】the primary function of investment banks is to _________ a、extend credit to stock brokers and dealers. b、extend credit to investors. c、extend credit to corporations. d、help corporations issue new securities.
6、【单选题】which is not an activity of investment banks? a、underwriting new issues of corporate stocks and bonds. b、acting as deal-makers in mergers. c、acting as intermediaries in the buying and selling of businesses or parts of businesses. d、underwriting new issues of federal government bonds.
7、【单选题】tasks that investment bankers perform when acting as underwriters to sell securities to the public include: _________ a、pricing the security. b、preparing the filings required by the securities and exchange commission. c、arranging for the security to be rated. d、all of the above. e、only a and b of the above.
8、【单选题】investment banks find it less difficult to price securities if the firm has prior issues currently selling in the market, called _________ a、secondary issues. b、seasoned issues. c、outstanding issues. d、experienced issues.
9、【单选题】the process of underwriting a stock or bond issue requires that the investment bank _________ a、assure investors that the issue will provide them a high return. b、purchase the entire issue at a predetermined price if the quantity demanded by consumers is insufficient at the predetermined price. c、purchase the entire issue at a predetermined price and then resell it in the market. d、do both a and b of the above.
10、【单选题】the registration statement the securities underwriter files with the sec contains information about _________ a、the firm b、how the funds will be used. c、management d、all of the above. e、only a and b of the above.
11、【单选题】sec registration is _________ a、required for all securities. b、required if less than $1.5 million in securities are issued per year. c、not required for securities that are sold through a private placement. d、required if the securities mature in less than one year. e、not required if securities are underwritten by a reputable investment bank.
12、【单选题】by law, investors must be given a portion of the registration statement before they can invest in a new security. this document is called a _________ a、prospectus. b、proxy statement. c、fiduciary warrant. d、debenture.
13、【单选题】investment banks advertise upcoming securities offerings with block ads in the wall street journal. such an ad is called a _________ a、tombstone. b、marker. c、prospectus. d、registration statement.
14、【单选题】most investment banks are attached to _________ a、large commercial banks. b、large brokerage houses. c、finance companies. d、large nonfinancial corporations.
15、【单选题】from an investment banker's perspective, the best outcome occurs when a new issue is _________ a、undersubscribed. b、fully subscribed. c、oversubscribed. d、syndicated.
16、【单选题】investment banks may lose _________ if new securities issues are _________. a、large amounts of money; oversubscribed b、large amounts of money; fully subscribed c、future business; oversubscribed d、future business; undersubscribed
17、【单选题】the largest u.s. underwriter of global debt and equity issues, as of 2003, was _________ a、merrill lynch. b、citigroup. c、morgan stanley. d、goldman sachs.
18、【单选题】often investment bankers will form a group, each one buying only a portion of the new securities to be issued. such a group is called an underwriting _________ a、alliance. b、syndicate. c、association. d、guild.
19、【单选题】in a _________ agreement, the investment banker makes no guarantee regarding the price the issuing firm will receive, but agrees to sell the securities on a commission basis. a、best-effort b、brokered c、private-placement d、jump-start
20、【单选题】under best-efforts underwriting, the underwriter _________ a、pays for the entire security issue. b、sells the security on a commission basis. c、spreads the risk among different brokerage houses. d、makes a special appeal to the securities and exchange commission to delay the issue.
21、【单选题】private placements _________ a、do not require the services of investment bankers. b、need not be registered with the sec. c、are more common in the sale of stocks than for bonds. d、all of the above. e、only a and b of the above.
22、【单选题】the most active investment banking firm in the private placement market is _________ a、merrill lynch. b、lehman brothers. c、goldman sachs. d、morgan stanley.
23、【单选题】the buyers of private placement issues are most likely to be _________ a、insurance companies. b、pension funds. c、investment banks. d、all of the above. e、only a and b of the above.
24、【单选题】the buyers of private placement securities are most likely to be _________ a、insurance companies. b、pension funds and mutual funds. c、commercial banks. d、all of the above. e、only a and b of the above.
25、【单选题】which of the following statements about private placements are true? a、private placements are more common for the sale of bonds than for stocks. b、investment bankers, though not required for a private placement, often facilitate the transaction. c、investment bankers help the issuing firm file the paperwork required by the sec. d、all of the above are true. e、only a and b of the above are true.
