Question 1

Financial functions in the U.S.financial system include:

Accepted Answer

A) transferring financial assets 
B) creating money 
C) accumulating savings 
D) all of the above 
A) transferring financial assets 
B) creating money 
C) accumulating savings 
D) all of the above

Question 2

Crucial elements of the financial environment and well-developed financial system include:

Accepted Answer

A) financial institutions 
B) financial markets 
C) investments and financial management 
D) all of the above 
A) financial institutions 
B) financial markets 
C) investments and financial management 
D) all of the above

Question 3

All of the following are true regarding mortgage backed securities except:

Accepted Answer

A) A mortgage-backed security is a debt security created by pooling together a group of mortgage loans whose periodic payments belong to the holders of the security. 
B) Some mortgage-backed securities "pass through" the interest and principal payments to the owners of the securities. 
C) Payments on the underlying mortgages are made to the financial institution that created the mortgage-backed security, and the institution, in turn, pays or passes through the payments to the investors or owners of the securities. 
D) In some mortgage-backed securities, the issuer separates or "strips" the interest and principal payment streams into separate securities. 
E) all of the above statements are true 
A) A mortgage-backed security is a debt security created by pooling together a group of mortgage loans whose periodic payments belong to the holders of the security. 
B) Some mortgage-backed securities "pass through" the interest and principal payments to the owners of the securities. 
C) Payments on the underlying mortgages are made to the financial institution that created the mortgage-backed security, and the institution, in turn, pays or passes through the payments to the investors or owners of the securities. 
D) In some mortgage-backed securities, the issuer separates or "strips" the interest and principal payment streams into separate securities. 
E) all of the above statements are true

Question 4

Functions of the monetary system include all of the following except

Accepted Answer

A) creating money 
B) transferring money 
C) accumulating savings 
D) Lending and investing savings 
E) all of the above are included as functions of a monetary system 
A) creating money 
B) transferring money 
C) accumulating savings 
D) Lending and investing savings 
E) all of the above are included as functions of a monetary system

Question 5

Basic requirements of an effective financial system include:

Accepted Answer

A) creating money 
B) transferring money 
C) accumulating savings 
D) all of the above 
E) none of the above 
A) creating money 
B) transferring money 
C) accumulating savings 
D) all of the above 
E) none of the above

Question 6

The principle of finance that "reputation matters" implies that for institutions or businesses to be successful, they must have the trust and confidence of their customers, employees, and owners, as well as the community and society within which they operate.

Accepted Answer

A) True 
 B)False

Question 7

If the interest rate is equal to 0%, then a dollar today is worth

Accepted Answer

A) more than a dollar tomorrow 
B) the same as a dollar tomorrow 
C) less than a dollar tomorrow 
D) there is not sufficient information to tell 
A) more than a dollar tomorrow 
B) the same as a dollar tomorrow 
C) less than a dollar tomorrow 
D) there is not sufficient information to tell

Question 8

Programs passed by the federal government in response to the financial crisis of 2007-2009 include all of the following except:

Accepted Answer

A) Economic Stabilization Act 
B) Troubled Asset Relief Program 
C) American Recovery and Reinvestment Act 
D) only a and b were passed 
E) a, b, and c were all passed 
A) Economic Stabilization Act 
B) Troubled Asset Relief Program 
C) American Recovery and Reinvestment Act 
D) only a and b were passed 
E) a, b, and c were all passed

Question 9

$1,000 invested today at 6% interest would be worth ________ one year from now

Accepted Answer

A) $1,600 
B) $1,060 
C) $1,160 
D) $1,006 
E) none of the above 
A) $1,600 
B) $1,060 
C) $1,160 
D) $1,006 
E) none of the above

Question 10

Checks:

Accepted Answer

A) are orders to depository institutions to transfer money to the party who received the check 
B) may be safely sent in the mail 
C) provide a record of payment 
D) all of the above 
E) none of the above 
A) are orders to depository institutions to transfer money to the party who received the check 
B) may be safely sent in the mail 
C) provide a record of payment 
D) all of the above 
E) none of the above

Question 11

The principle of finance that "lower returns are expected for taking on less risk" implies that rational investors would choose a risky investment only if they feel the expected return is high enough to justify the greater risk.

Accepted Answer

A) True 
 B)False

Question 12

The primary securities markets are

Accepted Answer

A) the markets for previously issued securities such as the New York Stock Exchange 
B) the markets where financial assets such as stocks and bonds are initially issued 
C) the three most important financial markets in any economy 
D) the markets for stocks and bonds only 
A) the markets for previously issued securities such as the New York Stock Exchange 
B) the markets where financial assets such as stocks and bonds are initially issued 
C) the three most important financial markets in any economy 
D) the markets for stocks and bonds only

Question 13

Business finance is the study of financial planning, asset management and fund raising by businesses and financial institutions.

