Money, Banking and Financial Markets, 2/e Stephen G ...
[Pages:270]Page 1
Money, Banking and Financial Markets, 2/e Stephen G Cecchetti, Brandeis University
I see old paper's and assignments most of mcq's are given us from this book I want to share all data to my all fellow's.100% Correct Answers Talib-e-Dua Salman Asif MBA (2nd semester)
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Quiz # 1
Q#1 IN CORRECT
Which item below is not one of the five parts of the Financial System? A) Money B) Central banks C) Financial Markets D) Credit cards
Reference Chapter: The Five Parts of the Financial System.
Q#22 CORRECT
In the United States control of the money supply is given to: A) the President. B) Congress. C) the Secretary of the Treasury. D) the Federal Reserve.
Reference Chapter: The Five Parts of the Financial System.
Q#3
Which of the following statements best describes financial markets? A) Financial markets raise the cost and increase the speed of buying and
selling financial instruments since people are earning fees for these transactions. B) Financial markets increase the speed of buying and selling, and
they also decrease the cost. C) Financial markets are a good example of unregulated markets. D) b and c
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Reference Chapter: The Five Parts of the Financial System.
Q#4
The New York Stock Exchange is an example of:
A) a financial instrument.
B) a central bank.
C) a financial market.
D) All of the above.
Reference Chapter: The Five Parts of the Financial System.
Q#5
Which of the following is NOT an accurate description of a trend associated with the U.S. financial system over the last few decades?
A) It has become easier to withdraw funds from checking accounts.
B) Financial innovations have made it easier for lower income households to participate in financial markets through the use of mutual funds.
C) Banks have provided an expanding mix of services
D) The Fed has become more secretive concerning its policy actions.
Reference Chapter: The Five Parts of the Financial System.
Q#6
Which of the following is NOT likely to be a goal of a central bank?
deposits
A) encouraging the use of paper currency instead of checking
B) maintaining a low inflation rate
C) encouraging economic growth
D) maintaining a stable financial system
Reference Chapter: The Five Parts of the Financial System
m.salman.asif2006@
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Q#7
The five core principles of Money and Banking include each of the following except: A) all people act rationally.
B) time has value. C) information is the basis for decisions. D) risk requires compensation. Reference Chapter: The Five Core Principles of Money and Banking.
Q#8
The amount that a typical person would be willing to give up today (in the absence of anticipated deflation) to receive $1,000 next year is:
A) less than $1,000. B) equal to $1,000. C) greater than $1,000. D) more or less than $1,000, depending on the level of the interest rate. Reference Chapter: The Five Core Principles of Money and Banking
Q#9
When an individual obtains a student loan and makes all of the regular monthly payments, the sum of the payments made will exceed the initial amount of the loan. This is due primarily to the core principle that states that:
A) most people do not pay back student loans. B) time has value.
C) markets are sometimes inefficient at allocating resources. D) information is the basis for decisions. Reference Chapter: The Five Core Principles of Money and Banking.
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Q#10
Banks usually offer lower rates of interest to people willing to keep their funds in the bank for a short time because:
A) the banks really do not want these people as customers.
B) banks really do not want a lot of people coming into the bank.
C) bankers realize time has value and people need to be compensated if they are to keep their money in the bank longer.
D) All of the above.
Reference Chapter: The Five Core Principles of Money and Banking.
Q#11
The statement "risk requires compensation" implies:
A) people only accept risk when they absolutely have to.
B) people will only accept risk when they are rewarded for doing so.
C) people do not take risk.
D) people will pay to avoid risk.
E) b and d
Reference Chapter: The Five Core Principles of Money and Banking.
Q#12
The principle that "risk requires compensation" does NOT explain why:
bonds.
A) junk bonds provide a higher average return than do high-grade corporate
B) college students pay high interest rates on credit cards than do adults with established credit histories.
C) the interest rate is higher on 5-year CDs than on 1-year CDs.
loans.
D) individuals with poor credit ratings must pay higher interest rates on car
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Reference Chapter: The Five Core Principles of Money and Banking.
Q#13
The core principles of money and banking would imply that if more students didn't pay back their student loans:
A) student loans may become more difficult to obtain.
B) the interest rate on student loans would increase.
C) fewer people may attend college.
D) All of the above.
Reference Chapter: The Five Core Principles of Money and Banking.
Q#14
Monetary policy is best described as:
A) attempts to keep inflation constant.
B) determining the denominations and supply of a country's currency.
C) one of the most important functions of Congress.
stable.
D) attempts to keep inflation low and stable and growth high and
Reference Chapter: The Five Core Principles of Money and Banking.
Q#15
When an individual is faced with a choice between receiving a random income that on average equals $40,000 per year or a certain income of $40,000 per year, most individuals prefer the certain income to the one that varies because:
A) information is the basis for decisions.
B) stability improves welfare.
C) markets determine prices and allocate resources.
D) time has value.
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Reference Chapter: The Five Core Principles of Money and Banking
Quiz # 2
Q#1
A bank is an example of: A) a financial instrument. B) a financial market. C) a financial institution D) None of the above is correct.
Reference Chapter: The Five Parts of the Financial System.
Q#2
Financial instruments are: A) used to transfer resources from savers to investors. B) used to transfer risk. C) sold in financial markets. D) All of the above are correct.
Reference Chapter: The Five Parts of the Financial System.
Q#3
Money: A) consists solely of currency. B) consists solely of gold and silver coins. C) is used to purchase goods and services and to store wealth. D) is only rarely used to pay for transactions today.
Reference Chapter: The Five Parts of the Financial System.
m.salman.asif2006@
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Q#4
Which of the following correctly describes trends associated with financial instruments in the U.S.?
A) Transactions have become relatively more costly over time due to rising brokerage fees.
B) Mutual funds now allow less wealthy households to purchase a share of a diversified collection of financial assets at a relatively low cost.
C) The variety of types of financial instruments that are sold in financial markets has been reduced substantially over time.
D) The use of electronic networks to trade financial instruments has declined during the past 5 years in response to fears over the reliability and security of these networks. Reference Chapter: The Five Parts of the Financial System.
Q#5
The central bank for the U.S. today is:
A) the U.S. Treasury.
B) the Federal Reserve.
C) the First Bank of the U.S.
D) the Second Bank of the U.S. Reference Chapter: The Five Parts of the Financial System.
Q#6
Mutual funds pool the funds of savers and use them to buy:
A) shares in mutual savings banks only.
B) a variety of financial instruments.
C) shares in the Federal Reserve system. D) None of the above is correct.
Reference Chapter: The Five Parts of the Financial System.
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