Question 1

Holding everything else constant, as the dollar strengthens foreigners will buy more U.S. exports.

Accepted Answer

A) True 
 B)False

Question 2

Interest rates are important to financial institutions since an interest rate increase ________ the cost of acquiring funds and ________ the income from assets.

Accepted Answer

A) decreases; decreases 
B) increases; increases 
C) decreases; increases 
D) increases; decreases 
A) decreases; decreases 
B) increases; increases 
C) decreases; increases 
D) increases; decreases

Question 3

A stock is a debt security that promises to make periodic payments for a specific period of time.

Accepted Answer

A) True 
 B)False

Question 4

The central bank of the United States is

Accepted Answer

A) Citicorp. 
B) The Fed. 
C) Bank of America. 
D) The Treasury. 
E) none of the above. 
A) Citicorp. 
B) The Fed. 
C) Bank of America. 
D) The Treasury. 
E) none of the above.

Question 5

Money is anything accepted by anyone as payment for services or goods.

Accepted Answer

A) True 
 B)False

Question 6

The price of one country's currency in terms of another's is called

Accepted Answer

A) the foreign exchange rate. 
B) the interest rate. 
C) the Dow Jones industrial average. 
D) none of the above. 
A) the foreign exchange rate. 
B) the interest rate. 
C) the Dow Jones industrial average. 
D) none of the above.

Question 7

Interest rates are determined in the bond markets.

Accepted Answer

A) True 
 B)False

Question 8

Financial markets and institutions

Accepted Answer

A) involve the movement of huge quantities of money. 
B) affect the profits of businesses. 
C) affect the types of goods and services produced in an economy. 
D) do all of the above. 
E) do only A and B of the above. 
A) involve the movement of huge quantities of money. 
B) affect the profits of businesses. 
C) affect the types of goods and services produced in an economy. 
D) do all of the above. 
E) do only A and B of the above.

Question 9

A stronger dollar benefits ________ and hurts ________

Accepted Answer

A) American businesses; American consumers. 
B) American businesses; foreign businesses. 
C) American consumers; American businesses. 
D) foreign businesses; American consumers. 
A) American businesses; American consumers. 
B) American businesses; foreign businesses. 
C) American consumers; American businesses. 
D) foreign businesses; American consumers.

Question 10

The price paid for the rental of borrowed funds (usually expressed as a percentage of the rental of $100 per year)is commonly referred to as the

Accepted Answer

A) inflation rate. 
B) exchange rate. 
C) interest rate. 
D) aggregate price level. 
A) inflation rate. 
B) exchange rate. 
C) interest rate. 
D) aggregate price level.

Question 11

How does the value of the dollar affect the competitiveness of American businesses?

Accepted Answer

The answer of How does the value of the dollar...

Question 12

Banks, savings and loan associations, mutual savings banks, and credit unions

Accepted Answer

A) are no longer important players in financial intermediation. 
B) have been providing services only to small depositors since deregulation. 
C) have been adept at innovating in response to changes in the regulatory environment. 
D) all of the above. 
E) only A and C of the above. 
A) are no longer important players in financial intermediation. 
B) have been providing services only to small depositors since deregulation. 
C) have been adept at innovating in response to changes in the regulatory environment. 
D) all of the above. 
E) only A and C of the above.

Question 13

The organization responsible for the conduct of monetary policy in the United States is the

Accepted Answer

A) Comptroller of the Currency. 
B) U)S. Treasury. 
C) Federal Reserve System. 
D) Bureau of Monetary Affairs. 
A) Comptroller of the Currency. 
B) U)S. Treasury. 
C) Federal Reserve System. 
D) Bureau of Monetary Affairs.

Question 14

Economists group commercial banks, savings and loan associations, credit unions, mutual funds, mutual savings banks, insurance companies, pension funds, and finance companies together under the heading financial intermediaries. Financial intermediaries

Accepted Answer

A) act as middlemen, borrowing funds from those who have saved and lending these funds to others. 
B) produce nothing of value and are therefore a drain on society's resources. 
C) help promote a more efficient and dynamic economy. 
D) do all of the above. 
E) do only A and C of the above. 
A) act as middlemen, borrowing funds from those who have saved and lending these funds to others. 
B) produce nothing of value and are therefore a drain on society's resources. 
C) help promote a more efficient and dynamic economy. 
D) do all of the above. 
E) do only A and C of the above.

