金融市场与机构复习题

复习题Chapter 2Overview of the Financial System1.Financial markets have the basic function of(a) bringing together people with funds to lend and people who want to borrow funds.(b) assuring that the swings in the business cycle are less pronounced.(c) assuring that governments need never resort to printing money.(d) both (a) and (b) of the above.(e) both (b) and (c) of the above.2. Which of the following can be described as involving direct finance?(a) A corporations stock is traded in an over-the-counter market.(b) People buy shares in a mutual fund.(c) A pension fund manager buys commercial paper in the secondary market.(d) An insurance company buys shares of common stock in the over-the-counter markets.(e) None of the above.3. Which of the following can be described as involving direct finance?(a) A corporations stock is traded in an over-the-counter market.(b) A corporation buys commercial paper issued by another corporation.(c) A pension fund manager buys commercial paper from the issuing corporation.(d) Both (a) and (b) of the above.(e) Both (b) and (c) of the above.4.Intermediaries who link buyers and sellers by buying and selling securities at stated prices are called(a) investment bankers.(b) traders.(c) brokers.(d) dealers.(e) none of the above.5. An important financial institution that assists in the initial sale of securities in the primary market is the(a) investment bank.(b) commercial bank.(c) stock exchange.(d) brokerage house.6. Which of the following statements about financial markets and securities are true?(a) Most common stocks are traded over-the-counter, although the largest corporations have their shares traded at organized stock exchanges such as the New York Stock Exchange.(b) A corporation acquires new funds only when its securities are sold in the primary market.(c) Money market securities are usually more widely traded than longer-term securities and so tend to be more liquid.(d) All of the above are true.(e) Only (a) and (b) of the above are true.7. Which of the following statements about financial markets and securities are true?(a) A bond is a long-term security that promises to make periodic payments called dividends to the firms residual claimants.(b) A debt instrument is intermediate term if its maturity is less than one year.(c) A debt instrument is long term if its maturity is ten years or longer.(d) The maturity of a debt instrument is the time (term) that has elapsed since it was issued.8. Which of the following can be described as involving indirect finance?A. A bank buys a U.S. Treasury bill from one of its depositors.B. A corporation buys commercial paper issued by another corporation.C. A pension fund manager buys commercial paper in the primary market.D. Both A and C of the above.9. Financial intermediaries _.A. exist because there are substantial information and transaction costs in the economyB. improve the lot of the small saverC. are involved in the process of indirect financeD. do all of the above10. Bonds that are sold in a foreign country and are denominated in that countrys currency are known as(a) foreign bonds.(b) Eurobonds.(c) Eurocurrencies.(d) Eurodollars.11. Bonds that are sold in a foreign country and are denominated in a currency other than that of the country in which they are sold are known as(a) foreign bonds.(b) Eurobonds.(c) Eurocurrencies.(d) Eurodollars.10. Financial intermediaries(a) exist because there are substantial information and transaction costs in the economy.(b) improve the lot of the small saver.(c) are involved in the process of indirect finance.(d) do all of the above.(e) do only (a) and (b) of the above.Chapter 3What Do Interest Rates Mean and What Is TheirRole in Valuation?12.A coupon bond pays the owner of the bond(a) the same amount every month until maturity date.(b) a fixed interest payment every period and repays the face value at the maturity date.(c) the face value of the bond plus an interest payment once the maturity date has been reached.(d) the face value at the maturity date.(e) none of the above.13.A bonds future payments are called its(a) cash flows.(b) maturity values.(c) discounted present values.(d) yields to maturity.14. A credit market instrument that pays the owner the face value of the security at the maturity dateand nothing prior to then is called a(a) simple loan.(b) fixed-payment loan.(c) coupon bond.(d) discount bond.15.(I) A simple loan requires the borrower to repay the principal at the maturity date along with an interest payment. (II) A discount bond is bought at a price below its face value, and the face value is repaid at the maturity date.(a) (I) is true, (II) false.(b) (I) is false, (II) true.(c) Both are true.(d) Both are false.16. Which of the following are true of coupon bonds?(a) The owner of a coupon bond receives a fixed interest payment every year until the maturity date, when the face or par value is repaid.(b) U.S. Treasury bonds and notes are examples of coupon bonds.(c) Corporate bonds are examples of coupon bonds.(d) All of the above.(e) Only (a) and (b) of the above.17. If a $10,000 face value discount bond maturing in one year is selling for $5,000, then its yield to maturity is(a) 5 percent.(b) 10 percent.(c) 50 percent.(d) 100 percent.18 If a $5,000 face value discount bond maturing in one year is selling for $5,000, then its yield to maturity is(a) 0 percent.(b) 5 percent.(c) 10 percent.(d) 20 percent.19. The Fisher equation states that(a) the nominal interest rate equals the real interest rate plus the expected rate of inflation.(b) the real interest rate equals the nominal interest rate less the expected rate of inflation.(c) the nominal interest rate equals the real interest rate less the expected rate of inflation.(d) both (a) and (b) of the above are true.