MishkinTBch米什金货币金融学题库

Financial Markets and Institutions^ 8e (Mishkin)Chapter 1 Why Study Financial Markets and Institutions?1.1Multiple Choice1)Financial maikets and institutionsA)involve the movement of huge quantities of money.B)affect the profits of businesses.C)affect the types of goods and sendees produced in an economy.D)do all of the above.E)do only A and B of the above.Answer: DTopic: Chapter 1.1 Why Study Fmancial MaiketsQuestion Status: Previous Edition2)Financial maiket activities affectA)peisonal wealth.B)spendmg decisions by individuals and busuiess films.C)the econom^s location in the business cycle.D)all of the above.Answer: DTopic: Chapter 1.1 Why Study Fmancial MaiketsQuestion Status: Previous Edition3)Maikets m which hinds are transfened fiom those who have excess fiinds available to those who have a shortage of available fluids are calledA)conunodity maikets.B)fluids maikets.C)derivative exchange maikets.D)financial maikets.Answer: DTopic: Chapter 1.1 Why Study Fmancial MaiketsQuestion Status: Previous Edition4)The price paid fbr the rental of bonowed fluids (usually expressed as a percentage of the rental of $100 per year) is conunoiily lefened to as theA)inflation rate.B)exchange rate.C)interest rate.D)aggregate price level.Answer: CTopic: Chapter 1.1 Why Study Fmancial MaiketsQuestion Status: Previous Edition5)The bond maikets are impoitant becauseA)they are easily the most widely followed financial maikets m the Umted States.B)they are the maikets where mteiest rates are detemiined.C)they are the maikets where foreign exchange rates are detemimed.D)all of the above.Answer: BTopic: Chapter 1.1 Why Study Fmancial MaiketsQuestion Status: Previous Edition6)hiterest rates are impoilant to financial institutions since an interest rate mcrease the cost of acquumg fiinds and the income from assets.A)decreases; decreasesB)mcieases; increasesC)decreases; incieasesD)increases; decreasesAnswer: BTopic: Chapter 1.1 Why Study Fmancial MaiketsQuestion Status: Previous Edition7)Typically, increasing mteiest ratesA)discourages individuals fiom saving.B)discourages coiporate mvestments.C)encourages corporate expansion.D)encourages corporate bonowing.E)none of the above.Answer: BTopic: Chapter 1.1 Why Study Fmancial MaiketsQuestion Status: Previous Edition8)Compaied to mteiest rates on long-term U.S. govenmient bonds, interest rates on fluctuate more and are lower on average.A)medium-quality coiporate bondsB)low-quality coiporate bondsC)lugh-quality coiporate bondsD)tluee-montli Treasuiy billsE)none of the aboveAnswer: DTopic: Chapter 1.1 Why Study Fmancial MaiketsQuestion Status: Previous Edition9)Compaied to mterest rates on long-term U.S. govenmient bonds, interest rates on tluee-month Treasury bills fluctuate and are on average.A)more; lowerB)less; lowerC)more; lugherD)less; higherAnswer: ATopic: Chapter 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition10)The stock maiket is important becauseA)it is where interest rates are determined.B)it is the most widely followed financial maiket in the United States.C)it is where foreign exchange rates are deteimined.D)all of the above.Answer: BTopic: Chapter 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition11)Stock prices smce the 1980s have beenA)relatively stable, trending upward at a steady pace.B)relatively stable, tiending downward at a moderate rate.C)extiemely volatile.D)unstable, trendmg downwaid at a moderate rate.Answer: CTopic: Chapter 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition12)The largest one-day drop m the histoiy of the Aineiican stock markets occuned in A) 1929.B)1987.C)2000.D)2001.Answer: BTopic: Chapter 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition13) A declining stock market index due to lower share pricesA)reduces people's wealth and as a result may reduce then willingness to spend.B)mcieases people's wealth and as a result may increase their willmgness to spend.C)decreases the amount of hinds that business films can raise by sellmg newly issued stock.D)both A and C of the above.E)both B and C of the above.Answer: DTopic: Chapter 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition14)Changes m stock pricesA)affect people's wealth and their willmgness to spend.B)affect films' decisions to sell stock to finance investment spending.C)are chaiacteiized by considerable fluctuations.D)all of the above.E)only A and B of the above.Answer: DTopic: Chapter 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition15)(I) Debt maikets are often refened to genencally as the bond maiket.(II) A bond is a security that is a claim on the earnings and assets of a corporation.A)(I) is tine, (II) false.B)(I) is false, (II) tine.C)Both are tme.D)Both are false.Answer: ATopic: Chapter 1.1 Why Study Fmancial MaiketsQuestion Status: Previous Edition16) (I) A bond is a debt secunty that pionuses to make payments peiiodically for a specified penod of tune. (II) A stock is a secunty that is a claim on the eanimgs and assets of a coipoiation.A)(I) is true, (II) false.B)(I) is false, (II) tine.C)Both are tme.D)Both are false.Answer: CTopic: Chapter 1.1 Why Study Fmancial MaiketsQuestion Status: Previous Edition17)The piice of one country's cunency in terms of anothei J s is calledA)the foreign exchange rate.B)the interest rate.C)the Dow Jones mdustrial average.D)none of the above.Answer: ATopic: Chapter 1.1 Why Study Fmancial MaiketsQuestion Status: Previous Edition18) A stronger dollar benefits and hints.A)Aineiican busuiesses; Aineiican consumeisB)Aineiican busmesses; foreign businessesC)Aineiican consumeis; Aineiican busmessesD)foreign businesses; Ameiican consumeisAnswer: CTopic: Chaptei 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition19) A weaker dollar benefits and hurts.A)Aineiican busmesses; Aineiican consumeisB)Aineiican busmesses; foieign consumersC)Aineiican consumeis; Aineiican busmessesD)foreign businesses; Ameiican consumersAnswer: ATopic: Chaptei 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition20)From 1980 to early 1985 the dollar in value, thereby benefitingAinencan.A)appreciated; businessesB)appreciated; consumersC)depreciated; businessesD)depreciated; consumersAnswer: BTopic: Chaptei 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition21)hi generaL fiom 2001 tluough 2013, the dollar m value relative tomajor foreign cuuencies.A)appreciatedB)depreciatedC)lemained about the sameAnswer: BTopic: Chaptei 1.1 Why Study Fmancial MarketsQuestion Status: New Question22)Money is defined asA)anythmg that is geneially accepted in payment fbr goods and sendees or in the repayment of debt.B)bills of exchange.C) a nskless repositoiy of spending power.D)all of the above.E)only A and B of the above.Answer: ATopic: Chaptei 1.2 Why Study Financial InstitutionsQuestion Status: Previous Edition23)The organization responsible fbf the conduct of monetaiy policy in the United States is theA)Comptioller of the Currency.B)U.S. Treasuiy.C)Federal Reserve System.D)Bureau of Monetaiy Affaus.Answer: CTopic: Chaptei 1.2 Why Study Fmancial InstitutionsQuestion Status: Previous Edition24)The central bank of the United States isA)Citicoip.B)The Fed.C)Bank of America.D)The Tieasuiy.E)none of the above.Answer: BTopic: Chaptei 1.2 Why Study Fmancial InstitutionsQuestion Status: Previous Edition25)Monetaiy policy is cluefly concerned withA)how much money businesses earn.B)the level of mterest rates and the nation's money supply.C)how much money people pay in taxes.D)whether people have saved enough money for letnement.Answer: BTopic: Chaptei 1.2 Why Study Fmancial InstitutionsQuestion Status: Previous Edition26)Econonusts group conuneicial banks, savings and loan associations, credit unions, mutual ftinds, mutual savings banks, msuiance companies, pension fiinds, and finance companies together under the heading financial inteniiedianes. Financial mtermedianes A)act as middlemen, bonowmg ftinds fiom those who have saved and lending these fluids to others.B)produce nothing of value and are therefore a drain on society's resoui ces.C)help promote a more efficient and dynamic economy.D)do all of the above.E)do only A and C of the above.Answer: ETopic: Chaptei 1.2 Why Study Fmancial InstitutionsQuestion Status: Previous Edition27)Econonusts group conuneicial banks, savings and loan associations, credit unions, mutual fiinds, mutual savings banks, msuiance companies, pension fiinds, and finance companies together under the heading financial inteimedianes. Financial mtermedianesA)act as middlemen, bonowmg fiinds fiom those who have saved and lending these