Question 1

Which of the following is an activity performed by the Bank of Canada as it carries out its monetary policy?

Accepted Answer

A)  insuring credit card balances 
B)  providing tax refunds 
C)  distributing currency 
D)  loaning money to consumers

Question 2

Which of the following are contracts that entitle holders to buy or sell specified quantities of common shares or other financial instruments at a set price during a specified time?

Accepted Answer

A)  options 
B)  futures contracts 
C)  debentures 
D)  mutual securities

Question 3

Blackwell Investments specializes in acting as an intermediary in taking companies public.This financial middleman is an example of which of the following roles?

Accepted Answer

A)  a stockbroker 
B)  a commercial banker 
C)  an investment banker 
D)  a transfer agent

Question 4

Michaela Petty owns common shares in Procter & Gamble.Last quarter she received a cheque from P&G for $132,which is her share of P&G's distributed profits.Petty has received which of the following?

Accepted Answer

A)  interest 
B)  a yield 
C)  dividends 
D)  a capital gain

Question 5

To stimulate the economy,the Bank of Canada can do which of the following?

Accepted Answer

A)  lower the reserve requirement 
B)  raise the prime rate 
C)  sell government bonds on the open market 
D)  buy shares listed on the Toronto Stock Exchange

Question 6

What is another name for a stockbroker?

Accepted Answer

The answer of What is another name for a stockbroker?...

Question 7

Unlike futures contracts,the price paid for options is the maximum amount that can be lost.

Accepted Answer

A) True 
 B)False

Question 8

If you know the earnings,price,and dividend of a company,it is easy to predict what the shares will do.

Accepted Answer

A) True 
 B)False

Question 9

What are the two broad groups involved in financial intermediation?

Accepted Answer

The answer of What are the two broad groups involved...

Question 10

The primary securities market is which of the following?

Accepted Answer

A)  a place to trade bonds 
B)  a market in which new securities are sold to the public 
C)  a central location where securities are traded 
D)  a location for buying and selling primary futures

Question 11

Suppose Scotiabank borrows funds from the Bank of Canada.What is the rate the Bank of Canada charges Scotiabank?

Accepted Answer

A)  the going rate 
B)  the bank rate 
C)  the prime rate 
D)  the commercial bank rate

Question 12

What are two types of equity securities?

Accepted Answer

A)  common shares and preferred shares 
B)  common shares and debentures 
C)  debentures and convertible bonds 
D)  convertible bonds and preferred shares

Question 13

Which of the following are large pools of money set aside by corporations,unions,and governments for later use in paying retirement benefits to their employees or members?

Accepted Answer

A)  pension funds 
B)  unemployment benefits 
C)  workers' compensation funds 
D)  slush funds

Question 14

Which of the following best describes a mutual fund?

Accepted Answer

A)  It does not have a stated investment goal. 
B)  It is professionally managed. 
C)  It offers lower returns than individually managed accounts. 
D)  It is not a good way to hold a diversified stock portfolio.

Question 15

Which type of bonds is an example of an unsecured bond?

Accepted Answer

A)  discount bonds 
B)  debenture bond 
C)  premium bond 
D)  indenture bond

Question 16

Consumer finance companies make loans to individuals; commercial finance companies make loans to businesses.

Accepted Answer

A) True 
 B)False

Question 17

What are money market deposit accounts and certificates of deposit officially called?

Accepted Answer

A)  investor deposits 
B)  demand deposits 
C)  time deposits 
D)  income deposits

Question 18

Under no circumstances should you use online sources for investment information.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following represent profits from the operation of the corporation that are distributed to the shareholders?

Accepted Answer

A)  dividends 
B)  contribution margins 
C)  net profits 
D)  shared earnings

Question 20

Which of the following is the process of buying securities from corporations and governments and reselling them to the public?

Accepted Answer

A)  circuit breaking 
B)  rounding up 
C)  brokering 
D)  underwriting

Exam 17: Understanding Money and the Canadian Financial System

Which of the following is an activity performed by the Bank of Canada as it carries out its monetary policy?

Which of the following are contracts that entitle holders to buy or sell specified quantities of common shares or other financial instruments at a set price during a specified time?

Blackwell Investments specializes in acting as an intermediary in taking companies public.This financial middleman is an example of which of the following roles?

Michaela Petty owns common shares in Procter & Gamble.Last quarter she received a cheque from P&G for $132,which is her share of P&G's distributed profits.Petty has received which of the following?

To stimulate the economy,the Bank of Canada can do which of the following?

What is another name for a stockbroker?

Unlike futures contracts,the price paid for options is the maximum amount that can be lost.

If you know the earnings,price,and dividend of a company,it is easy to predict what the shares will do.

What are the two broad groups involved in financial intermediation?

The primary securities market is which of the following?

Suppose Scotiabank borrows funds from the Bank of Canada.What is the rate the Bank of Canada charges Scotiabank?

What are two types of equity securities?

Which of the following are large pools of money set aside by corporations,unions,and governments for later use in paying retirement benefits to their employees or members?

Which of the following best describes a mutual fund?

Which type of bonds is an example of an unsecured bond?

Consumer finance companies make loans to individuals; commercial finance companies make loans to businesses.

What are money market deposit accounts and certificates of deposit officially called?

Under no circumstances should you use online sources for investment information.

Which of the following represent profits from the operation of the corporation that are distributed to the shareholders?

Which of the following is the process of buying securities from corporations and governments and reselling them to the public?