Question 1

Which one the following four basic economic units consistently represents a savings surplus unit?

Accepted Answer

A) individuals 
B) business firms 
C) financial intermediaries 
D) governments 
A) individuals 
B) business firms 
C) financial intermediaries 
D) governments

Question 2

Foreign capital did not play a significant role in the development of the United States.

Accepted Answer

A) True 
 B)False

Question 3

Capital market securities include all of the following EXCEPT:

Accepted Answer

A) Corporate bond 
B) Treasury bond 
C) Certificate of deposit 
D) Common Stock 
E) Municipal bond 
A) Corporate bond 
B) Treasury bond 
C) Certificate of deposit 
D) Common Stock 
E) Municipal bond

Question 4

Which of the following statements is most correct?

Accepted Answer

A) Corporate after-tax profits rose from $473.8 billion in 2006 to $616.2 billion in 2008.This rise coincided with the 2007-09 financial crisis. 
B) Corporate after-tax profits remained about the same at $500 million between 2006 and 2008. 
C) Corporate after-tax profits declined from $616.2 million in 2006 to $473.8 million in 2008.This decline coincided with the 2007-09 financial crisis. 
D) Corporate after-tax profits rose from $473.8 million in 2006 to $616.2 million in 2008.This rise coincided with the 2007-09 financial crisis. 
E) none of the above. 
A) Corporate after-tax profits rose from $473.8 billion in 2006 to $616.2 billion in 2008.This rise coincided with the 2007-09 financial crisis. 
B) Corporate after-tax profits remained about the same at $500 million between 2006 and 2008. 
C) Corporate after-tax profits declined from $616.2 million in 2006 to $473.8 million in 2008.This decline coincided with the 2007-09 financial crisis. 
D) Corporate after-tax profits rose from $473.8 million in 2006 to $616.2 million in 2008.This rise coincided with the 2007-09 financial crisis. 
E) none of the above.

Question 5

The primary factors that influence the amount of savings in any given period include all of the following EXCEPT:

Accepted Answer

A) levels of income 
B) economic expectations 
C) cyclical influences 
D) all of the above are factors that influence savings 
A) levels of income 
B) economic expectations 
C) cyclical influences 
D) all of the above are factors that influence savings

Question 6

Direct financing involves the use of securities that represent specific contracts between savers and borrowers.

Accepted Answer

A) True 
 B)False

Question 7

If an individual supplies funds to a business firm by purchasing bonds issued by the firm, the transaction:

Accepted Answer

A) creates two types of financial assets and two types of financial liabilities 
B) increases the liquidity and safety of principal for the individual 
C) initially occurs in the primary market 
D) limits the ability of the security to be sold in the secondary market 
E) all of the above 
A) creates two types of financial assets and two types of financial liabilities 
B) increases the liquidity and safety of principal for the individual 
C) initially occurs in the primary market 
D) limits the ability of the security to be sold in the secondary market 
E) all of the above

Question 8

17 21.The federal debt of the United States is owned to a large extent by foreign institutions and individuals.

Accepted Answer

A) True 
 B)False

Question 9

Gross Private Domestic Investment (GPDI) measures fixed investment in:

Accepted Answer

A) residential and non-residential structures 
B) individual expenditures for nondurable goods 
C) individual expenditures for services 
D) none of the above 
A) residential and non-residential structures 
B) individual expenditures for nondurable goods 
C) individual expenditures for services 
D) none of the above

Question 10

Which of the following statements is most correct?

Accepted Answer

A) Corporate after-tax profits rose from $473.8 billion in 2006 to $616.2 billion in 2008.This rise coincided with the 2007-09 financial crisis. 
B) Corporate after-tax profits remained about the same at $500 million between 2006 and 2008. 
C) Corporate after-tax profits declined from $616.2 billion in 2006 to $473.8 billion in 2008.This decline coincided with the 2007-09 financial crisis. 
D) Corporate after-tax profits rose from $473.8 million in 2006 to $616.2 million in 2008.This rise coincided with the 2007-09 financial crisis. 
E) none of the above. 
A) Corporate after-tax profits rose from $473.8 billion in 2006 to $616.2 billion in 2008.This rise coincided with the 2007-09 financial crisis. 
B) Corporate after-tax profits remained about the same at $500 million between 2006 and 2008. 
C) Corporate after-tax profits declined from $616.2 billion in 2006 to $473.8 billion in 2008.This decline coincided with the 2007-09 financial crisis. 
D) Corporate after-tax profits rose from $473.8 million in 2006 to $616.2 million in 2008.This rise coincided with the 2007-09 financial crisis. 
E) none of the above.