(e) both (a) and (c) of the above are true.20 If you expect the inflation rate to be 15 percent next year and a one-year bond has a yield to maturity of 7 percent, then the real interest rate on this bond is(a) 7 percent.(b) 22 percent.(c) 15 percent.(d) 8 percent.(e) none of the above.21. Which of the following $1,000 face value securities has the highest yield to maturity?A. A 5 percent coupon bond selling for $1,000B. A 10 percent coupon bond selling for $1,000C. A 12 percent coupon bond selling for $1,000D. A 12 percent coupon bond selling for $1,10022. If a $5,000 coupon bond has a coupon rate of 13 percent, then the coupon payment every year is _.A. $650 B. $1,300 C. $130 D. None of the above 23 If you expect the inflation rate to be 5 percent next year and a one-year bond has a yield to maturity of 7 percent, then the real interest rate on this bond is(a) 12 percent.(b) 2 percent.(c) 2 percent.(d) 12 percent.Chapter 4Why Do Interest Rates Change?24. When the price of a bond is below the equilibrium price, there is excess _ in the bond market and the price will _.(a) demand; rise(b) demand; fall(c) supply; fall(d) supply; rise25 When the price of a bond is _ the equilibrium price, there is an excess supply of bonds and the price will _.(a) above; rise(b) above; fall(c) below; fall(d) below; rise26. When the price of a bond is _ the equilibrium price, there is an excess demand for bonds and the price will _.(a) above; rise(b) above; fall(c) below; fall(d) below; rise27. When the interest rate on a bond is above the equilibrium interest rate, there is excess _ in the bond market and the interest rate will _.(a) demand; rise(b) demand; fall(c) supply; fall(d) supply; rise28. Wh.en the interest rate on a bond is below the equilibrium interest rate, there is excess _ in the bond market and the interest rate will _.(a) demand; rise(b) demand; fall(c) supply; fall(d) supply; rise29.When the interest rate on a bond is _ the equilibrium interest rate, there is excess _ in the bond market and the interest rate will _.(a) above; demand; fall(b) above; demand; rise(c) below; supply; fall(d) above; supply; rise30. When the interest rate on a bond is _ the equilibrium interest rate, there is excess _ in the bond market and the interest rate will _.(a) below; demand; rise(b) below; demand; fall(c) below; supply; rise(d) above; supply; fall31 When the demand for bonds _ or the supply of bonds _, interest rate rise.(a) increases; increases(b) increases; decreases(c) decreases; decreases(d) decreases; increases32. When the demand for bonds _ or the supply of bonds _, interest rates fall.(a) increases; increases(b) increases; decreases(c) decreases; decreases(d) decreases; increases33 When the demand for bonds _ or the supply of bonds _, bond prices rise.(a) increases; decreases(b) decreases; increases(c) decreases; decreases(d) increases; increases34. What is the return on a 5 percent coupon bond that initially sells for $1,000 and sells for $900 one year later?A. 5 percent B. 10 percent C. 5 percent D. 10 percent12. As the price of a bond _ and the expected return _, bonds become more attractive to investors and the quantity demanded rises.A. falls; rises B. falls; falls C. rises; rises D. rises; falls 35. Considering the following diagram. The most likely cause of the increase in the equilibrium interest rate from i1 to i2 is a(n) _ in the _. A. increase; expected inflation rate B. decrease; expected inflation rate.C. increase; government budget deficit D. decrease; government budget deficitChapter 5How Do Risk and Term Structure Affect Interest Rates?36. (I) An increase in default risk on corporate bonds shifts the demand curve for corporate bonds to the right. (II) An increase in default risk on corporate bonds shifts the demand curve for Treasury bonds to the left.(a) (I) is true, (II) false.(b) (I) is false, (II) true.(c) Both are true.(d) Both are false.37 (I) An increase in default risk on corporate bonds shifts the demand curve for corporate bonds to the left. (II) An increase in default risk on corporate bonds shifts the demand curve for Treasury bonds to the right.(a) (I) is true, (II) false.(b) (I) is false, (II) true.(c) Both are true.(d) Both are false.38. When budget talks between congressional Republicans and President Clinton occurred in late 1995, fear of a government default _, Treasury bond values _, and interest rates on Treasury bonds _.(a) rose; fell; rose(b) rose; rose; rose(c) fell; rose; fell(d) fell; fell; fell39. The spread between interest rates on low quality corporate bonds and U.S. government bonds _ during the Great Depression.(a) was reversed(b) narrowed significantly(c) widened significantly(d) did not change40. As a result of the Enron collapse and bankruptcy, the demand for low quality corporate bonds _, the demand for high quality corporate bonds _, and the risk spread _.(a) increased; decreased; was unchanged(b) decreased; increased; increased(c) increased; decreased; decreased(d) decreased; increased; was unchanged41. Moodys and Standard and Poors are agencies that(a) help investors collect when corporations default on their bonds.(b) advise municipal bond issuers on the tax exempt status of their bonds.(c) produce information about the probability of default on corporate bonds.(d) maintain liquid markets for corporate bonds.42 If Moodys or Standard and Poors downgrades its rating on a corporate bond, the demand for the bond _ and its yield _.(a) increases; decreases(b) decreases; increases(c) increases; increases(d) decreases; decreases43. Corporate bonds are not as liquid as government bonds because(a) fewer bonds for any one corporation are traded, making them more costly to sell.(b) the corporate bond rating must be calculated each time they are traded.(c) corporate bonds are not callable.(d) all of the above.(e) only (a) and (b) of the above.44 Which of the following statements are true?(a) Because coupon payments on municipal bonds are exempt from federal income tax, the expected after-tax return on them will be higher for individuals in higher income tax brackets.(b) An increase in tax rates will increase the demand for Treasury bonds, lowering their interest rates.(c) Interest rates on municipal bonds will be higher than on comparable bonds without the tax exemption.(d) Only (a) and (b) are true statements.45. When a municipal bond is given tax-free status, the demand for municipal bonds shifts _, causing the interest rate on the bond to _(a) leftward; rise.(b) leftward; fall.(c) rightward; rise.(d) rightward; fall.46. If a corporation begins to suffer large losses, then the default risk on its bonds will _ and the equilibrium interest rate on these bonds will _.A. increase; decrease B. decrease; increaseC. increase; increase D. decrease; decrease47. According to the pure expectations theory of the term structure, _.A. when the yield curve is steeply upward-sloping, short-term interest rates are expected to rise in the futureB. when the yield curve is downward-sloping, short-term interest rates are expected to decline in the futureC. buyers of bonds prefer short-term to long-term bondsD. only A and B of the aboveChapter 9The Money Markets48. Brokerage firms that offered money market security accounts in the 1970s had a cost advantage over banks in attracting funds because the brokerage firms(a) were not subject to deposit reserve requirements.(b) were not subject to the deposit interest rate ceilings.(c) were not limited in how much they could borrow from depositors.(d) had the advantage of all the above.(e) had the advantage of only (a) and (b) of the above.49 Which of the following statements about the money market are true?(a) Not all commercial banks deal for their customers in the secondary market.(b) Money markets are used extensively by businesses both to warehouse surplus funds and to raise short-term funds.(c) The single most influential participant in the U.S. money market is the U.S. Treasury Department.(d) All of the above are true.(e) Only (a) and (b) of the above are true.50. Which of the following statements about the money markets are true?(a) Most money market securities do not pay interest. Instead the investor pays less for the security than it will be worth when it matures.(b) Pension funds invest a portion of their assets in the money market to have sufficient liquidity to meet their obligations.(c) Unlike most participants in the money market, the U.S. Treasury Department is always a demander of money market funds and never a supplier.(d) All of the above are true.(e) Only (a) and (b) of the above are true.51. Which of the following are true statements about participants in the money markets?(a) Large banks participate in the money markets by selling large negotiable CDs.(b) The U.S. government and corporations borrow in the money markets because cash inflows and outflows are rarely synchronized.(c) The Federal Reserve is the single most influential participant in the U.S. money market.(d) All of the above are true.(e) Only (a) and (b) of the above are true.52. The most influential participant(s) in the U.S. money market(a) is the Federal Reserve.(b) is the U.S. Treasury Department.(c) are the large money center banks.(d) are the investment banks that underwrite securities.53. The Fed is an active participant in money markets mainly because of its responsibility to(a) lower borrowing costs to encourage capital investment.(b) control the money supply.(c) increase the interest income of retirees holding money market instruments.(d) assist the Securities and Exchange Commission in regulating the behavior other money market participants.54. Commercial banks are large holders of _ and are the major issuer of _.(a) negotiable certificates of deposit; U.S. government securities(b) U.S. government securities; negotiable certificates of deposit(c) commercial paper; Eurodollars(d) Eurodollars; commercial paper55. The primary function of large diversified brokerage firms in the money market is to(a) sell money market securities to the Federal Reserve for its open market operations.(b) make a market for money market securities by maintaining an inventory from which to buyor sell.(c) buy money market securities from corporations that need liquidity.(d) buy T-bills from the U.S. Treasury Department.56. Finance companies raise funds in the money market by selling(a) commercial paper.(b) federal funds.(c) negotiable certificates of deposit.(d) Eurodollars.57. Finance companies play a unique role in money markets by (a) giving consumers indirect access to money markets.(b) combining consumers investments to purchase money market securities on their behalf.(c) borrowing in capital markets to finance purchases of money market securities.(d) assisting the government in its sales of U.S. Treasury securities.10. Money market securities have all the following characteristics except they are not _.A. short term B. money C. low risk D. very liquid11. Which of the following statements about the money markets are true?A. Most money market securities do not pay interest. Instead the investor pays less for the security than it will be worth when it matures.B. Pension funds invest a portion of their assets in the money market to have sufficient liquidity to meet their obligations.C. Unlike most participants in the money market, the U.S. Treasury Department is always a demander of money market funds and never a supplier.D. All of the above are true.Chapter 1058. A firm that chooses to finance a new plant by issuing money market securities(a) must incur the cost of issuing new securities to roll over its debt.(b) runs the risk of having to pay higher interest rates when it rolls over its debt.(c) incurs both the