fimds to others.B)play an important role in detemmuiig the quantity of money m the economy.C)help promote a more efficient and dynanuc economy.D)do all of the above.E)do only A and C of the above.Answer: DTopic: Chapter 1.2 Why Study Fmancial InstitutionsQuestion Status: Previous Edition28)Banks are unpoitant to the study of money and the economy because they A) provide a chaimel for Imkrng those who want to save with those who want to mvest.B)have been a source of financial nmovation that is expandmg the alternatives available to those wanting to mvest then money.C)are the only financial mstitution to play a role in detemuiHiig the quantity of money in the economy.D)do all of the above.E)do only A and B of the above.Answer: ETopic: Chapter 1.2 Why Study Fmancial InstitutionsQuestion Status: Previous Edition29)Banks, savings and loan associations, mutual savings banks, and credit unions A) are no longer unportant players in financial intemiediation.B)have been providing services only to small depositors since deregulation.C)have been adept at iimovating in response to changes in the regulatoiy envuomnent.D)all of the above.E)only A and C of the above.Answer: CTopic: Chapter 1.2 Why Study Fmancial InstitutionsQuestion Status: Previous Edition30)(I) Banks are financial intennediaiies that accept deposits and make loans.(II) The tenn n baiiks n includes films such as commercial banks, savmgs and loan associations, mutual savings banks, credit unions, msuiance companies, and pensionfluids.A)(I) is true, QI) false.B)(I) is false, (II) tine.C)Both are tme.D)Both are false.Answer: ATopic: Chapter 1.2 Why Study Fmancial InstitutionsQuestion Status: Previous Edition31)was the stock market^ worst one-day chop in histoiy in the 1980s.A)Black FridayB)Black MondayC)Blackout DayD)none of the aboveAnswer: BTopic: Chapter 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition32)The largest financial intennedianes areA)insuiance companies.B)finance compames.C)banks.D)all of the above.Answer: CTopic: Chapter 1.2 Why Study Financial InstitutionsQuestion Status: Previous Edition33)hi recent yearsA)interest rates have lemained constant.B)the success of financial institutions has leached levels unpiecedented smce the Great Depiession.C)stock markets have crashed.D)all of the above.Answer: CTopic: Chapter 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition34) A securityA)is a claun oi puce of propeity that is subject to ownership.B)piomises that payments will be made penodically fbr a specified penod of time.C)is the piice paid fbr the usage of ftinds.D)is a claun on the issuers fiituie mcome.Answer: DTopic: Chapter 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition35)are an example of a financial institution.A)BanksB)hisuiance companiesC)Fmance companiesD)All of the aboveAnswer: DTopic: Chapter 1.2 Why Study Fmancial InstitutionsQuestion Status: Previous Edition36)Monetaiy policy affectsA)interest rates.B)mflation.C)business cycles.D)all of the above.Answer: DTopic: Chapter 1.2 Why Study Fmancial InstitutionsQuestion Status: Previous Edition37) A using stock market index due to higher share pricesA)increases people's wealth and as a result may increase their willmgness to spend.B)uicieases the amount of fluids that business firms can raise by selling newly issued stock.C)decreases the amount of hinds that business films can raise by selling newly issued stock.D)both A and B of the above.Answer: DTopic: Chapter 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition38)From the peak of the high-tech bubble in 2000, the stock market byovei by late 2002.A)collapsed; 75%B)rose; 35%C)collapsed; 30%D)rose; 50%Answer: CTopic: Chapter 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition39)The Dow fell below 7,000 m 2009, only to start a bull market run, reaching new highs above m 2013.A)12,000B)10,000C) 15,000D) 19,000Answer: CTopic: Chapter 1.1 Why Study Fmancial MarketsQuestion Status: New Question1.2 Tme/False1)Money is anything accepted by anyone as payment fbr services or goods.Answer: TRUETopic: Chapter 1.2 Why Study Fmancial InstitutionsQuestion Status: Previous Edition2)hiterest rates are determined in the bond markets.Answer: TRUETopic: Chapter 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition3) A stock is a debt secuiity that promises to make penodic payments fbr a specific period of time.Answer: FALSETopic: Chapter 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition4)Monetaiy policy affects interest rates but has little effect on inflation oi busmess cycles.JAnswer: FALSETopic: Chapter 1.2 Why Study Fmancial InstitutionsQuestion Status: Previous Edition5)The govenunent orgamzation lesponsible for the conduct of monetaiy policy m the United States is the U.S. Treasuiy.Answer: FALSETopic: Chapter 1.2 Why Study Financial InstitutionsQuestion Status: Previous Edition6)hiterest rates can be accuiately described as the rental price of money.Answer: TRUETopic: Chapter 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition7)Holding eveiytliuig else constant, as the dollar weakens vacations abroad become less attractive.Answer: TRUETopic: Chapter 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition8)In recent years, financial markets have become more stable and less risky. Answer: FALSETopic: Chapter 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition9)Financial innovation lias provided more options to both mvestors and bonowers. Answer: TRUETopic: Chaptei 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition10) A financial mtennediaiy borrows fiinds fiom people who have saved.Answer: TRUETopic: Chaptei 1.2 Why Study Fmancial InstitutionsQuestion Status: Previous Edition11)Holding eveiything else constant, as the dollar strengthens fbieigneis will buy more U.S. exports.Answer: FALSETopic: Chaptei 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition12)In a bull market stock prices are rising, on average.Answer: TRUETopic: Chaptei 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition13)Financial institutions are among the largest employers m the country and fiequently pay very high salaries.Answer: TRUETopic: Chaptei 1.3 Applied Managerial PerspectiveQuestion Status: Previous Edition14)Different interest rates have a tendency to move in unison.Answer: TRUETopic: Chaptei 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition15)Financial markets are what makes financial mstitutions work.Answer: FALSETopic: Chaptei 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition16)In recent years, financial markets have become more iisky. However, only a linuted number of tools (such as deiivatives) are available to assist in managing this lisk. Answer: FALSETopic: Chaptei 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition17)Although the internet has changed many aspects of oui lives, it hasn't proven veiy usefill for collectmg and/oi analyzmg financial and econonuc data.Answer: FALSETopic: Chapter 1.4 How We Study Fmancial Markets and InstitutionsQuestion Status: New Question1.3 Essay1)Have inteiest rates been more or less volatile m recent years? Why?Topic: Chapter 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition2)Why should consumers be concerned with movements in foreign exchange rates?Topic: Chapter 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition3)How does the value of the dollar affect the competitiveness of Aineiican busmesses? Topic: Chapter 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition4)What is monetaiy policy and who is responsible fbi its implementation?Topic: Chapter 1.2 Why Study Fmancial InstitutionsQuestion Status: Previous Edition5)What are financial intennediaiies and what do they do?Topic: Chapter 1.2 Why Study Fmancial InstitutionsQuestion Status: Previous Edition6)What is money?Topic: Chapter 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition7)How does a bond differ fiom a stock?Topic: Chapter 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition8)Why is the stock market so important to individuals, films, and the economy? Topic: Chapter 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition9)What is the cential bank and what does it do?Topic: Chapter 1.2 Why Study Fmancial InstitutionsQuestion Status: Previous Edition10)If you are plaiming a vacation to Europe, do you prefer a strong dollar or weak dollar relative to the euio? Why?JTopic: Chapter 1.1 Why Study Fmancial MarketsQuestion Status: Previous Edition11)How has the stock market peifbimed smce 2000?Topic: Chapter 1.1 Why Study Fmancial MarketsQuestion Status: New Question。

