Exam 3: Financial Indices, Market Information, and Economic Data

In the Flow of Funds Accounts if total uses of funds equals total sources of funds then:

Yields and prices on individual bond issues may be found in all of the following published sources but one. Which one does not contain such information?

In the Flow of Funds Accounts, economic units (transactors) with similar balance sheets are divided into several broad groups called sectors.

The combined net worth of US households is approximately $56 trillion.

In 2008, of the $14.4 trillion gross domestic product of the United States, approximately

Dealers in bonds and notes usually compute and quote yields to their customers based on their bid prices.

The total liabilities of US households is approximately $54 trillion.

Households held $1.5 trillion in common stock at year-end 19X1. Assuming stock prices doubled during 19X2 and no additional household purchases of stock were made during that year, household savings would rise by at least $1.5 trillion during 19X2.

Security dealers purchase securities at the asked price and sell at the bid price.

Data from the Flow of Funds Accounts are reported in the:

The Sarbanes Oxley Accounting Practices Act (SARBOX) makes them responsible when their firm dispenses inaccurate financial information:

When information asymmetries exist:

As a student, you live from paycheck to paycheck. In deciding where to open a checking account, you look for the bank which requires a low minimum balance even though it might charge higher per check fees. This is an example of:

Information asymmetries can be eliminated by government regulation of markets.

Suppose the business sector in the Flow of Funds Accounts issues $80 billion in new stock early in the year and then retires $50 billion in outstanding stock later, followed by selling another $40 billion in new stock just before year-end. The business sector would record what volume of new stock issues in the Flow of Funds Accounts?

The discovery of a financial asset whose expected return is above or below the security market line (SML) would be a signal of:

Periodic reports by security dealers showing market prices, yields and amounts held of various securities are known as:

GNP or GDP is a component of the Flow of Funds Accounts.

According to the related concept of a random walk, successive changes in asset prices often appear as unpredictable as a sequence of random numbers, so that smaller less well-informed investors, should on average:

The Flow of Funds Accounts subdivide foreign suppliers and demanders of credit active in the U.S. financial markets into geographic regions; these include a Western European sector, an Eastern bloc sector and an Asian sector.