Question 1

Which of the following is not a financial intermediary?

Accepted Answer

A)  A commercial bank 
B)  A commercial finance company 
C)  An index fund 
D)  An investment bank 
A)  A commercial bank 
B)  A commercial finance company 
C)  An index fund 
D)  An investment bank

Question 2

Commercial paper is mostly held by

Accepted Answer

A)  corporations. 
B)  commercial banks. 
C)  bond mutual funds. 
D)  money market mutual funds. 
A)  corporations. 
B)  commercial banks. 
C)  bond mutual funds. 
D)  money market mutual funds.

Question 3

Investment banks specialize in information regarding

Accepted Answer

A)  commodities. 
B)  certificates of deposit. 
C)  demand deposits. 
D)  primary securities. 
A)  commodities. 
B)  certificates of deposit. 
C)  demand deposits. 
D)  primary securities.

Question 4

That segment of the market for securities which have original maturities of more than one year is called the

Accepted Answer

A)  stock market. 
B)  derivative securities market. 
C)  money market. 
D)  capital market. 
A)  stock market. 
B)  derivative securities market. 
C)  money market. 
D)  capital market.

Question 5

The most prominent secondary financial market is

Accepted Answer

A)  the New York Stock Exchange. 
B)  the American Stock Exchange. 
C)  the Nasdaq. 
D)  the over-the-counter market. 
A)  the New York Stock Exchange. 
B)  the American Stock Exchange. 
C)  the Nasdaq. 
D)  the over-the-counter market.

Question 6

An example of a financial instrument in the capital market is

Accepted Answer

A)  commercial paper. 
B)  a corporate bond. 
C)  a negotiable bank CD. 
D)  a U.S. Treasury bill. 
A)  commercial paper. 
B)  a corporate bond. 
C)  a negotiable bank CD. 
D)  a U.S. Treasury bill.

Question 7

Most borrower-spenders in the financial system are

Accepted Answer

A)  businesses and governments. 
B)  banks and thrift institutions. 
C)  households and foreigners. 
D)  governments and financial institutions. 
A)  businesses and governments. 
B)  banks and thrift institutions. 
C)  households and foreigners. 
D)  governments and financial institutions.

Question 8

Which of the following is a primary market transaction?

Accepted Answer

A)  Sally Wither purchases 100 shares of IBM through her broker. 
B)  Kold Co. issues 1 million new shares through Morgan Stanley. 
C)  Bob Hill sells 1,000 shares of Disney directly to his friend. 
D)  Kip Peters sells 1,000 shares of Dush, Inc., which he bought in an IPO last month, through his broker. 
A)  Sally Wither purchases 100 shares of IBM through her broker. 
B)  Kold Co. issues 1 million new shares through Morgan Stanley. 
C)  Bob Hill sells 1,000 shares of Disney directly to his friend. 
D)  Kip Peters sells 1,000 shares of Dush, Inc., which he bought in an IPO last month, through his broker.

Question 9

Mutual funds usually do not invest in

Accepted Answer

A)  the stock market. 
B)  the municipal bond market. 
C)  the residential mortgage market. 
D)  Mutual funds invest in all of the above. 
A)  the stock market. 
B)  the municipal bond market. 
C)  the residential mortgage market. 
D)  Mutual funds invest in all of the above.

Question 10

Peter Lemmings purchased a call option on XYZ Stock with a strike price of $50.

Accepted Answer

A)  Peter will exercise the option if the price of XYZ Stock at expiration is $30. 
B)  Peter will exercise the option if the price of XYZ Stock at expiration is above $50. 
C)  Peter will let the option expire if the price of XYZ Stock at expiration is $60. 
D)  Peter will buy a put option to close out his position if the price of XYZ Stock at expiration is above $60. 
A)  Peter will exercise the option if the price of XYZ Stock at expiration is $30. 
B)  Peter will exercise the option if the price of XYZ Stock at expiration is above $50. 
C)  Peter will let the option expire if the price of XYZ Stock at expiration is $60. 
D)  Peter will buy a put option to close out his position if the price of XYZ Stock at expiration is above $60.

Question 11

A wide variety of purchasers buy securities issued by all of the following government agencies except

Accepted Answer

A)  Federal Home Loan Banks and Federal Land Banks. 
B)  the Federal National Mortgage Association. 
C)  the U.S. Treasury. 
D)  the Federal Reserve. 
A)  Federal Home Loan Banks and Federal Land Banks. 
B)  the Federal National Mortgage Association. 
C)  the U.S. Treasury. 
D)  the Federal Reserve.

Which of the following is not a financial intermediary?

Commercial paper is mostly held by

Investment banks specialize in information regarding

That segment of the market for securities which have original maturities of more than one year is called the

The most prominent secondary financial market is

An example of a financial instrument in the capital market is

Most borrower-spenders in the financial system are

Which of the following is a primary market transaction?

Mutual funds usually do not invest in

Peter Lemmings purchased a call option on XYZ Stock with a strike price of $50.

A wide variety of purchasers buy securities issued by all of the following government agencies except

Introducing Money, Banking, and Financial Markets

The Role of Money in the Macroeconomy

Interest Rate Measurement and Behavior

The Term and Risk Structure of Interest Rates

The Structure and Performance of Securities Markets

The Pricing of Risky Financial Assets

Money and Capital Markets

Demystifying Derivatives

Understanding Foreign Exchange

The Nature of Financial Intermediation

Depository Financial Institutions

Nondepository Financial Institutions

Understanding Financial Contracts

The Regulation of Markets and Institutions

Financial System Design

Who's in Charge Here?

Bank Reserves and the Money Supply

The Instruments of Central Bankin

Understanding Movements in Bank Reserves

Monetary Policy Strategy

The Classical Foundations

The Keynesian Framework

The ISLM World

Money and Economic Stability in the ISLM World

An Aggregate Supply and Demand Perspective on Money and Economic Stability

Rational Expectations: Theory and Policy Implications

Empirical Evidence on the Effectiveness of Monetary Policy

Tying It All Together

Filters

Exam 3: Financial Instruments, Markets, and Institutions

Which of the following is not a financial intermediary?

Commercial paper is mostly held by

Investment banks specialize in information regarding

That segment of the market for securities which have original maturities of more than one year is called the

The most prominent secondary financial market is

An example of a financial instrument in the capital market is

Most borrower-spenders in the financial system are

Which of the following is a primary market transaction?

Mutual funds usually do not invest in

Peter Lemmings purchased a call option on XYZ Stock with a strike price of $50.

A wide variety of purchasers buy securities issued by all of the following government agencies except

Introducing Money, Banking, and Financial Markets

The Role of Money in the Macroeconomy

Interest Rate Measurement and Behavior

The Term and Risk Structure of Interest Rates

The Structure and Performance of Securities Markets

The Pricing of Risky Financial Assets

Money and Capital Markets

Demystifying Derivatives

Understanding Foreign Exchange

The Nature of Financial Intermediation

Depository Financial Institutions

Nondepository Financial Institutions

Understanding Financial Contracts

The Regulation of Markets and Institutions

Financial System Design

Who's in Charge Here?

Bank Reserves and the Money Supply

The Instruments of Central Bankin

Understanding Movements in Bank Reserves

Monetary Policy Strategy

The Classical Foundations

The Keynesian Framework

The ISLM World

Money and Economic Stability in the ISLM World

An Aggregate Supply and Demand Perspective on Money and Economic Stability

Rational Expectations: Theory and Policy Implications

Empirical Evidence on the Effectiveness of Monetary Policy

Tying It All Together

Filters