米什金货币金融学英文版习题答案chapter4英文习题Economics of Money, Banking, and Financial Markets, 11e, Global Edition(Mishkin)Chapter 4The Meaning of Interest Rates4.1Measuring Interest Rates1) The concept of ________ is based on the common-sense XXX.A) present valueB) future valueC) interestD) deflationXXX:Aof Knowledge2) The present value of an expected future payment ________ as the interest rate XXX) fallsB) risesC) is constantD) is unaffectedXXX:AThinking3) An increase in the time to the promised future payment ________ the present value of XXX.A) decreasesB) increasesC) has no effect onD) is XXXXXX:AThinking4) With an interest rate of 6 percent, the present value of $100 next year is approximatelyA) $106.B) $100.C) $94.D) $92.Answer:CThinking5) What is the present value of $500.00 to be paid in two years if the interest rate is 5 percent?A) $453.51B) $500.00C) $476.25D) $550.00XXX:AThinking6) If a security pays $55 in one year and $133 in three years, its present value is $150 if XXXA) 5 percent.B) 10 percent.C) 12.5 percent.D) 15 percent.XXX:BThinking7) XXX who is to receive $1 million per year for twenty years has won$20 million ignores the process ofA) face value.B) par value.C) deflation.D) discounting the future.XXX:DThinking8) A credit market XXX with an amount of XXX date along with an interest payment is known as aA) simple loan.B) fixed-payment loan.C) XXX.D) discount bond.XXX:Aof Knowledge9) A credit market instrument that requires the borrower to make the same payment XXX date is known as aA) simple loan.B) fixed-payment loan.C) XXX.D) discount bond.XXX:Bof Knowledge10) Which of the following are TRUE of fixed payment loans?A) XXX.B) XXX.C) XXX.D) XXX are often of this type.XXX:BThinking11) A XXX is another name forA) a simple loan.B) a fixed-payment loan.C) a commercial loan.D) an unsecured loan.XXX:Bof Knowledge12) A credit market XXX date and then repays the face value is called aA) simple loan.B) fixed-payment loan.C) XXX.D) discount bond.Answer:Cof Knowledge13) A ________ pays the owner a fixed coupon payment every year until the maturity date, whenthe ________ value is repaid.A) coupon bond; discountB) discount bond; discountC) coupon bond; faceD) discount bond; faceAnswer:CThinking14) The ________ is the final amount that will be paid to the XXX) discount valueB) coupon valueC) face valueD) present valueAnswer:Cof Knowledge15) When talking about a coupon bond, face value and ________ mean the same thing.A) par valueB) coupon valueC) amortized valueD) discount valueXXX:Aof Knowledge16) The dollar amount of the XXX of the face valueof the bond is called the bond'sA) XXX.B) maturity rate.C) face value rate.D) XXX.XXX:Aof Knowledge17) The ________ XXX rate times the par value of the bond.A) present valueB) face valueC) XXXD) maturity XXXAnswer:CThinking18) If a $1000 face value coupon bond has a coupon rate of3.75 percent, then the couponpayment every year isA) $37.50.B) $3.75.C) $375.00.D) $13.75XXX:AThinking19) If a $5,000 coupon bond has a coupon rate of 13 percent, then the XXXA) $650.B) $1,300.C) $130.D) $13.XXX:AThinking20) An $8,000 coupon bond with a $400 coupon payment every year has a coupon rate ofA) 5 percent.B) 8 percent.C) 10 percent.D) 40 percent.XXX:AThinking21) A $1000 face value coupon bond with a $60 coupon payment every year has a coupon rate ofA) .6 percent.B) 5 percent.C) 6 percent.D) 10 percent.Answer:CThinking22) All of the following are examples of XXXA) XXX.B) XXX.C) XXX.D) XXX.XXX:BThinking23) XXX at a price below its face value and the face value is XXX called aA) simple loan.B) fixed-payment loan.C) XXX.D) discount bond.XXX:Dof Knowledge24) A ________ is bought at a price below its face value, and the ________ value is XXX.A) coupon bond; discountB) discount bond; discountC) coupon bond; faceD) discount bond; faceXXX:DThinking25) A discount bondA) pays the bondholder a fixed amount every period and the face value at maturity.B) XXX.C) pays all interest and the face value at maturity.D) pays the face value at maturity plus any capital gain.XXX:BThinking26) Examples of discount bonds includeA) XXX.B) XXX.C) XXX.D) municipal bonds.XXX:AThinking27) Which of the following are TRUE for discount bonds?A) A discount XXX par.B) The purchaser receives the face value of the bond at the maturity date.C) XXX and notes are examples of discount bonds.D) The purchaser receives the par value at maturity plus any capital gains.XXX:BThinking28) The interest rate that equates the present value of payments received from a debt instrumentwith its value today is theA) simple interest rate.B) current yield.C) XXX.D) real interest rate.Answer:Cof Knowledge29) Economists consider the ________ to be the most XXX) simple interest rate.B) current yield.C) XXX.D) real interest rate.Answer:CThinking30) For simple loans, the simple interest rate is ________ the yield to maturity.A) greater thanB) less thanC) equal toD) not comparable toAnswer:Cof Knowledge31) If the amount payable in two years is $2420 for a simple loan at 10 percent interest, the loanamount isA) $1000.B) $1210.C) $2000.D) $2200.Answer:CThinking32) For a 3-year simple loan of $10,000 at 10 percent, the amount to be repaid isA) $10,030.B) $10,300.C) $13,000.D) $13,310.XXX:DThinking33) If $22,050 is the amount payable in two years for a $20,000 simple loan made today, XXXA) 5 percent.B) 10 percent.C) 22 percent.D) 25 percent.XXX:AThinking34) If a security pays $110 next year and $121 the year after that, what is its yield to maturity if itsells for $200?A) 9 percentB) 10 percentC) 11 percentD) 12 percentXXX:BThinking35) The present value of a fixed-payment loan is calculated as the ________ of the present valueof all cash flow payments.A) sumB) differenceC) multipleD) logXXX:AThinking36) Which of the following are TRUE for a coupon bond?A) When the coupon bond is priced at its face value, the yield to XXX) The price of a coupon bond and the yield to XXX.C) The yield to maturity is greater than the coupon rate when the bond price is above the parvalue.D) The yield is less than the coupon rate when the bond price is below the par value.Answer:AThinking37) The ________ of a coupon bond and the yield to maturity are inversely related.A) priceB) par valueC) maturity dateD) termXXX:AThinking38) The price of a coupon bond and the yield to maturity are ________ related; that is, as theyield to maturity ________, the price of the bond ________.A) positively; rises; risesB) negatively; falls; fallsC) positively; rises; fallsD) negatively; rises; fallsXXX:DThinking39) The yield to maturity is ________ than the ________ rate when the bond price is ________its face value.A) greater; coupon; aboveB) greater; coupon; belowC) greater; perpetuity; aboveD) less; perpetuity; belowXXX:BThinking40) The ________ is below the coupon rate when the bond price is ________ its par value.A) yield to maturity; aboveB) yield to maturity; belowC) discount rate; aboveD) discount rate; belowXXX:AThinking41) A $10,000 8 percent coupon bond that sells for $10,000 has a yield to maturity ofA) 8 percent.B) 10 percent.C) 12 percent.D) 14 percent.XXX:AThinking42) Which of the following $1,000 face-value securities has XXX?A) a 5 percent XXX,000B) a 10 percent XXX,000C) a 12 percent XXX,000D) a 12 percent XXX,100Answer:CThinking43) Which of the following $5,000 face-value securities has XXX?A) a 6 percent XXX,000B) a 6 XXX,500C) a 10 percent XXX,000D) a 12 percent XXX,500XXX:DThinking44) Which of the following $1,000 face-value securities has XXX?A) a 5 percent coupon bond with a price of $600B) a 5 percent coupon bond with a price of $800C) a 5 percent coupon bond with a price of $1,000D) a 5 percent coupon bond with a price of $1,200XXX:AThinking45) Which of the following $1,000 face-value securities has XXX?A) a 5 percent XXX,000B) a 10 percent XXX,000C) a 15 percent XXX,000D) a 15 percent XXXXXX:AThinking46) Which of the following bonds would you prefer to be buying?A) a $10,000 face-value security with a 10 percent XXX,000B) a $10,000 face-value security with a 7 percent XXX,000C) a $10,000 face-value security with a 9 percent XXX,000D) a $10,000 face-value security with a 10 percent XXX,000XXX:AThinking47) XXX and no repayment of principal is called aA) consol.B) cabinet.C) Treasury bill.D) Treasury note.XXX:Aof Knowledge48) The price of a XXXA) times the interest rate.B) plus the interest rate.C) minus the interest rate.D) divided by the interest rate.XXX:DThinking49) The interest rate on a consol equals theA) price times the XXX.B) XXX.C) XXX plus the price.D) XXX.XXX:DThinking50) A consol paying $20 annually when the interest rate is 5 percent has a price ofA) $100.B) $200.C) $400.D) $800.Answer:CThinking51) If a perpetuity has a price of $500 and an annual interest payment of $25, the interest rate isA) 2.5 percent.B) 5 percent.C) 7.5 percent.D) 10 percent.XXX:BThinking52) The yield to XXX. It is called the ________ when approximating the XXX.A) current yieldB) discount yieldC) future yieldD) XXX yieldXXX:AThinking53) The yield to maturity for a one-year discount bond equals the increase in price over the year,divided by theA) initial price.B) face value.C) interest rate.D) XXX.XXX:AThinking54) If a $10,000 face-value discount XXX,000, XXXA) 5 percent.B) 10 percent.C) 50 percent.D) 100 percent.XXX:DThinking55) If a $5,000 face-value discount XXX,000, then its XXXA) 0 percent.B) 5 percent.C) 10 percent.D) 20 percent.XXX:AThinking56) XXX for $15,000 with a face value of $20,000 in one year has a yield XXXA) 3 percent.B) 20 percent.C) 25 percent.D) 33.3 percent.XXX:DThinking57) The yield to maturity for a discount bond is ________ related to the current bond price.A) negativelyB) positivelyC) notD) directlyXXX:AThinking58) A discount bond is also called a ________ because the owner does not receive periodicpayments.A) XXX-coupon bondB) municipal bondC) corporate bondD) consolXXX:Aof Knowledge59) Another name for a consol is a ________ because it is a bond with no XXX.A) XXXB) discount bondC) municipalityD) high-yield bondXXX:Aof Knowledge60) If the interest rate is 5%, what is the present