Accepted Answer

A) True 
 B)False

Question 14

An area of finance that involves the study of government institutions and their involvement in rescuing private firms is called:

Accepted Answer

A) financial management 
B) investments 
C) financial institutions 
D) financial markets 
E) none of the above 
A) financial management 
B) investments 
C) financial institutions 
D) financial markets 
E) none of the above

Question 15

The financial crisis of 2007-2009 resulted from a number of negative economic and financial trends including:

Accepted Answer

A) a decline in housing prices 
B) a decline in stock prices 
C) mortgage defaults 
D) high debt levels 
E) all of the above 
A) a decline in housing prices 
B) a decline in stock prices 
C) mortgage defaults 
D) high debt levels 
E) all of the above

Question 16

The six principles of finance include all of the following except:

Accepted Answer

A) Money has a time value. 
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 in the six principles. 
A) Money has a time value. 
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 in the six principles.

Question 17

The lax oversight by government regulatory agencies and private debt rating agencies helped contribute to the severity of the 2007-2009 financial crisis.

Accepted Answer

A) True 
 B)False

Question 18

A prime mortgage is a home loan to a borrower with a credit score above 300.

Accepted Answer

A) True 
 B)False

Question 19

Creditworthiness reflects:

Accepted Answer

A) an individual borrower's capacity to pay 
B) collateral or security to the lender, 
C) character 
D) a, b, and c above. 
E) neither a, b, nor c above 
A) an individual borrower's capacity to pay 
B) collateral or security to the lender, 
C) character 
D) a, b, and c above. 
E) neither a, b, nor c above

Question 20

____________________ provide the record-keeping mechanism for showing ownership of the financial instruments used in the flow of financial funds between savers and borrowers and record revenues, expenses, and profitability of organizations that produce and exchange goods and services.

Accepted Answer

A) Financial Managers 
B) Accountants 
C) Operations Managers 
D) Statisticians 
E) none of the above 
A) Financial Managers 
B) Accountants 
C) Operations Managers 
D) Statisticians 
E) none of the above

Financial functions in the U.S.financial system include:

Crucial elements of the financial environment and well-developed financial system include:

All of the following are true regarding mortgage backed securities except:

Functions of the monetary system include all of the following except

Basic requirements of an effective financial system include:

The principle of finance that "reputation matters" implies that for institutions or businesses to be successful, they must have the trust and confidence of their customers, employees, and owners, as well as the community and society within which they operate.

If the interest rate is equal to 0%, then a dollar today is worth

Programs passed by the federal government in response to the financial crisis of 2007-2009 include all of the following except:

$1,000 invested today at 6% interest would be worth ________ one year from now

Checks:

The principle of finance that "lower returns are expected for taking on less risk" implies that rational investors would choose a risky investment only if they feel the expected return is high enough to justify the greater risk.

The primary securities markets are

Business finance is the study of financial planning, asset management and fund raising by businesses and financial institutions.

An area of finance that involves the study of government institutions and their involvement in rescuing private firms is called:

The financial crisis of 2007-2009 resulted from a number of negative economic and financial trends including:

The six principles of finance include all of the following except:

The lax oversight by government regulatory agencies and private debt rating agencies helped contribute to the severity of the 2007-2009 financial crisis.

A prime mortgage is a home loan to a borrower with a credit score above 300.

Creditworthiness reflects:

____________________ provide the record-keeping mechanism for showing ownership of the financial instruments used in the flow of financial funds between savers and borrowers and record revenues, expenses, and profitability of organizations that produce and exchange goods and services.

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

Financial functions in the U.S.financial system include:

Crucial elements of the financial environment and well-developed financial system include:

All of the following are true regarding mortgage backed securities except:

Functions of the monetary system include all of the following except

Basic requirements of an effective financial system include:

The principle of finance that "reputation matters" implies that for institutions or businesses to be successful, they must have the trust and confidence of their customers, employees, and owners, as well as the community and society within which they operate.

If the interest rate is equal to 0%, then a dollar today is worth

Programs passed by the federal government in response to the financial crisis of 2007-2009 include all of the following except:

$1,000 invested today at 6% interest would be worth ________ one year from now

Checks:

The principle of finance that "lower returns are expected for taking on less risk" implies that rational investors would choose a risky investment only if they feel the expected return is high enough to justify the greater risk.

The primary securities markets are

Business finance is the study of financial planning, asset management and fund raising by businesses and financial institutions.

An area of finance that involves the study of government institutions and their involvement in rescuing private firms is called:

The financial crisis of 2007-2009 resulted from a number of negative economic and financial trends including:

The six principles of finance include all of the following except:

The lax oversight by government regulatory agencies and private debt rating agencies helped contribute to the severity of the 2007-2009 financial crisis.

A prime mortgage is a home loan to a borrower with a credit score above 300.

Creditworthiness reflects:

____________________ provide the record-keeping mechanism for showing ownership of the financial instruments used in the flow of financial funds between savers and borrowers and record revenues, expenses, and profitability of organizations that produce and exchange goods and services.

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