26、【单选题】investment bankers have been active in the mergers and acquisitions market since the 1960s. their contributions have included _________ a、helping firms that want to acquire another firm locate a firm to pursue. b、helping would-be acquirers solicit shareholders through a tender offer. c、helping target firms ward off undesired takeover attempts. d、all of the above. e、only a and b of the above.
27、【单选题】which of the following is not a step in the process by which an investment bank assists in the sale of a company or corporate division? a、preparation of a confidential memorandum b、negotiation of a letter of intent c、preparation of a definitive agreement d、forming a syndicate of purchasers
28、【单选题】the best known investment banker involved in mergers and acquisitions, credited with inventing the junk bond market, is _________ a、ivan boskey. b、michael milken. c、james garner. d、michael douglas.
29、【单选题】_________ perform their main function in the primary market for securities and _________ perform their main function in the secondary market. a、investment banks; securities brokers and dealers b、securities brokers and dealers; investment banks c、securities brokers; securities dealers d、securities dealers; securities brokers
30、【单选题】in a primary market, _________ sell new issues of securities; in a secondary market, _________ assist in trading previously issued securities. a、securities dealers; securities brokers b、securities brokers; securities dealers c、investment banks; securities brokers and dealers d、securities brokers and dealers; investment banks
31、【单选题】which of the following best explains the difference between brokers and dealers? a、brokers are pure middlemen; dealers make markets by standing ready to buy and sell at given prices. b、dealers are pure middlemen; brokers make markets by standing ready to buy and sell at given prices. c、dealers link up buyers and sellers, but do not stand ready to buy and sell from their inventories of securities; brokers stand ready to buy and sell from their inventories of securities. d、there is no difference between brokers and dealers.
32、【单选题】securities dealers _________ a、hold inventories of securities, which they sell to customers who want to buy. b、hold securities that they have purchased from customers who wanted to sell. c、are called market takers, as they have significantly cut into the market that brokers used to dominate. d、do all of the above. e、do only a and b of the above.
33、【单选题】securities dealers _________ a、sell securities out of their inventories to customers who want to buy. b、buy securities, which they add to their inventories, from customers who want to sell. c、are largely responsible for the health and growth of small businesses in the united states. d、do all of the above. e、do only a and b of the above.
34、【单选题】by making a market in thinly traded stocks, securities dealers solve the _________ trading problem, which is of particular benefit to _________ businesses. a、synchronous; large b、synchronous; small c、nonsynchronous; large d、nonsynchronous; small
35、【单选题】which of the following is not a service securities brokers offer their clients? a、holding customers' stock for safekeeping b、providing insurance against loss of the securities c、providing insurance against loss of value of the securities d、extending margin credit
36、【单选题】an instruction to a securities agent to buy or sell the security at the current market price is called a _________ a、limit order. b、market order. c、stop loss order. d、margin order.
37、【单选题】an instruction to a securities agent to sell a stock when it reaches a specific price is a _________ a、short sell. b、market order. c、limit order. d、stop loss order.
38、【单选题】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.
39、【单选题】to take advantage of anticipated stock price decreases, an investor would use a _________ a、a market order. b、a limit order. c、a short sell. d、margin credit.
40、【单选题】which of the following statements about cash management accounts (cmas) are true? a、the cash management account was developed in 1977 by merrill lynch. b、the advantage of brokerage-based cash management accounts is that they make it easier to buy and sell securities. c、as a result of cmas, the distinction between banking activities and the activities of nonbank financial institutions has become more clearly defined. d、all of the above are true. e、only a and b of the above are true.
41、【单选题】the largest full-service broker is _________ a、merrill lynch. b、charles schwab & company. c、ameritrade. d、smith barney.
42、【单选题】a full-service broker offers its clients all of the following except _________ a、execution of trades on request. b、low transactions fees. c、research and investment advice. d、development of long-term customer relationships.
43、【单选题】an investment pool is formed to _________ a、manipulate the market by spreading false rumors. b、lower brokerage fees by combining security purchases. c、share investment advice among member investors. d、take advantage of tax breaks introduced by the 1933 and 1934 securities acts.
44、【单选题】a _________ is a specialized firm that finances young, start-up companies. a、venture capital firm b、finance company c、small-business finance company d、capital-creation company
45、【单选题】which of the following provides funds to companies not yet ready to sell securities to the public? a、investment banks b、securities brokers and dealers c、venture capital firms d、none of the above
46、【单选题】venture capital firms are usually organized as _________ a、closed-end mutual funds. b、limited partnerships. c、corporations. d、nonprofit businesses.