value of a security that pays you $1, 050 nextyear and $1,102.50 two years from now? If this security sold for $2200, is the yield to XXX less than 5%? Why?Answer:PV = $1,050/(1. +.05) + $1,102.50/(1 + 0.5)2PV = $2,000If this security sold for $2200, the yield to maturity is less than 5%. The lower the interest ratethe higher the present value.Thinking4.2The Distinction XXX1) The ________ is defined as the payments to the owner plus the change in a security'XXX.A) XXXB) current yieldC) rate of returnD) yield rateAnswer:Cof Knowledge2) Which of the following are TRUE concerning the distinction between interest rates andreturns?A) The rate of return on a bond will not necessarily equal the interest rate on that bond.B) The return can be expressed as the difference between the current yield and the rate of capitalgains.C) The rate of return will be greater than the interest rate when the price of the bond XXX.D) The return can be expressed as the sum of the discount yield and the rate of capital XXX:AThinking3) The sum of the current yield and the rate of capital gain is called theA) rate of return.B) discount yield.C) perpetuity yield.D) par value.XXX:AThinking4) What is the return on a 5 percent XXX initially sells for $1,000 and sells for$1,200 next year?A) 5 percentB) 10 percentC) -5 percentD) 25 percentXXX:DThinking5) What is the return on a 5 percent XXX initially sells for $1,000 and sells for $900next year?A) 5 percentB) 10 percentC) -5 percentD) -10 percentAnswer:CThinking6) The return on a 5 percent XXX initially sells for $1,000 and sells for $950 nextyear isA) -10 percent.B) -5 percent.C) 0 percent.D) 5 percent.Answer:CThinking7) Suppose you are holding a 5 percent XXX in one year witha yield tomaturity of 15 percent. If the interest rate on one-yearbonds rises from 15 percent to 20 percentover the course of the year, what is the yearly return on the bond you are holding?A) 5 percentB) 10 percentC) 15 percentD) 20 percentAnswer:CThinking8) I purchase a 10 percent coupon bond. Based on my purchase price, I XXX of 8 percent. If I hold this bond to maturity, then my return on this asset isA) 10 percent.B) 8 percent.C) 12 percent.D) there is not enough information to determine the return.XXX:BThinking9) If the interest rates on all bonds rise from 5 to 6 percent over the course of the year, whichbond would you prefer to have been holding?A) a bond with one year to maturityB) a bond with five years to maturityC) a bond with ten years to maturityD) XXXXXX:AThinking10) An equal decrease in all bond interest ratesA) increases the price of a five-year bond more than the price of a ten-year bond.B) increases the price of a ten-year bond more than the price of a five-year bond.C) decreases the price of a five-year bond more than the price of a ten-year bond.D) decreases the price of a ten-year bond more than the price of a five-year bond.XXX:BThinking11) An equal increase in all bond interest ratesA) increases the return to all XXX.B) decreases the return to all XXX.C) has no effect on the returns to bonds.D) decreases long-term bond returns more than short-term bond returns.XXX:DThinking12) Which of the following are generally TRUE of bonds?A) XXX when the time to maturity is the same as theholding period.B) A rise in interest rates is associated with a fall in bond prices, XXX.C) XXX, the smaller is the size of the price change associated with aninterest rate change.D) Prices and returns for short-term bonds are more volatile than those for longer-XXX:AThinking13) Which of the following are generally TRUE of all bonds?A) XXX, the greater is the rate of return that occurs as a result of theincrease in the interest rate.B) Even though a bond has a substantial initial interest rate, its return can turn out to be negativeif interest rates rise.C) Prices and returns for short-term bonds are more volatile than those for longer term bonds.D) A fall in interest rates results in capital XXX.XXX:BThinking14) XXXA) exchange-rate risk.B) price risk.C) asset risk.D) interest-rate risk.XXX:Dof Knowledge15) Interest-rate risk is the riskiness of an asset's returns due toA) interest-rate changes.B) XXX.C) default of the borrower.D) XXX.XXX:Aof Knowledge16) Prices and returns for ________ bonds are more volatile than those for ________ bonds,everything else held constant.A) long-term; long-termB) long-term; short-termC) short-term; long-termD) short-term; short-termXXX:BThinking7) There is ________ for any bond whose time to XXX) no interest-rate riskB) a large interest-rate riskC) rate-of-return riskD) yield-to-maturity riskXXX:AThinking18) All bonds that will not be held to maturity have interest rate risk which occurs because of thechange in the price of the bond as a result ofA) interest-rate changes.B) XXX.C) default of the borrower.D) XXX.XXX:Aof Knowledge19) Your favorite uncle advises you to purchase long-term bonds because their interest rate is10%. Should you follow his advice?Answer:It depends on where you think interest rates are headed in the future. If you thinkinterest rates will be going up, you should not follow your XXX your bond if you needed to sell it before the maturity date. Long-term bondshave a greater interest-rate risk.Thinking4.3The Distinction Between Real and Nominal Interest Rates1) The ________ interest rate is adjusted for expected changes in the price level.A) ex ante realB) ex post realC) ex post nominalD) ex ante nominalXXX:Aof Knowledge2) The ________ XXX the true cost of borrowing.A) nominalB) realC) discountD) marketXXX:BThinking3) The nominal interest rate minus the expected rate of inflationA) defines the real interest rate.B) is a less accurate measure of the XXX.C) is a less accurate indicator of the tightness of credit market XXX.D) XXX.XXX:AThinking4) When the ________ interest rate is low, there are greater incentives to ________ and fewerincentives to ________.A) nominal; lend; borrowB) real; lend; borrowC) real; borrow; lendD) market; lend; borrowAnswer:CThinking5) The interest rate that describes how well a lender has done in real terms after the XXXA) ex post real interest rate.B) ex ante real interest rate.C) ex post XXX.D) ex XXX.XXX:AThinking6) The ________ XXX the real interest rate plus XXX.A) Fisher XXXB) XXXC) Monetarist XXXD) XXXXXX:Aof Knowledge7) If the nominal rate of interest is 2 percent, and the expected inflation rate is -10 percent, thereal rate of interest isA) 2 percent.B) 8 percent.C) 10 percent.D) 12 percent.XXX:DThinking8) In which of the following XXX lender?A) The interest rate is 9 percent and the expected inflation rate is 7 percent.B) The interest rate is 4 percent and the expected inflation rate is 1 percent.C) The interest rate is 13 percent and the expected inflation rate is 15 percent.D) The interest rate is 25 percent and the expected inflation rate is 50 percent.XXX:BThinking9) In which of the following XXX?A) The interest rate is 9 percent and the expected inflation rate is 7 percent.B) The interest rate is 4 percent and the expected inflation rate is 1 percent.C) The interest rate is 13 percent and the expected inflation rate is 15 percent.D) The interest rate is 25 percent and the expected inflation rate is 50 percent.XXX:DThinking10) XXX rate to be 15 percent next year and a one-year bond has a yield tomaturity of 7 percent, then the real interest rate on this bond isA) 7 percent.B) 22 percent.C) -15 percent.D) -8 percent.XXX:DThinking11) XXX rate to be 12 percent next year and a one-year bond has a yield tomaturity of 7 percent, then the real interest rate on this bond isA) -5 percent.B) -2 percent.C) 2 percent.D) 12 percent.XXX:AThinking12) XXX rate to be 4 percent next year and a one year bond has a yield tomaturity of 7 percent, then the real interest rate on this bond isA) -3 percent.B) -2 percent.C) 3 percent.D) 7 percent.Answer:CThinking13) In the United States during the late 1970s, the nominal interest rates were quite high, but thereal interest rates werenegative. From the Fisher equation, XXX in the United States during this period wasA) XXX.B) XXX.C) negative.D) high.XXX:DThinking14) The interest rate on XXX) the real interest rate.B) the XXX.C) the rate of inflation.D) the rate of deflation.XXX:AThinking15) Assuming the same XXX, XXX Indexed Security and the yield on a XXXA) the XXX.B) the real interest rate.C) the XXX.D) the XXX.XXX:DThinking16) Assuming the same XXX, when the interest rate on a TreasuryInflation Indexed Security is 3 percent, and the yield on a nonindexed Treasury bond is 8 percent,the expected rate of XXXA) 3 percent.B) 5 percent.C) 8 percent.D) 11 percent.XXX:BThinking17) Would it make sense to buy a house when mortgage rates are 14% and expected XXX? XXX.though the nominal rate for the mortgage appears high, the real cost ofborrowing the funds is -1%. Yes, under this circumstance it XXX.Thinking4.4Web Appendix: Measuring Interest-Rate Risk: XXX1) Duration isA) XXX.B) the time until the next interest XXX.C) the average lifetime of a debt security's stream of payments.D) the time between interest XXX.Answer:Cof Knowledge2) XXX with the same maturityA) the coupon bond has the greater effective maturity.B) the discount bond has the greater effective maturity.C) XXX.D) XXX.XXX:BThinking3) XXX increasesA) XXX.B) when interest rates increase.C) XXX.D) XXX.XXX:AThinking4) All else equal, when interest rates ________, the duration of a coupon bond ________.A) rise; fallsB) rise; increasesC) falls; fallsD) falls; does not changeXXX:AThinking5) All else equal, the ________ the coupon rate on a bond, the ________ XXX) higher; longerB) higher; shorterC) lower; shorterD) greater; longerXXX:BThinking6) If a financial institution has 50% of its portfolio in a bond with a five-year duration and 50%of its portfolio in a bond with a seven-year duration, what is the duration of the portfolio?A) 12 yearsB) 7 yearsC) 6 yearsD) 5 yearsAnswer:CThinking7) An asset's interest rate risk ________ as the duration of the asset ________.A) increases; decreasesB) decreases; decreasesC) decreases; increasesD) remains constant; increasesXXX:B。