Question 15

The largest financial intermediaries are

Accepted Answer

A) insurance companies. 
B) finance companies. 
C) banks. 
D) all of the above. 
A) insurance companies. 
B) finance companies. 
C) banks. 
D) all of the above.

Question 16

Monetary policy affects

Accepted Answer

A) interest rates. 
B) inflation. 
C) business cycles. 
D) all of the above. 
A) interest rates. 
B) inflation. 
C) business cycles. 
D) all of the above.

Question 17

________ are an example of a financial institution.

Accepted Answer

A) Banks 
B) Insurance companies 
C) Finance companies 
D) All of the above 
A) Banks 
B) Insurance companies 
C) Finance companies 
D) All of the above

Question 18

Financial institutions are among the largest employers in the country and frequently pay very high salaries.

Accepted Answer

A) True 
 B)False

Question 19

In recent years

Accepted Answer

A) interest rates have remained constant. 
B) the success of financial institutions has reached levels unprecedented since the Great Depression. 
C) stock markets have crashed. 
D) all of the above. 
A) interest rates have remained constant. 
B) the success of financial institutions has reached levels unprecedented since the Great Depression. 
C) stock markets have crashed. 
D) all of the above.

Question 20

A security

Accepted Answer

A) is a claim or price of property that is subject to ownership. 
B) promises that payments will be made periodically for a specified period of time. 
C) is the price paid for the usage of funds. 
D) is a claim on the issuer's future income. 
A) is a claim or price of property that is subject to ownership. 
B) promises that payments will be made periodically for a specified period of time. 
C) is the price paid for the usage of funds. 
D) is a claim on the issuer's future income.

Exam 1: Why Study Financial Markets and Institutions

Holding everything else constant, as the dollar strengthens foreigners will buy more U.S. exports.

Interest rates are important to financial institutions since an interest rate increase ________ the cost of acquiring funds and ________ the income from assets.

A stock is a debt security that promises to make periodic payments for a specific period of time.

The central bank of the United States is

Money is anything accepted by anyone as payment for services or goods.

The price of one country's currency in terms of another's is called

Interest rates are determined in the bond markets.

Financial markets and institutions

A stronger dollar benefits ________ and hurts ________

The price paid for the rental of borrowed funds (usually expressed as a percentage of the rental of $100 per year)is commonly referred to as the

How does the value of the dollar affect the competitiveness of American businesses?

Banks, savings and loan associations, mutual savings banks, and credit unions

The organization responsible for the conduct of monetary policy in the United States is the

Economists group commercial banks, savings and loan associations, credit unions, mutual funds, mutual savings banks, insurance companies, pension funds, and finance companies together under the heading financial intermediaries. Financial intermediaries

The largest financial intermediaries are

Monetary policy affects

________ are an example of a financial institution.

Financial institutions are among the largest employers in the country and frequently pay very high salaries.

In recent years

A security

Overview of the Financial System

What Do Interest Rates Mean and What Is Their Role in Valuation

Why Do Interest Rates Change

How Do Risk and Term Structure Affect Interest Rates

Are Financial Markets Efficient

Why Do Financial Institutions Exist

Why Do Financial Crises Occur and Why Are They so Damaging to the Economy

Central Banks and the Federal Reserve System

Conduct of Monetary Policy: Tools, Goals, Strategy, and Tactics

The Money Markets

The Bond Market

The Stock Market

The Mortgage Markets

The Foreign Exchange Market

The International Financial System

Banking and the Management of Financial Institutions

Financial Regulation

Banking Industry: Structure and Competition

The Mutual Fund Industry

Insurance Companies and Pension Funds

Investment Banks, Security Brokers and Dealers, and Venture Capital Firms

Risk Management in Financial Institutions

Hedging With Financial Derivatives

Savings Associations and Credit Unions

Finance Companies

Filters

Interest rates are important to financial institutions since an interest rate increase the cost of acquiring funds and the income from assets.

A stronger dollar benefits and hurts