Question 11

Which of the following statements is most correct?

Accepted Answer

A) Contractual savings include such things as accumulation of reserves in insurance and pension funds and deposits to time and savings accounts in commercial banks. 
B) As savings increased in the United States, there was a change in our status from a creditor nation to a debtor nation. 
C) In the U.S.economy, recessions can be avoided with the appropriate fiscal policy. 
D) Corporate bonds and stocks are said to be indirect securities, while commercial bank time deposits would represent primary instruments in terms of the savings investment process. 
E) none of the above 
A) Contractual savings include such things as accumulation of reserves in insurance and pension funds and deposits to time and savings accounts in commercial banks. 
B) As savings increased in the United States, there was a change in our status from a creditor nation to a debtor nation. 
C) In the U.S.economy, recessions can be avoided with the appropriate fiscal policy. 
D) Corporate bonds and stocks are said to be indirect securities, while commercial bank time deposits would represent primary instruments in terms of the savings investment process. 
E) none of the above

Question 12

The process of balancing savings surplus and savings deficit units by channeling savings into investment through a financial intermediary does not result in the:

Accepted Answer

A) individuals receiving safety of principal, liquidity, and a return on their savings 
B) business firm anticipating earning a return on its investment in real assets that is lower than the interest cost on the institution loan 
C) intermediary being compensated for facilitating the savings and investment process 
D) creation of two types of financial assets and two types of financial liabilities 
A) individuals receiving safety of principal, liquidity, and a return on their savings 
B) business firm anticipating earning a return on its investment in real assets that is lower than the interest cost on the institution loan 
C) intermediary being compensated for facilitating the savings and investment process 
D) creation of two types of financial assets and two types of financial liabilities

Question 13

Which one of the following instruments is the least important in terms of funds raised in the credit markets?

Accepted Answer

A) U.S.government securities 
B) tax-exempt obligations 
C) corporate bonds 
D) mortgages 
A) U.S.government securities 
B) tax-exempt obligations 
C) corporate bonds 
D) mortgages

Question 14

Which of the following usually does not influence personal choice of savings medium?

Accepted Answer

A) Liquidity 
B) Degree of Safety 
C) Return 
D) Income 
E) Long-term foreseeable needs 
A) Liquidity 
B) Degree of Safety 
C) Return 
D) Income 
E) Long-term foreseeable needs

Question 15

Which of the following factors usually influence a person's choice of savings medium?

Accepted Answer

A) liquidity 
B) degree of safety 
C) return 
D) all of the above 
A) liquidity 
B) degree of safety 
C) return 
D) all of the above

Question 16

During the early years of the life stage of a typical corporation, the:

Accepted Answer

A) volume of physical assets increases slowly 
B) firm is unable to establish a strong position with respect to its financial assets 
C) corporation is a heavy provider of financial assets 
D) need for borrowed capital is small 
A) volume of physical assets increases slowly 
B) firm is unable to establish a strong position with respect to its financial assets 
C) corporation is a heavy provider of financial assets 
D) need for borrowed capital is small

Question 17

Motivations for individuals to deposit money into a savings account include: OK….but savings accounts are in the section "How This Chapter Applies to Me" not in the body of the chapter.

Accepted Answer

A) safety of principal 
B) return on investment 
C) liquidity 
D) all the above 
E) none of the above 
A) safety of principal 
B) return on investment 
C) liquidity 
D) all the above 
E) none of the above

Question 18

Financing created by an intermediary that involves separate instruments with lenders and borrowers is called:

Accepted Answer

A) direct financing 
B) indirect financing 
C) secondary financing 
D) none of the above 
A) direct financing 
B) indirect financing 
C) secondary financing 
D) none of the above

Question 19

Which of the following statements is most correct?