Economics of Money, Banking, and Financial Markets, 11e, Global Edition (Mishkin) Chapter 2 An Overview of the Financial System2.1 Function of Financial Markets1) Every financial market has the following characteristic.A) It determines the level of interest rates.B) It allows common stock to be traded.C) It allows loans to be made.D) It channels funds from lenders-savers to borrowers-spenders.Answer: DAACSB: Reflective Thinking2) Financial markets have the basic function ofA) getting people with funds to lend together with 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) providing a risk-free repository of spending power.Answer: AAACSB: Reflective Thinking3) Financial markets improve economic welfare becauseA) they channel funds from investors to savers.B) they allow consumers to time their purchase better.C) they weed out inefficient firms.D) they eliminate the need for indirect finance.Answer: BAACSB: Reflective Thinking4) Well-functioning financial marketsA) cause inflation.B) eliminate the need for indirect finance.C) cause financial crises.D) allow the economy to operate more efficiently.Answer: DAACSB: Reflective Thinking5) A breakdown of financial markets can result inA) financial stability.B) rapid economic growth.C) political instability.D) stable prices.Answer: CAACSB: Reflective Thinking6) The principal lender-savers areA) governments.B) businesses.C) households.D) foreigners.Answer: CAACSB: Application of Knowledge7) Which of the following can be described as direct finance?A) You take out a mortgage from your local bank.B) You borrow $2500 from a friend.C) You buy shares of common stock in the secondary market.D) You buy shares in a mutual fund.Answer: BAACSB: Analytical Thinking8) Assume that you borrow $2000 at 10% annual interest to finance a new business project. For this loan to be profitable, the minimum amount this project must generate in annual earnings isA) $400.B) $201.C) $200.D) $199.Answer: BAACSB: Analytical Thinking9) You can borrow $5000 to finance a new business venture. This new venture will generate annual earnings of $251. The maximum interest rate that you would pay on the borrowed funds and still increase your income isA) 25%.B) 12.5%.C) 10%.D) 5%.Answer: DAACSB: Analytical Thinking10) Which of the following can be described as involving direct finance?A) A corporation issues new shares of stock.B) People buy shares in a mutual fund.C) A pension fund manager buys a short-term corporate security in the secondary market.D) An insurance company buys shares of common stock in the over-the-counter markets. Answer: AAACSB: Analytical Thinking11) Which of the following can be described as involving direct finance?A) A corporation takes out loans from a bank.B) People buy shares in a mutual fund.C) A corporation buys a short-term corporate security in a secondary market.D) People buy shares of common stock in the primary markets.Answer: DAACSB: Analytical Thinking12) Which of the following can be described as involving indirect finance?A) You make a loan to your neighbor.B) A corporation buys a share of common stock issued by another corporation in the primary market.C) You buy a U.S. Treasury bill from the U.S. Treasury at .D) You make a deposit at a bank.Answer: DAACSB: Analytical Thinking13) Which of the following can be described as involving indirect finance?A) You make a loan to your neighbor.B) You buy shares in a mutual fund.C) You buy a U.S. Treasury bill from the U.S. Treasury at Treasury .D) You purchase shares in an initial public offering by a corporation in the primary market. Answer: BAACSB: Analytical Thinking14) Securities are ________ for the person who buys them, but are ________ for the individual or firm that issues them.A) assets; liabilitiesB) liabilities; assetsC) negotiable; nonnegotiableD) nonnegotiable; negotiableAnswer: AAACSB: Reflective Thinking15) With ________ finance, borrowers obtain funds from lenders by selling them securities in the financial markets.A) activeB) determinedC) indirectD) directAnswer: DAACSB: Application of Knowledge16) With direct finance, funds are channeled through the financial market from the ________ directly to the ________.A) savers, spendersB) spenders, investorsC) borrowers, saversD) investors, saversAnswer: AAACSB: Reflective Thinking17) Distinguish between direct finance and indirect finance. Which of these is the most important source of funds for corporations in the United States?Answer: With direct finance, funds flow directly from the lender/saver to the borrower. With indirect finance, funds flow from the lender/saver to a financial intermediary who then channels the funds to the borrower/investor. Financial intermediaries (indirect finance) are the major source of funds for corporations in the U.S.AACSB: Reflective Thinking2.2 Structure of Financial Markets1) Which of the following statements about the characteristics of debt and equity is FALSE?A) They can both be long-term financial instruments.B) They can both be short-term financial instruments.C) They both involve a claim on the issuer's income.D) They both enable a corporation to raise funds.Answer: BAACSB: Reflective Thinking2) Which of the following statements about the characteristics of debt and equities is TRUE?A) They can both be long-term financial instruments.B) Bond holders are residual claimants.C) The income from bonds is typically more variable than that from equities.D) Bonds pay dividends.Answer: AAACSB: Reflective Thinking3) Which of the following statements about financial markets and securities is TRUE?A) A bond is a long-term security that promises to make periodic payments called dividends to the firm's residual claimants.B) A debt instrument is intermediate term if its maturity is less than one year.C) A debt instrument is intermediate term if its maturity is ten years or longer.D) The maturity of a debt instrument is the number of years (term) to that instrument's expiration date.Answer: DAACSB: Reflective Thinking4) Which of the following is an example of an intermediate-term debt?A) a fifteen-year mortgageB) a sixty-month car loanC) a six-month loan from a finance companyD) a thirty-year U.S. Treasury bondAnswer: BAACSB: Analytical Thinking5) If the maturity of a debt instrument is less than one year, the debt is calledA) short-term.B) intermediate-term.C) long-term.D) prima-term.Answer: AAACSB: Application of Knowledge6) Long-term debt has a maturity that isA) between one and ten years.B) less than a year.C) between five and ten years.D) ten years or longer.Answer: DAACSB: Application of Knowledge7) When I purchase ________, I own a portion of a firm and have the right to vote on issues important to the firm and to elect its directors.A) bondsB) billsC) notesD) stockAnswer: DAACSB: Application of Knowledge8) Equity holders are a corporation's ________. That means the corporation must pay all of its debt holders before it pays its equity holders.A) debtorsB) brokersC) residual claimantsD) underwritersAnswer: CAACSB: Reflective Thinking9) Which of the following benefits directly from any increase in the corporation's profitability?A) a bond holderB) a commercial paper holderC) a shareholderD) a T-bill holderAnswer: CAACSB: Reflective Thinking10) A financial market in which previously issued securities can be resold is called a ________ market.A) primaryB) secondaryC) tertiaryD) used securitiesAnswer: BAACSB: Application of Knowledge11) An important financial institution that assists in the initial sale of securities in the primary market is theA) investment bank.B) commercial bank.C) stock exchange.D) brokerage house.Answer: AAACSB: Application of Knowledge12) When an investment bank ________ securities, it guarantees a price for a corporation's securities and then sells them to the public.A) underwritesB) undertakesC) overwritesD) overtakesAnswer: AAACSB: Application of Knowledge13) Which of the following is NOT a secondary market?A) foreign exchange marketB) futures marketC) options marketD) IPO marketAnswer: DAACSB: Reflective Thinking14) ________ work in the secondary markets matching buyers with sellers of securities.A) DealersB) UnderwritersC) BrokersD) ClaimantsAnswer: CAACSB: Application of Knowledge15) A corporation acquires new funds only when its securities are sold in theA) primary market by an investment bank.B) primary market by a stock exchange broker.C) secondary market by a securities dealer.D) secondary market by a commercial bank.Answer: AAACSB: Reflective Thinking16) A corporation acquires new funds only when its securities are sold in theA) secondary market by an investment bank.B) primary market by an investment bank.C) secondary market by a stock exchange broker.D) secondary market by a commercial bank.Answer: BAACSB: Reflective Thinking17) An important function of secondary markets is toA) make it easier to sell financial instruments to raise funds.B) raise funds for corporations through the sale of securities.C) make it easier for governments to raise taxes.D) create a market for newly constructed houses.Answer: AAACSB: Reflective Thinking18) Secondary markets make financial instruments moreA) solid.B) vapid.C) liquid.D) risky.Answer: CAACSB: Reflective Thinking19) A liquid asset isA) an asset that can easily and quickly be sold to raise cash.B) a share of an ocean resort.C) difficult to resell.D) always sold in an over-the-counter market.Answer: AAACSB: Reflective Thinking20) The higher a security's price in the secondary market the ________ funds a firm can raise byselling securities in the ________ market.A) more; primaryB) more; secondaryC) less; primaryD) less; secondaryAnswer: AAACSB: Reflective Thinking21) When secondary market buyers and sellers of securities meet in one central location to conduct trades the market is called a(n)A) exchange.B) over-the-counter market.C) common market.D) barter market.Answer: AAACSB: Application of Knowledge22) In a(n) ________ market, dealers in different locations buy and sell securities to anyone who comes to them and is willing to accept their prices.A) exchangeB) over-the-counterC) commonD) barterAnswer: BAACSB: Application of Knowledge23) Forty or so dealers establish a "market" in these securities by standing ready to buy and sell them.A) secondary stocksB) surplus stocksC) U.S. government bondsD) common stocksAnswer: CAACSB: Application of Knowledge24) Which of the following statements about financial markets and securities is TRUE?A) Many common stocks are traded over-the-counter, although the largest corporations usually have their shares traded at organized stock exchanges such as the New York Stock Exchange. B) As a corporation gets a share of the broker's commission, a corporation acquires new funds whenever its securities are sold.C) Capital market securities are usually more widely traded than shorter-term securities and so tend to be more liquid.D) Prices of capital market securities are usually more stable than prices of money market securities, and so are often used to hold temporary surplus funds of corporations.Answer: AAACSB: Reflective Thinking25) A financial market in which only short-term debt instruments are traded is called the________ market.A) bondB) moneyC) capitalD) stockAnswer: BAACSB: Analytical Thinking26) Equity instruments are traded in the ________ market.A) moneyB) bondC) capitalD) commoditiesAnswer: CAACSB: Analytical Thinking27) Because these securities are more liquid and generally have smaller price fluctuations, corporations and banks use the ________ securities to earn interest on temporary surplus funds.A) money marketB) capital marketC) bond marketD) stock marketAnswer: AAACSB: Reflective Thinking28) Corporations receive funds when their stock is sold in the primary market. Why do corporations pay attention to what is happening to their stock in the secondary market? Answer: The existence of the secondary market makes their stock more liquid and the price in the secondary market sets the price that the corporation would receive if they choose to sell more stock in the primary market.AACSB: Reflective Thinking29) Describe the two methods of organizing a secondary market.Answer: A secondary market can be organized as an exchange where buyers and sellers meet in one central location to conduct trades. An example of an exchange is the New York Stock Exchange. A secondary market can also be organized as an over-the-counter market. In this type of market, dealers in different locations buy and sell securities to anyone who comes to them and is willing to accept their prices. An example of an over-the-counter market is the federal funds market.AACSB: Reflective Thinking2.3 Financial Market Instruments1) Prices of money market instruments undergo the least price fluctuations because ofA) the short terms to maturity for the securities.B) the heavy regulations in the industry.C) the price ceiling imposed by government regulators.D) the lack of competition in the market.Answer: AAACSB: Reflective Thinking2) U.S. Treasury bills pay no interest but are sold at a ________. That is, you will pay a lower purchase price than the amount you receive at maturity.A) premiumB) collateralC) defaultD) discountAnswer: DAACSB: Analytical Thinking3) U.S. Treasury bills are considered the safest of all money market instruments because there isa low probability ofA) defeat.B) default.C) desertion.D) demarcation.Answer: BAACSB: Analytical Thinking4) A debt instrument sold by a bank to its depositors that pays annual interest of a given amount and at maturity pays back the original purchase price is calledA) commercial paper.B) a certificate of deposit.C) a municipal bond.D) federal funds.Answer: BAACSB: Analytical Thinking5) A short-term debt instrument issued by well-known corporations is calledA) commercial paper.B) corporate bonds.C) municipal bonds.D) commercial mortgages.Answer: AAACSB: Analytical Thinking6) ________ are short-term loans in which Treasury bills serve as collateral.A) Repurchase agreementsB) Negotiable certificates of depositC) Federal fundsD) U.S. government agency securitiesAnswer: AAACSB: Analytical Thinking7) Collateral is ________ the lender receives if the borrower does not pay back the loan.A) a liabilityB) an assetC) a presentD) an offeringAnswer: BAACSB: Analytical Thinking8) Federal funds areA) funds raised by the federal government in the bond market.B) loans made by the Federal Reserve System to banks.C) loans made by banks to the Federal Reserve System.D) loans made by banks to each other.Answer: DAACSB: Analytical Thinking9) An important source of short-term funds for commercial banks are ________ which can be resold on the secondary market.A) negotiable CDsB) commercial paperC) mortgage-backed securitiesD) municipal bondsAnswer: AAACSB: Application of Knowledge。

第15章货币政策工具一、概念题1．防御性公开市场操作（defensive open market operations）答：防御性公开市场操作是指中央银行为了抵消那些非中央银行所能控制的因素对存款货币机构准备金水平和货币供给量的影响、维系既定的货币政策而进行的公开市场操作。

防御性公开市场操作通常是通过回购协议和逆回购协议两种方式进行的。

在此目标下，中央银行通常采用短期性的回购协议和逆回购协议进行操作，以及时而准确地抵消那些非中央银行所能控制的因素对存款货币机构准备水平和货币供给量的影响，确保既定货币政策的实现。

回购协议政策的意义在于为社会提供短期资金，满足临时资金需求，防止政府债券不规则的波动，稳定金融市场。

逆回购协议的政策意义在于通过中央银行的逆回购协议操作，吸收因外部因素所造成的暂时过剩的准备金，维系货币供给的稳定。

2．贴现窗口（discount window）答：贴现窗口指中央银行开办的再贴现业务和办理再贴现业务的设施及机构。

美联储可以通过贴现窗口向私人金融机构（银行或贷款协会）发放贷款。

这种贴现操作会导致高能货币的供给量变化。

中央银行作为最后贷款人，通过贴现窗口向商业银行提供资金，但中央银行并非一定要提供资金，因此商业银行不可将通过贴现窗口融资视为一项权利。

3．能动性公开市场操作（dynamic open market operation）答：能动性公开市场操作指中央银行为改变存款货币机构的准备金总水平和基础货币水平，而主动进行的公开市场操作。

当中央银行货币政策方向或力度发生转变时，中央银行通常是采取主动性公开市场来实现其转变。

在此目标下，中央银行的公开市场操作通常是连续性、同向性地买进或卖出有价证券，增加或减少存款货币机构的储备总量和货币供给量，达到实现货币扩张或紧缩的政策目标。

4．联邦基金利率（federal funds rate）答：联邦基金利率是指美国同业拆借市场的利率，其最主要的是隔夜拆借利率。

金融市场学双语题库及答案（第三章）米什金金融市场与机构Financial Markets and Institutions, 8e (Mishkin)Chapter 3 What Do Interest Rates Mean and What Is Their Role in Valuation?3.1 Multiple Choice1) A loan that requires the borrower to make the same payment every period until the maturity date is called aA) simple loan.B) fixed-payment loan.C) discount loan.D) same-payment loan.E) none of the above.Answer: BTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition2) A coupon bond pays the owner of the bondA) the same amount every month until the maturity date.B) a fixed interest payment every period, plus the face value of the bond 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.Answer: BTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition3) A bond's future payments are called itsA) cash flows.B) maturity values.C) discounted present values.D) yields to maturity.Answer: ATopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition4) A credit market instrument that pays the owner the face value of the security at the maturity date and nothing prior to then is called aA) simple loan.B) fixed-payment loan.C) coupon bond.D) discount bond.Answer: DTopic: Chapter 3.1 Measuring Interest Rates Question Status: Previous Edition5) (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.Answer: CTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition6) 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.Answer: DTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition7) Which of the following are generally true of all bonds?A) The longer a bond's maturity, the lower is the rate of return that occurs as a result of the increase in the interest rate.B) Even though a bond has a substantial initial interest rate, its return can turn out to be negative if interest rates rise.C) Prices and returns for long-term bonds are more volatile than those forshorter-term bonds.D) All of the above are true.E) Only A and B of the above are true.Answer: DTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition8) (I) A discount bond requires the borrower to repay the principal at the maturity date plus an interest payment.(II) A coupon bond pays the lender a fixed interest payment every year until the maturity date, when a specified final amount (face or par value) is repaid.A) (I) is true, (II) false.B) (I) is false, (II) true.C) Both are true.D) Both are false.Answer: BTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition9) If a $5,000 coupon bond has a coupon rate of 13 percent, then the coupon payment every year isA) $650.B) $1,300.C) $130.D) $13.E) None of the above.Answer: ATopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition10) An $8,000 coupon bond with a $400 annual coupon payment has a coupon rate ofA) 5 percent.B) 8 percent.C) 10 percent.D) 40 percent.Answer: ATopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition11) The concept of ________ is based on the notion that a dollar paid to you in the future is less valuable to you than a dollar today.A) present valueB) future valueC) interestD) deflationAnswer: ATopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition12) Dollars received in the future are worth ________ than dollars received today. The process of calculating what dollars received in the future are worth today is called ________.A) more; discountingB) less; discountingC) more; inflatingD) less; inflatingAnswer: BTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition13) The process of calculating what dollars received in the future are worth today is calledA) calculating the yield to maturity.B) discounting the future.C) compounding the future.D) compounding the present.Answer: BTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition14) With an interest rate of 5 percent, the present value of $100 received one year from now is approximatelyA) $100.B) $105.C) $95.D) $90.Answer: CTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition15) With an interest rate of 10 percent, the present value ofa security that pays $1,100 next year and $1,460 four years from now is approximatelyA) $1,000.B) $2,000.C) $2,560.D) $3,000.Answer: BTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition16) With an interest rate of 8 percent, the present value of $100 received one year from now is approximatelyA) $93.B) $96.C) $100.D) $108.Answer: ATopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition17) With an interest rate of 6 percent, the present value of $100 received one year from now is approximatelyA) $106.B) $100.C) $94.D) $92.Answer: CTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition18) The interest rate that equates the present value of the cash flow received from a debt instrument with its market pricetoday is theA) simple interest rate.B) discount rate.C) yield to maturity.D) real interest rate.Answer: CTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition19) The interest rate that financial economists consider to be the most accurate measure is theA) current yield.B) yield to maturity.C) yield on a discount basis.D) coupon rate.Answer: BTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition20) Financial economists consider the ________ to be the most accurate measure of interest rates.A) simple interest rateB) discount rateC) yield to maturityD) real interest rateAnswer: CTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition21) For a simple loan, the simple interest rate equals theA) real interest rate.B) nominal interest rate.C) current yield.D) yield to maturity.Answer: DTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition22) For simple loans, the simple interest rate is ________ the yield to maturity.A) greater thanB) less thanC) equal toD) not comparable toAnswer: CTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition23) The yield to maturity of a one-year, simple loan of $500 that requires an interest payment of $40 isA) 5 percent.B) 8 percent.C) 12 percent.D) 12.5 percent.Answer: BTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition24) The yield to maturity of a one-year, simple loan of $400 that requires an interest payment of $50 isA) 5 percent.B) 8 percent.C) 12 percent.D) 12.5 percent.Answer: DTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition25) A $10,000, 8 percent coupon bond that sells for $10,000 has a yield to maturity ofA) 8 percent.B) 10 percent.C) 12 percent.D) 14 percent.Answer: ATopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition26) A $10,000, 8 percent coupon bond that sells for $10,100 has a yield to maturity ________.A) equal to 8 percentB) greater than 8 percentC) less than 8 perfectD) that cannot be calculatedAnswer: CTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: New Question27) 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 $1,100Answer: CTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition28) 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 15 percent coupon bond selling for $1,000D) A 15 percent coupon bond selling for $900Answer: DTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition29) Which of the following $1,000 face value securities has the lowest yield to maturity?A) A 5 percent coupon bond selling for $1,000B) A 7 percent coupon bond selling for $1,100C) A 15 percent coupon bond selling for $1,000D) A 15 percent coupon bond selling for $900Answer: BTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: New Question30) Which of the following are true for a coupon bond?A) When the coupon bond is priced at its face value, the yield to maturity equals the coupon rate.B) The price of a coupon bond and the yield to maturity are negatively related.C) The yield to maturity is greater than the coupon rate when the bond price is below the par value.D) All of the above are true.E) Only A and B of the above are true.Answer: DTopic: Chapter 3.1 Measuring Interest Rates Question Status: Previous Edition31) Which of the following are true for a coupon bond?A) When the coupon bond is priced at its face value, the yieldto maturity equals the coupon rate.B) The price of a coupon bond and the yield to maturity are negatively related.C) The yield to maturity is greater than the coupon rate when the bond price is above the par value.D) All of the above are true.E) Only A and B of the above are true.Answer: ETopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition32) Which of the following are true for a coupon bond?A) When the coupon bond is priced at its face value, the yield to maturity equals the coupon rate.B) The price of a coupon bond and the yield to maturity are positively related.C) The yield to maturity is greater than the coupon rate when the bond price is above the par value.D) All of the above are true.E) Only A and B of the above are true.Answer: ATopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition33) A consol bond is a bond thatA) pays interest annually and its face value at maturity.B) pays interest in perpetuity and never matures.C) pays no interest but pays its face value at maturity.D) rises in value as its yield to maturity rises.Answer: BTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition34) The yield to maturity on a consol bond that pays $100 yearly and sells for $500 isA) 5 percent.B) 10 percent.C) 12.5 percent.D) 20 percent.E) 25 percent.Answer: DTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition35) The yield to maturity on a consol bond that pays $200 yearly and sells for $1000 isA) 5 percent.B) 10 percent.C) 20 percent.D) 25 percent.Answer: CTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition36) A frequently used approximation for the yield to maturity on a long-term bond is theA) coupon rate.B) current yield.C) cash flow interest rate.D) real interest rate.Answer: BTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition37) The current yield on a coupon bond is the bond's ________ divided by its________.A) annual coupon payment; priceB) annual coupon payment; face valueC) annual return; priceD) annual return; face valueAnswer: ATopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition38) When a bond's price falls, its yield to maturity ________ and its current yield________.A) falls; fallsB) rises; risesC) falls; risesD) rises; fallsAnswer: BTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition39) The yield to maturity for a one-year discount bond equalsA) the increase in price over the year, divided by the initial price.B) the increase in price over the year, divided by the face value.C) the increase in price over the year, divided by the interest rate.D) none of the above.Answer: ATopic: Chapter 3.1 Measuring Interest Rates Question Status: Previous Edition40) If a $10,000 face value discount bond maturing in oneyear is selling for $8,000, then its yield to maturity isA) 10 percent.B) 20 percent.C) 25 percent.D) 40 percent.Answer: CTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition41) If a $10,000 face value discount bond maturing in one year is selling for $9,000, then its yield to maturity is approximatelyA) 9 percent.B) 10 percent.C) 11 percent.D) 12 percent.Answer: CTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition42) If a $10,000 face value discount bond maturing in one year is selling for $5,000, then its yield to maturity isA) 5 percent.B) 10 percent.C) 50 percent.D) 100 percent.Answer: DTopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition43) If a $5,000 face value discount bond maturing in one year is selling for $5,000, then its yield to maturity isA) 0 percent.B) 5 percent.C) 10 percent.D) 20 percent.Answer: ATopic: Chapter 3.1 Measuring Interest RatesQuestion Status: Previous Edition44) The Fisher equation states thatA) 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.Answer: DTopic: Chapter 3.2 Distinction Between Real and Nominal Interest Rates Question Status: Previous Edition45) If you expect the inflation rate to be 15 percent next year and a one-year bond hasa yield to maturity of 7 percent, then the real interest rate on this bond isA) 7 percent.B) 22 percent.C) -15 percent.D) -8 percent.E) none of the above.Answer: DTopic: Chapter 3.2 Distinction Between Real and Nominal Interest Rates Question Status: Previous Edition46) 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 isA) -12 percent.B) -2 percent.C) 2 percent.D) 12 percent.Answer: CTopic: Chapter 3.2 Distinction Between Real and Nominal Interest Rates Question Status: Previous Edition47) The nominal interest rate minus the expected rate of inflationA) defines the real interest rate.B) is a better measure of the incentives to borrow and lend than the nominal interest rate.C) is a more accurate indicator of the tightness of credit market conditions than the nominal interest rate.D) all of the above.E) only A and B of the above.Answer: DTopic: Chapter 3.2 Distinction Between Real and Nominal Interest RatesQuestion Status: Previous Edition48) The nominal interest rate minus the expected rate of inflationA) defines the real interest rate.B) is a less accurate measure of the incentives to borrow and lend than is the nominal interest rate.C) is a less accurate indicator of the tightness of credit market conditions than is the nominal interest rate.D) defines the discount rate.Answer: ATopic: Chapter 3.2 Distinction Between Real and Nominal Interest Rates Question Status: Previous Edition49) In which of the following situations would you prefer to be making a loan?A) The interest rate is 9 percent and the expected inflation rate is 7 percent.B) The interest rate is 4 percent and the expected inflation rate is 1 percent.C) The interest rate is 13 percent and the expected inflation rate is 15 percent.D) The interest rate is 25 percent and the expected inflation rate is 50 percent. Answer: BTopic: Chapter 3.2 Distinction Between Real and Nominal Interest Rates Question Status: Previous Edition50) In which of the following situations would you prefer to be borrowing?A) The interest rate is 9 percent and the expected inflation rate is 7 percent.B) The interest rate is 4 percent and the expected inflation rate is 1 percent.C) The interest rate is 13 percent and the expected inflation rate is 15 percent.D) The interest rate is 25 percent and the expected inflation rate is 50 percent. Answer: DTopic: Chapter 3.2 Distinction Between Real and Nominal Interest Rates Question Status: Previous Edition51) What is the return on a 5 percent coupon bond that initially sells for $1,000 and sells for $1,200 one year later?A) 5 percentB) 10 percentC) -5 percentD) 25 percentE) None of the aboveAnswer: DTopic: Chapter 3.3 Distinction Between Interest Rates and ReturnsQuestion Status: Previous Edition52) 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 percentB) 10 percentC) -5 percentD) -10 percentE) None of the aboveAnswer: CTopic: Chapter 3.3 Distinction Between Interest Rates and ReturnsQuestion Status: Previous Edition53) The return on a 5 percent coupon bond that initially sells for $1,000 and sells for $1,100 one year later isA) 5 percent.B) 10 percent.C) 14 percent.D) 15 percent.Answer: DTopic: Chapter 3.3 Distinction Between Interest Rates and ReturnsQuestion Status: Previous Edition54) The return on a 10 percent coupon bond that initially sells for $1,000 and sells for $900 one year later isA) -10 percent.B) -5 percent.C) 0 percent.D) 5 percent.Answer: CTopic: Chapter 3.3 Distinction Between Interest Rates and ReturnsQuestion Status: Previous Edition55) Which of the following are generally true of all bonds?A) The only bond whose return equals the initial yield to maturity is one whose time to maturity is the same as the holding period.B) A rise in interest rates is associated with a fall in bond prices, resulting in capital losses on bonds whose term to maturities are longer than the holding period.C) The longer a bond's maturity, the greater is the price change associated with a given interest rate change.D) All of the above are true.E) Only A and B of the above are true.Answer: DTopic: Chapter 3.3 Distinction Between Interest Rates and ReturnsQuestion Status: Previous Edition56) Which of the following are true concerning the distinction between interest rates and return?A) The rate of return on a bond will not necessarily equal the interest rate on that bond.B) The return can be expressed as the sum of the current yieldand the rate of capital gains.C) The rate of return will be greater than the interest rate when the price of the bond falls between time t and time t + 1.D) All of the above are true.E) Only A and B of the above are true.Answer: ETopic: Chapter 3.3 Distinction Between Interest Rates and ReturnsQuestion Status: Previous Edition57) If the interest rates on all bonds rise from 5 to 6 percent over the course of the year, which bond would you prefer to have been holding?A) A bond with one year to maturityB) A bond with five years to maturityC) A bond with ten years to maturityD) A bond with twenty years to maturityAnswer: ATopic: Chapter 3.3 Distinction Between Interest Rates and ReturnsQuestion Status: Previous Edition58) Suppose you are holding a 5 percent coupon bond maturing in one year with a yield to maturity of 15 percent. If the interest rate on one-year bonds rises from 15 percent to 20 percent over the course of the year, what is the yearly return on the bond you are holding?A) 5 percentB) 10 percentC) 15 percentD) 20 percentAnswer: CTopic: Chapter 3.3 Distinction Between Interest Rates and ReturnsQuestion Status: Previous Edition59) (I) Prices of longer-maturity bonds respond more dramatically to changes in interest rates.(II) Prices and returns for long-term bonds are less volatile than those for short-term bonds.A) (I) is true, (II) false.B) (I) is false, (II) true.C) Both are true.D) Both are false.Answer: A。

