Question :
71. Which of the following least liquid? A. Foreign currencyB. U.S. Treasury bondsC. Rare coinsD. Savings : 1284420
71. Which of the following is least liquid?
A. Foreign currency
B. U.S. Treasury bonds
C. Rare coins
D. Savings deposit
72. Financial markets and intermediaries:
A. channel savings to real investment.
B. enable investors and businesses to reduce risk.
C. provide liquidity.
D. all of these.
73. Which of the following functions does not require financial markets?
A. Transporting of cash across time
B. Provision of liquidity
C. Risk reduction by investment in diversified portfolios
D. Provision of trade information
74. For the consumer, a credit card:
A. transports money forward in time.
B. provides liquidity.
C. is a convenient way to pay.
D. all of these.
75. Which of the following actions does not help reduce risk?
A. Extending the service warranty for your notebook
B. Converting your money market account to a mutual fund account
C. Contracting to sell your farm produce to the neighborhood grocery
D. Buying Japanese yen now when you plan to study in Japan next year
76. Which of the following information is not provided by the financial markets?
A. The price of six ounces of gold
B. The cost of borrowing $500,000 for 5 years
C. Microsoft’s earnings in 2002
D. The cost of wiring one million yen to Japan
77. The opportunity cost of capital:
A. is the interest rate that the firm pays on a loan from a financial institution.
B. is the maximum acceptable rate of return on a project.
C. is the minimum acceptable rate of return on a project.
D. is always less than 10%.
78. Who was responsible for the financial crisis of 2007-2009?
A. The U.S. Federal Reserve, for its policy of easy money
B. The U.S. government, for pushing banks to expand credit for low-income housing
C. Bankers, who aggressively promoted and resold subprime mortgages
D. All of these
79. A capital investment that generates a 10% rate of return is worthwhile if:
A. corporate bonds of similar risk offer 8% rates of return.
B. corporate bonds of similar risk offer 10% rates of return.
C. top-quality corporate bonds offer 10% rates of return.
D. the expected rate of return on the stock market is 12%.
80. The cost of capital:
A. is the expected rate of return on capital investment.
B. is an opportunity cost determined by the risk-free rate of return.
C. is the interest rate that the firm pays on a loan from a bank or insurance company.
D. for risky investments is normally higher than the firm’s borrowing rate.
81. In the context of housing, what is an ARM?
A. A mortgage with high initial payments, offset by significantly lower payments later
B. A mortgage with low initial payments, offset by significantly higher payments later
C. A mortgage with no initial payments, offset by significantly high payments later
D. A mortgage with equal payments per period
82. During the Financial Crisis of 2007-2009, the U.S. government bailed out the following firms except:
A. AIG.
B. Fannie Mae.
C. Lehman Brothers.
D. all of these.
