Question 1

Reasons we study finance include all of the following except:

Accepted Answer

A) To make informed economic decisions 
B) To make informed personal and business investment decisions 
C) To make informed career decisions based on a basic understanding of business finance 
D) To make informed medical decisions 
E) all of the above about reasons to study finance. 
A) To make informed economic decisions 
B) To make informed personal and business investment decisions 
C) To make informed career decisions based on a basic understanding of business finance 
D) To make informed medical decisions 
E) all of the above about reasons to study finance.

Question 2

Financial markets provide the mechanism for allocating financial resources or funds from savers to borrowers

Accepted Answer

A) True 
 B)False

Question 3

Because of the financial crisis that began in 2008, by the end of 2009:

Accepted Answer

A) unemployment was in excess of 10 percent 
B) many homeowners owed more money on their mortgage loans than the their homes were worth 
C) home mortgage foreclosure rates and personal and business bankruptcies were increasing 
D) over 100 banks in the U.S.had already failed with over 500 more being considered financially weak 
E) all of the above are true 
A) unemployment was in excess of 10 percent 
B) many homeowners owed more money on their mortgage loans than the their homes were worth 
C) home mortgage foreclosure rates and personal and business bankruptcies were increasing 
D) over 100 banks in the U.S.had already failed with over 500 more being considered financially weak 
E) all of the above are true

Question 4

Money markets are where debt securities with maturities of one year or more are issued and traded.

Accepted Answer

A) True 
 B)False

Question 5

Money markets are the markets where generally short-term assets are traded.

Accepted Answer

A) True 
 B)False

Question 6

An economy's _____________________ is the interaction of policy makers, a monetary system, financial institutions, and financial markets to expedite the flow of financial capital from savings into investment:

Accepted Answer

A) banking system 
B) stock market 
C) capital market 
D) financial system 
A) banking system 
B) stock market 
C) capital market 
D) financial system

Question 7

In the United States, most money is created by:

Accepted Answer

A) depository institutions 
B) the United States Treasury 
C) capital markets 
D) None of the above 
A) depository institutions 
B) the United States Treasury 
C) capital markets 
D) None of the above

Question 8

Economists use a ___________________ framework to explain how the prices and quantities of goods and services are determined in a free-market economic system.

Accepted Answer

A) opportunity 
B) marginal cost 
C) supply-and-demand 
D) anti-monopoly 
E) none of the above 
A) opportunity 
B) marginal cost 
C) supply-and-demand 
D) anti-monopoly 
E) none of the above

Question 9

Financial markets encourage investment by:

Accepted Answer

A) providing capital at lower rates than provided by banks 
B) providing electronic execution of transactions which are faster and cheaper than other methods 
C) providing the means for savers to easily and quickly convert financial assets into cash when needed 
D) none of the above 
A) providing capital at lower rates than provided by banks 
B) providing electronic execution of transactions which are faster and cheaper than other methods 
C) providing the means for savers to easily and quickly convert financial assets into cash when needed 
D) none of the above

Question 10

_________________________________________ are crucial elements of the financial environment and well-developed financial systems.

Accepted Answer

A) Businesses and the federal government 
B) International organizations such as the World Bank and International Monetary Fund 
C) Well-developed barter systems 
D) Financial institutions, financial markets, and investment and financial management 
A) Businesses and the federal government 
B) International organizations such as the World Bank and International Monetary Fund 
C) Well-developed barter systems 
D) Financial institutions, financial markets, and investment and financial management

Question 11

Personal finance is the study of how individuals prepare for financial emergencies, protect against premature death and property losses, and accumulate wealth.

Accepted Answer

A) True 
 B)False

Question 12

Finance has its origins in:

Accepted Answer

A) economics and statistics 
B) accounting and sociology 
C) accounting and economics 
D) psychology and mathematics 
A) economics and statistics 
B) accounting and sociology 
C) accounting and economics 
D) psychology and mathematics

Question 13

Among the six principles of finance, all are included except:

Accepted Answer

A) All decisions are ultimately financial decisions. 
B) Higher returns are expected for taking on more risk 
C) Diversification of investments can reduce risk 
D) Financial markets are efficient in pricing securities 
E) all of the above are included 
A) All decisions are ultimately financial decisions. 
B) Higher returns are expected for taking on more risk 
C) Diversification of investments can reduce risk 
D) Financial markets are efficient in pricing securities 
E) all of the above are included

Question 14

The value of money results from:

Accepted Answer

A) 	its backing 
B) 	rates set by the Federal Reserve 
C) 	its purchasing power 
D) 	none of the above 
A) 	its backing 
B) 	rates set by the Federal Reserve 
C) 	its purchasing power 
D) 	none of the above

Question 15

________________ facilitate the transfer of financial assets among individuals, institutions, businesses, and governments.

