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fin mgt/instit
chapter 1-3/6
| Question | Answer | |||
|---|---|---|---|---|
| funds are provided to the initial issuer of securities in the | primary market | secondary market | deficit market | surplus market |
| common stock is an example of a(n) | equity security | debt security | money market security | both A & B |
| a five year security was purchased two years ago by an investor who plans to resell it. the security will be sold by the investor in the so-called | secondary market | primary market | deficit market | surplus market |
| as a result of more favorable economic conditions, there is a(n) ______ demand for loanable funds, causing an _____ shift in the demand curve | increased; outward | decreased; inward | decreased; outward | increased; inward |
| the equilibrium interest rate | equates the aggregate demand for funds with the aggregate supply of loanable funds | equates the elasticity of the aggregate demand and supply for loanable funds | decreases as the aggregate supply of loanable funds decreases | increases as the aggregate demand for loanable funds decreases |
| if economic expansion is expected to decrease, the demand for loanable funds should _____ and interests rates should ______ | decrease; decrease | increase; increase | increase; decrease | decrease; increase |
| the theory for the term structure of interest rates that says the shape of the yield curve is determined solely by expectations of future interest rates is called the | pure expectations theory | segmented markets theory | liquidity premium theory | theory of rational expectations |
| Treasury bills | have an active secondary market | have a maturity of up to five years | are commonly sould at par value | commonly offer coupon payments |
| if research showed that anticipation about future interest rates was the only important factor for all investors in choosing short term or long term securities, this would support the argument made by the | expectations theory | liquidity premium theory | segmented markets theory | A & B |
| other things being equal, foreign governments and corporations would demand _______ U.S. funds in their local interest rates were lower than U.S. rates. Therefore, for a given set of foreign interest rates, foreign demand for U.S. fund is _______ related | less; inversely | more; positively | less; positively | more; inversely |
| Financial Markets facilitating the flow of short term funds with maturities of less than one year are known as | money markets | capital markets | primary markets | secondary markets |
| long-term debt securities tend to have ______ expected return and ______ risk than lower securities | higher; higher | lower; lower | lower; hhigher | higher; lower |
| which of the following are not considered depository financial institutions? | finance companies | commercial banks | savings institutions | credit unions |
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shannon8709