Question : 171.Banks a.playaroleincreatinganassetthatpeoplecanuseasamediumofexchange. b.arefinancialintermediaries,butmutualfundsarenotfinancialintermediaries. c.arefinancialmarkets,as : 1261795

 

171.Banks

a.playaroleincreatinganassetthatpeoplecanuseasamediumofexchange.

b.arefinancialintermediaries,butmutualfundsarenotfinancialintermediaries.

c.arefinancialmarkets,asarebondmarkets.

d.Alloftheabovearecorrect.

172.Whoacceptsalloftheriskassociatedwithamutualfund’sportfolioofstocksand/orbonds?

a.thefund’smanagers

b.thefund’sshareholders

c.thefederalgovernment

d.thecorporationsthatoriginallyissuedthestocksand/orbondsheldbythefund

173.Thebondmarket,thestockmarket,banks,pensionfunds,andinsurancecompaniesareallfinancial

a.systems.

b.markets.

c.institutions.

d.intermediaries.

174.Whichofthefollowingbothmaketheinterestrateonabondhigherthanotherwise?

a.theinterestitpaysistaxedanditwasissuedbyafinanciallystrongcorporation

b.theinterestitpaysistaxedanditwasissuedbyafinanciallyweakcorporation

c.theinterestitpaysistaxexemptanditwasissuedbyafinanciallystrongcorporation

d.theinterestitpaysistaxexemptanditwasissuedbyafinanciallyweakcorporation

175.Whichofthefollowingwouldbothmaketheinterestrateonabondhigherthanotherwise?

a.theinterestitpaysistaxedanditislongterm

b.theinterestitpaysistaxedanditisshortterm

c.theinterestitpaysistaxexemptanditislongterm

d.theinterestitpaysistaxexemptanditisshortterm

176.Midwesterncorporationissuesbonds.Southerncorporationissuesstock.Whichcorporationusedequityfinancing?

a.bothMidwesterncorporationandSoutherncorporation

b.MidwesterncorporationbutnotSoutherncorporation

c.SoutherncorporationbutnotMidwesterncorporation

d.neitherMidwesternnorSoutherncorporation

177.Whichofthefollowingisacertificateofindebtedness?

a.bothstocksandbonds

b.stocksbutnotbonds

c.bondsbutnotstocks

d.neitherstocksnorbonds

178.Whichofthefollowinginvolvesfinancialintermediation?

a.abankmakesaloan

b.ahouseholdbuysstockissuedbyacorporation

c.aforeigngovernmentpurchasesU.S.governmentbonds

d.Alloftheabovearecorrect.

179.Ifafirmwantstoborrowitcan

a.supplybondsbysellingthem.

b.supplybondsbybuyingthem.

c.demandbondsbysellingthem.

d.demandbondsbybuyingthem.

180.Abondbuyerisa

a.saver.Longtermbondshavelessriskthanshorttermbonds.

b.saver.Longtermbondshavemoreriskthanshorttermbonds.

c.borrower.Longtermbondshavelessriskthanshorttermbonds.

d.borrower.Longtermbondshavemoreriskthanshorttermbonds.

181.Acreditorofacorporationholds

a.bondssoldbythecorporation.Ifthecorporationexperiencesfinancialdifficultiesstockholdersarepaidbeforebondholders.

b.bondssoldbythecorporation.Ifthecorporationexperiencesfinancialdifficultiesbondholdersarepaidbeforestockholders.

c.stockssoldbythecorporation.Ifthecorporationexperiencesfinancialdifficultiesstockholdersarepaidbeforebondholders.

d.stockssoldbythecorporation.Ifthecorporationexperiencesfinancialdifficultiesbondholdersarepaidbeforestockholders.

182.Whichofthefollowingstatementsaboutmutualfundsiscorrect?

a.Amutualfundisnotafinancialintermediary.

b.Adisadvantageofbuyingmutualfundsisalackofdiversification

c.Peoplewhobuysharesfromamutualfundareguaranteedaminimumreturn.

d.Onaverageindexfundsoutperformmanagedfunds.

183.Bydefinition,equityfinance

a.isaccomplishedwhenunitsofgovernmentsellbonds.

b.isaccomplishedwhenfirmssellbonds.

c.isaccomplishedwhenfirmssellsharesofstock.

d.involves“fair”interestratesordividendyields.

184.Theindirectprovisionoffundsbysaverstoborrowersisaccomplishedby

a.banksandotherfinancialmarkets.

b.banksandotherfinancialintermediaries.

c.stockmarketsandotherfinancialmarkets.

d.Alloftheabovearecorrect.

185.Ifafirm’sprice­earningsratioisrelativelylow,thenitmightbeanindicationthat

a.thedemandforthestockisrelativelyhigh.

b.thesupplyofthestockisrelativelylow.

c.peopleexpectthefirm’searningstorise.

d.peopleexpectthefirm’searningstofall.