Accepted Answer

A) Financial markets 
B) Government institutions 
C) Regulatory authorities 
D) none of the above 
A) Financial markets 
B) Government institutions 
C) Regulatory authorities 
D) none of the above

Question 16

______________ behavior refers to how an individual or organization treats others legally, fairly, and honestly.

Accepted Answer

A) Principal-agent 
B) Stakeholder 
C) Responsible 
D) Ethical 
E) none of the above 
A) Principal-agent 
B) Stakeholder 
C) Responsible 
D) Ethical 
E) none of the above

Question 17

Credit ratings are prepared by government organizations on individuals, financial institutions, business firms, and government entities.

Accepted Answer

A) True 
 B)False

Question 18

Finance is the study of how individuals, institutions, and businesses acquire, spend and manage money and other financial resources.

Accepted Answer

A) True 
 B)False

Question 19

The list of financial institutions that either failed or were merged with other firms or bailed out by the federal government during financial crisis of 2007-2009 include all of the following except:

Accepted Answer

A) Lehman Brothers 
B) American International Group 
C) Merrill Lynch 
D) Washington Mutual 
E) All of the above firms failed, merged or were bailed out 
A) Lehman Brothers 
B) American International Group 
C) Merrill Lynch 
D) Washington Mutual 
E) All of the above firms failed, merged or were bailed out

Question 20

___________________ are intermediaries, such as banks, insurance companies, and investment companies that engage in financial activities to aid the flow of funds from savers to borrowers or investors.

Accepted Answer

A) Financial Institutions 
B) Financial market organizations 
C) Federal agencies 
D) International financial organizations 
E) none of the above 
A) Financial Institutions 
B) Financial market organizations 
C) Federal agencies 
D) International financial organizations 
E) none of the above

Reasons we study finance include all of the following except:

Financial markets provide the mechanism for allocating financial resources or funds from savers to borrowers

Because of the financial crisis that began in 2008, by the end of 2009:

Money markets are where debt securities with maturities of one year or more are issued and traded.

Money markets are the markets where generally short-term assets are traded.

An economy's _____________________ is the interaction of policy makers, a monetary system, financial institutions, and financial markets to expedite the flow of financial capital from savings into investment:

In the United States, most money is created by:

Economists use a ___________________ framework to explain how the prices and quantities of goods and services are determined in a free-market economic system.

Financial markets encourage investment by:

_________________________________________ are crucial elements of the financial environment and well-developed financial systems.

Personal finance is the study of how individuals prepare for financial emergencies, protect against premature death and property losses, and accumulate wealth.

Finance has its origins in:

Among the six principles of finance, all are included except:

The value of money results from:

________________ facilitate the transfer of financial assets among individuals, institutions, businesses, and governments.

______________ behavior refers to how an individual or organization treats others legally, fairly, and honestly.

Credit ratings are prepared by government organizations on individuals, financial institutions, business firms, and government entities.

Finance is the study of how individuals, institutions, and businesses acquire, spend and manage money and other financial resources.

The list of financial institutions that either failed or were merged with other firms or bailed out by the federal government during financial crisis of 2007-2009 include all of the following except:

___________________ are intermediaries, such as banks, insurance companies, and investment companies that engage in financial activities to aid the flow of funds from savers to borrowers or investors.

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

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 1: The Financial Environment

Reasons we study finance include all of the following except:

Financial markets provide the mechanism for allocating financial resources or funds from savers to borrowers

Because of the financial crisis that began in 2008, by the end of 2009:

Money markets are where debt securities with maturities of one year or more are issued and traded.

Money markets are the markets where generally short-term assets are traded.

An economy's _____________________ is the interaction of policy makers, a monetary system, financial institutions, and financial markets to expedite the flow of financial capital from savings into investment:

In the United States, most money is created by:

Economists use a ___________________ framework to explain how the prices and quantities of goods and services are determined in a free-market economic system.

Financial markets encourage investment by:

_________________________________________ are crucial elements of the financial environment and well-developed financial systems.

Personal finance is the study of how individuals prepare for financial emergencies, protect against premature death and property losses, and accumulate wealth.

Finance has its origins in:

Among the six principles of finance, all are included except:

The value of money results from:

________________ facilitate the transfer of financial assets among individuals, institutions, businesses, and governments.

______________ behavior refers to how an individual or organization treats others legally, fairly, and honestly.

Credit ratings are prepared by government organizations on individuals, financial institutions, business firms, and government entities.

Finance is the study of how individuals, institutions, and businesses acquire, spend and manage money and other financial resources.

The list of financial institutions that either failed or were merged with other firms or bailed out by the federal government during financial crisis of 2007-2009 include all of the following except:

___________________ are intermediaries, such as banks, insurance companies, and investment companies that engage in financial activities to aid the flow of funds from savers to borrowers or investors.

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

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