47、【单选题】which of the following is not a characteristic feature of venture capital firms? a、funding just one or a small number of firms b、holding equity in the firms that are funded c、having a long-term investment horizon d、providing advice and assistance to the firms that are funded
48、【单选题】which of the following is a characteristic feature of venture capital firms? a、developing a portfolio of companies b、holding debt in the firms that are funded c、allowing firms to use the funds as they see fit d、having a short-term investment horizon
49、【单选题】the sources of venture capital funding have _________ a、shifted from wealthy individuals to pension funds and corporations. b、shifted from pension funds and corporations to wealthy individuals. c、decreased since 1990. d、none of the above.
50、【单选题】a typical venture capital firm has a _________ number of investors who each contribute a _________ amount of money to the fund. a、large; small b、small; large c、large; large d、small; small
51、【单选题】in 2000 the bulk of venture capital funds were used for _________ a、seed investing. b、early stage investing. c、later stage investing. d、final stage investing.
52、【单选题】which of the following statements about venture capital funding is not correct? a、exiting an investment can occur through an initial public offering or by merger or acquisition. b、venture capital investing is highly risky. c、venture capital firms may focus on a limited geographic area or on specific industries to facilitate monitoring their investments. d、firms hope to exit a start-up firm in 3-5 years.
53、【单选题】the 20-year average return of venture capital firms has been about _________. a、50% b、8% c、20% d、100%
54、【单选题】since the stock market decline in 2000, the number of companies funded and the total funds invested by venture capital firms have _________ a、held steady. b、declined. c、increased slightly. d、increased sharply.
55、【单选题】the ______ of the volume handled by brokers and dealers is in the publicly held securities. a、vast majority b、low percentage c、total amount d、none of the above.
56、【单选题】with private investing _________ a、capital is raised by selling securities to the public. b、capital is raised by issuing new shares of stock. c、a limited partnership is formed that raises money from a small number of high-wealth investors. d、all of the above.
57、【单选题】which is an advantage to a private equity buyout? a、they are subject to the controversial regulations included in the 2002 sarbanes-oxley act. b、the ceos frequently have more time and flexibility to enact changes need to turn around sub-par companies. c、both a and b. d、neither a nor b.
58、【单选题】when taking a particular course of action for a private equity firm, the ceo of a privately held company needs to convince _________ that it is a good decision. a、the shareholders b、the managing partners c、no one d、both (a) and (b)
59、【单选题】there are _________ risk and _________ returns to investors in private equity buyouts. a、high; low b、low; high c、high;high d、low; low
60、【单选题】which is a description of a private equity firm? a、public shares are retired. b、a public company goes private. c、the firm is no longer subject to controls and oversight required of publicly held companies. d、all of the above.
61、【判断题】the glass-steagall act made it illegal for an investment bank to buy or sell securities on behalf of its customers.
62、【判断题】when a firm issues stock for the first time in an initial public offering, it is difficult for an investment bank to determine what the correct price should be.
63、【判断题】an undersubscribed issue occurs when sales agents have been unable to generate sufficient interest among their customers to sell all the securities by the issue date.
64、【判断题】investment banks form syndicates to reduce the risk involved in selling new securities.
65、【判断题】resisted takeovers are called hostile.
66、【判断题】private placements are more common for the sale of stocks than for bonds.
67、【判断题】investment bankers perform a number of tasks required to sell securities to the public, among them pricing the security, preparing the filings required by the sec, arranging for the security to be rated, and marketing the security through their contacts with brokerage houses.
68、【判断题】one disadvantage of the private placement of securities issues is the high cost of registering the issue.
69、【判断题】junk bonds are high-risk, high-return equity securities that were used primarily to finance takeover attempts.
70、【判断题】the securities acts amendment of 1975 abolished fixed commissions.
71、【判断题】an investment pool is formed to manipulate the market for a stock by spreading false rumors about the health of the firm.
72、【判断题】venture capital firms reduce risk by investing in only a few companies which can be carefully monitored and nurtured.
73、【判断题】investors in venture capital firms expect to profit quickly from their investment.
74、【判断题】an additional perk of a private equity firm is that the profits for both ceos and the partners are taxed at the 15% capital gains rather than the 35% rate they would suffer if the income was received as income.
75、【判断题】in a typical private equity buyout, a partnership is formed and private equity investors are contacted to pledge participation.
76、【判断题】within the broad universe of private equity sectors, the two most common are venture funds and capital buyouts.