Accepted Answer

A) Personal consumption expenditures of $10.1 trillion in 2009 accounted for about 71 percent of GDP; this percentage relationship has been very stable throughout the decade of the 2000s. 
B) Personal consumption expenditures of $1.1 trillion in 2009 accounted for about 11 percent of GDP; this percentage relationship has been very stable throughout the decade of the 2000s. 
C) Personal consumption expenditures of $10.1 trillion in 2009 accounted for about 11 percent of GDP; this percentage relationship has been very unstable throughout the decade of the 2000s. 
D) Personal consumption expenditures of $1.1 trillion in 2009 accounted for about 71 percent of GDP; this percentage relationship has been very unstable throughout the decade of the 2000s. 
E) none of the above. 
A) Personal consumption expenditures of $10.1 trillion in 2009 accounted for about 71 percent of GDP; this percentage relationship has been very stable throughout the decade of the 2000s. 
B) Personal consumption expenditures of $1.1 trillion in 2009 accounted for about 11 percent of GDP; this percentage relationship has been very stable throughout the decade of the 2000s. 
C) Personal consumption expenditures of $10.1 trillion in 2009 accounted for about 11 percent of GDP; this percentage relationship has been very unstable throughout the decade of the 2000s. 
D) Personal consumption expenditures of $1.1 trillion in 2009 accounted for about 71 percent of GDP; this percentage relationship has been very unstable throughout the decade of the 2000s. 
E) none of the above.

Question 20

Which of the following would not be holders of financial assets?

Accepted Answer

A) state governments 
B) U.S.government 
C) local governments 
D) all might hold financial assets 
E) none of the above hold financial assets 
A) state governments 
B) U.S.government 
C) local governments 
D) all might hold financial assets 
E) none of the above hold financial assets

Which one the following four basic economic units consistently represents a savings surplus unit?

Foreign capital did not play a significant role in the development of the United States.

Capital market securities include all of the following EXCEPT:

Which of the following statements is most correct?

The primary factors that influence the amount of savings in any given period include all of the following EXCEPT:

Direct financing involves the use of securities that represent specific contracts between savers and borrowers.

If an individual supplies funds to a business firm by purchasing bonds issued by the firm, the transaction:

17 21.The federal debt of the United States is owned to a large extent by foreign institutions and individuals.

Gross Private Domestic Investment (GPDI) measures fixed investment in:

Which of the following statements is most correct?

Which of the following statements is most correct?

The process of balancing savings surplus and savings deficit units by channeling savings into investment through a financial intermediary does not result in the:

Which one of the following instruments is the least important in terms of funds raised in the credit markets?

Which of the following usually does not influence personal choice of savings medium?

Which of the following factors usually influence a person's choice of savings medium?

During the early years of the life stage of a typical corporation, the:

Motivations for individuals to deposit money into a savings account include: OK….but savings accounts are in the section "How This Chapter Applies to Me" not in the body of the chapter.

Financing created by an intermediary that involves separate instruments with lenders and borrowers is called:

Which of the following statements is most correct?

Which of the following would not be holders of financial assets?

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuation

Securities Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters

Exam 7: Savings and Investment Process

Which one the following four basic economic units consistently represents a savings surplus unit?

Foreign capital did not play a significant role in the development of the United States.

Capital market securities include all of the following EXCEPT:

Which of the following statements is most correct?

The primary factors that influence the amount of savings in any given period include all of the following EXCEPT:

Direct financing involves the use of securities that represent specific contracts between savers and borrowers.

If an individual supplies funds to a business firm by purchasing bonds issued by the firm, the transaction:

17 21.The federal debt of the United States is owned to a large extent by foreign institutions and individuals.

Gross Private Domestic Investment (GPDI) measures fixed investment in:

Which of the following statements is most correct?

Which of the following statements is most correct?

The process of balancing savings surplus and savings deficit units by channeling savings into investment through a financial intermediary does not result in the:

Which one of the following instruments is the least important in terms of funds raised in the credit markets?

Which of the following usually does not influence personal choice of savings medium?

Which of the following factors usually influence a person's choice of savings medium?

During the early years of the life stage of a typical corporation, the:

Motivations for individuals to deposit money into a savings account include: OK….but savings accounts are in the section "How This Chapter Applies to Me" not in the body of the chapter.

Financing created by an intermediary that involves separate instruments with lenders and borrowers is called:

Which of the following statements is most correct?

Which of the following would not be holders of financial assets?

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuation

Securities Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters