4.

Well-functioning financial markets

(4 Điểm)

(a) cause inflation.

(b) eliminate the need for indirect finance.

(c) cause financial crises.

(d) produce an efficient allocation of capital.

(e) promote political instability.

5.Which of the following can be described as involving indirect finance?
(4 Điểm)

(d) Both (a) and (b) of the above.

(b) A corporation buys a short-term security issued by another corporation.

(c) A pension fund manager buys a short-term security from the issuing corporation.

(a) A corporation’s stock is traded in an over-the-counter market.

6.Which of the following are securities?
(4 Điểm)

(a) A corporate bond

(d) Each of the above

(c) A Treasury bill

(b) A share of Texaco common stock

(e) Only (a) and (b) of the above

7.Which of the following statements about the characteristics of debt and equity are true?
(4 Điểm)

(c) Debt is a claim on the issuer’s assets, but equity is a claim on the issuer’s income.

(e) Both (a) and (c) of the above

(d) Both (a) and (b) of the above.

(a) They can both be long-term financial instruments

(b) They can both be short-term financial instruments.

8.The higher a security’s price in the secondary market
(4 Điểm)

(b) the more funds a firm can raise by selling securities in the secondary market.

(a) the more funds a firm can raise by selling securities in the primary market.

(d) the less funds a firm can raise by selling securities in the secondary market

(e) secondary market prices have no effect on the funds a firm can raise.

(c) the less funds a firm can raise by selling securities in the primary market.
9.Which of the following statements about financial markets and securities are true?
(4 Điểm)

(a) A bond is a debt security that promises to make payments for a specified period of time

(d) All of the above are true.

(b) Equities often make periodic payments called dividends and are considered to be long-
term

(e) Only (a) and (b) of the above are true

(c) A debt instrument is short term if its maturity is less than ten years.
10.Financial intermediaries lower costs by spreading them over a large number of
customers, thereby taking advantage of
(4 Điểm)

(e) transactions costs.

(a) risk sharing.

(c) economies of scale.

(b) diversification.

(d) asymmetric information.

11.Financial intermediaries
(4 Điểm)

(e) do only (a) and (b) of the above

(b) improve the lot of the small saver.

(a) exist because there are substantial information and transactions costs in the economy

(d) do each of the above.

(c) are involved in the process of indirect finance.
12.Which of the following long-term bonds currently has the lowest interest rate?
(4 Điểm)

(c) Corporate Aaa bonds

(b) U.S. Treasury bonds

(a) Corporate Baa bonds

(d) Municipal bonds

13.Bonds with relatively low risk of default are called _____ securities and have a rating of
Baa (or BBB) and above; bonds with ratings below Baa (or BBB) have a higher default risk
and are called _____.
(4 Điểm)

(d) high quality; junk bonds

(b) investment grade; junk bonds

(a) investment grade; lower grade

(c) high quality; lower grade

14.The relationship among interest rates on bonds with identical default risk, but of different
maturities is called the
(4 Điểm)

(d) yield curve.

(c) bond demand curve.

(a) time-risk structure of interest rates.

(b) liquidity structure of interest rates.

15.When yield curves are downward sloping
(4 Điểm)

(e) medium-term interest rates are below both short-term and long-term interest rates.

(d) medium-term interest rates are above both short-term and long-term interest rates.

(c) short-term interest rates are about the same as long-term interest rates.

(b) short-term interest rates are above long-term interest rates.

(a) long-term interest rates are above short-term interest rates.

16. According to the expectations theory of the term structure
(4 Điểm)
(a) the interest rate on long-term bonds will equal an average of short-term interest rates that
people expect to occur over the life of the long-term bonds.

(c) interest rates on bonds of different maturities move together over time.

(e) only (a) and (b) of the above.

(d) all of the above.

(b) buyers of bonds do not prefer bonds of one maturity over another.
17. According to the expectations theory of the term structure
(4 Điểm)

(d) all of the above.

(a) when the yield curve is steeply upward sloping, short-term interest rates are expected to
rise in the future.

(c) buyers of bonds prefer short-term to long-term bonds.

(e) only (a) and (b) of the above.

(b) when the yield curve is downward sloping, short-term interest rates are expected to
decline in the future.
18.According to the segmented markets theory of the term structure
(4 Điểm)

(c) interest rates on bonds of different maturities do not move together over time.

(a) the interest rate on long-term bonds will equal an average of short-term interest rates that
people expect to occur over the life of the long-term bonds.

(b) buyers of bonds do not prefer bonds of one maturity over another.

(d) all of the above.

19.According to the segmented markets theory of the term structure
(4 Điểm)

(c) investors’ strong preferences for short-term relative to long-term bonds explains why yield
curves typically slope downward.

(a) the interest rate for each maturity bond is determined by supply and demand for that
maturity bond.

(b) bonds of one maturity are not substitutes for bonds of other maturities, therefore, interest
rates on bonds of different maturities do not move together over time.
(d) only (a) and (b) of the above.
20.The liquidity premium theory of the term structure
(4 Điểm)

(d) does none of the above.

(c) suggests that markets for bonds of different maturities are completely separate because
people have preferred habitats.

(a) indicates that today’s long-term interest rate equals the average of short-term interest
rates that people expect to occur over the life of the long-term bond.

(b) assumes that bonds of different maturities are perfect substitutes.

21.Which of the following are reported as liabilities on a bank’s balance sheet?
(4 Điểm)

(e) Only (b) and (c) of the above

(a) Nontransaction deposits

(b) Bank capital

(d) Only (a) and (b) of the above

(c) Loans
22.Which of the following are not reported as assets on a bank’s balance sheet?
(4 Điểm)

(b) Borrowings

(d) Reserves

(c) U.S. Treasury securities

(a) Cash items in the process of collection

23.Assume that today, the annualized two-year interest rate is 12 percent, and the one-year
interest rate is 9 percent. A three-year security has an annualized interest rate of 14 percent.
What is the one-year forward rate two years from now?
(4 Điểm) tìm khum ra

d.15.67 percent

b.113 percent

a.12.67 percent

e.none of the above

c.195 percent
24.Assume that the current yield on one-year securities is 6 percent, and that the yield on a
two-year security is 7 percent. If the liquidity premium on a two-year security is 0.4 percent,
then the one-year forward rate is
(4 Điểm)

b. 7.6 percent.

d. 7.0 percent.

a. 8.0 percent.

c. 3.0 percent.
25.Securities firms focus on ____ market services; brokerage firms focus on ____ market
services.
(4 Điểm)

d. secondary; secondary

b. secondary; primary

c. primary; secondary

a. primary; primary
26.Which of the following services do securities firms (IBFs) not provide?
(4 Điểm)

a. origination

b. underwriting stock

c. distribution of stock

d. advising

e. IBFs provide all of the services above

27. ____ is not a service a securities firm provides in placing bonds.
(4 Điểm)

d.Advising

a.Origination

b.Underwriting

c.Distribution

e.All of the above are services securities firms provide in placing bonds
28.When a bank in need of funds for a few days sells some of its government securities to a
corporation with a temporary excess of funds, then buys them back shortly thereafter, this is
aTrình đọc Chân thực
(4 Điểm)

a.federal funds loan.

c. repurchase agreement.

b.discount window loan.

d.commercial paper transaction.