Financial Markets and Institutions, 8e (Mishkin)Chapter 14 The Mortgage Markets14.1 Multiple Choice1) Which of the following are important ways in which mortgage markets differ from the stock and bond markets?A) The usual borrowers in the capital markets are government entities and businesses, whereas the usual borrowers in the mortgage markets are individuals.B) Most mortgages are secured by real estate, whereas the majority of capital market borrowing is unsecured.C) Because mortgages are made for different amounts and different maturities, developing a secondary market has been more difficult.D) All of the above are important differences.E) Only A and B of the above are important differences.Answer: DTopic: Chapter 14.1 What Are Mortgages?Question Status: Previous Edition2) Which of the following are important ways in which mortgage markets differ from stock and bond markets?A) The usual borrowers in capital markets are government entities, whereas the usual borrowers in mortgage markets are small businesses.B) The usual borrowers in capital markets are government entities and large businesses, whereas the usual borrowers in mortgage markets are small businesses.C) The usual borrowers in capital markets are government entities and large businesses, whereas the usual borrowers in mortgage markets are small businesses and individuals.D) The usual borrowers in capital markets are businesses and government entities, whereas the usual borrowers in mortgage markets are individuals.Answer: DTopic: Chapter 14.1 What Are Mortgages?Question Status: Previous Edition3) Which of the following are true of mortgages?A) A mortgage is a long-term loan secured by real estate.B) A borrower pays off a mortgage in a combination of principal and interest payments that result in full payment of the debt by maturity.C) Over 80 percent of mortgage loans finance residential home purchases.D) All of the above are true of mortgages.E) Only A and B of the above are true of mortgages.Answer: DTopic: Chapter 14.1 What Are Mortgages?Question Status: Previous Edition4) Which of the following are true of mortgages?A) A mortgage is a long-term loan secured by real estate.B) Borrowers pay off mortgages over time in some combination of principal and interest payments that result in full payment of the debt by maturity.C) Less than 65 percent of mortgage loans finance residential home purchases.D) All of the above are true of mortgages.E) Only A and B of the above are true of mortgages.Answer: ETopic: Chapter 14.1 What Are Mortgages?Question Status: Previous Edition5) Which of the following are true of mortgage interest rates?A) Interest rates on mortgage loans are determined by three factors: current long-term market rates, the term of the mortgage, and the number of discount points paid.B) Mortgage interest rates tend to track along with Treasury bond rates.C) The interest rate on 15-year mortgages is lower than the rate on 30-year mortgages, all else the same.D) All of the above are true.E) Only A and B of the above are true.Answer: DTopic: Chapter 14.2 Characteristics of the Residential MortgageQuestion Status: Previous Edition6) Which of the following are true of mortgages?A) More than 80 percent of mortgage loans finance residential home purchases.B) The National Banking Act of 1863 rewarded banks that increased mortgage lending.C) Most mortgages during the 1920s and 1930s were balloon loans.D) All of the above are true.E) Only A and C of the above are true.Answer: ETopic: Chapter 14.1 What Are Mortgages?Question Status: Previous Edition7) Which of the following is true of mortgage interest rates?A) Longer-term mortgages have lower interest rates than shorter-term mortgages.B) Mortgage rates are lower than Treasury bond rates because of the tax deductibility of mortgage interest rates.C) In exchange for points, lenders reduce interest rates on mortgage loans.D) All of the above are true.E) Only A and B of the above are true.Answer: CTopic: Chapter 14.2 Characteristics of the Residential MortgageQuestion Status: Previous Edition8) Typically, discount points should not be paid if the borrower will pay off the loan in ________ years or less.A) 5B) 10C) 15D) 20Answer: ATopic: Chapter 14.2 Characteristics of the Residential MortgageQuestion Status: Previous Edition9) Which of the following is true of mortgage interest rates?A) Longer-term mortgages have higher interest rates than shorter-term mortgages.B) In exchange for points, lenders reduce interest rates on mortgage loans.C) Mortgage rates are lower than Treasury bond rates because of the tax deductibility of mortgage interest payments.D) All of the above are true.E) Only A and B of the above are true.Answer: ETopic: Chapter 14.2 Characteristics of the Residential MortgageQuestion Status: Previous Edition10) Which of the following reduces moral hazard for the mortgage borrower?A) CollateralB) Down paymentsC) Private mortgage insuranceD) Borrower qualificationsAnswer: BTopic: Chapter 14.2 Characteristics of the Residential MortgageQuestion Status: Previous Edition11) Which of the following protects the mortgage lender's right to sell property if the underlying loan defaults?A) A lienB) A down paymentC) Private mortgage insuranceD) Borrower qualificationE) AmortizationAnswer: ATopic: Chapter 14.2 Characteristics of the Residential MortgageQuestion Status: Previous Edition12) Which of the following is true of mortgage interest rates?A) Mortgage rates are closely tied to Treasury bond rates, but mortgage rates tend to stay below Treasury rates because mortgages are secured with collateral.B) Longer-term mortgages have higher interest rates than shorter-term mortgages.C) Interest rates are higher on mortgage loans on which lenders charge points.D) All of the above are true.E) Only A and B of the above are true.Answer: BTopic: Chapter 14.2 Characteristics of the Residential MortgageQuestion Status: Previous Edition13) During the early years of an amortizing mortgage loan, the lender appliesA) most of the monthly payment to the outstanding principal balance.B) all of the monthly payment to the outstanding principal balance.C) most of the monthly payment to interest on the loan.D) all of the monthly payment to interest on the loan.E) the monthly payment equally to interest on the loan and the outstanding principal balance.Answer: CTopic: Chapter 14.2 Characteristics of the Residential MortgageQuestion Status: Previous Edition14) During the last years of an amortizing mortgage loan, the lender appliesA) most of the monthly payment to the outstanding principal balance.B) all of the monthly payment to the outstanding principal balance.C) most of the monthly payment to interest on the loan.D) all of the monthly payment to interest on the loan.E) the monthly payment equally to interest on the loan and the outstanding principal balance.Answer: ATopic: Chapter 14.2 Characteristics of the Residential MortgageQuestion Status: Previous Edition15) During the last years of a balloon mortgage loan, the lender appliesA) most of the monthly payment to the outstanding principal balance.B) all of the monthly payment to the outstanding principal balance.C) most of the monthly payment to interest on the loan.D) all of the monthly payment to interest on the loan.E) the monthly payment equally to interest on the loan and the outstanding principal balance.Answer: DTopic: Chapter 14.2 Characteristics of the Residential MortgageQuestion Status: Previous Edition16) During the early years of a balloon mortgage loan, the lender appliesA) most of the monthly payment to the outstanding principal balance.B) all of the monthly payment to the outstanding principal balance.C) most of the monthly payment to interest on the loan.D) all of the monthly payment to interest on the loan.E) the monthly payment equally to interest on the loan and the outstanding principal balance.Answer: DTopic: Chapter 14.2 Characteristics of the Residential MortgageQuestion Status: Previous Edition17) A borrower who qualifies for an FHA or VA loan enjoys the advantage thatA) the mortgage payment is much lower.B) only a very low or zero down payment is required.C) the cost of private mortgage insurance is lower.D) the government holds the lien on the property.Answer: BTopic: Chapter 14.3 Types of MortgagesQuestion Status: Previous Edition18) (I) Conventional mortgages are originated by private lending institutions, and FHA or VA loans are originated by the government. (II) Conventional mortgages are insured by private companies, and FHA or VA loans are insured by the government.A) (I) is true, (II) false.B) (I) is false, (II) true.C) Both are true.D) Both are false.Answer: BTopic: Chapter 14.3 Types of MortgagesQuestion Status: Previous Edition19) Borrowers tend to prefer ________ to ________, whereas lenders prefer ________.A) fixed-rate loans; ARMs; fixed-rate loansB) ARMs; fixed-rate loans; fixed-rate loansC) fixed-rate loans; ARMs; ARMsD) ARMs; fixed-rate loans; ARMsAnswer: CTopic: Chapter 14.3 Types of MortgagesQuestion Status: Previous Edition20) (I) ARMs offer lower initial rates and the rate may fall during the life of the loan. (II) Conventional mortgages do not allow a borrower to take advantage of falling interest rates.A) (I) is true, (II) is false.B) (I) is false, (II) is true.C) Both are true.D) Both are false.Answer: ATopic: Chapter 14.3 Types of MortgagesQuestion Status: Previous Edition21) Growing-equity mortgages (GEMs)A) help the borrower pay off the loan in a shorter time.B) have such low payments in the first few years that the principal balance increases.C) offer borrowers payments that are initially lower than the payments on aconventional mortgage.D) do all of the above.E) do only A and B of the above.Answer: ATopic: Chapter 14.3 Types of MortgagesQuestion Status: Previous Edition22) A borrower with a 30-year loan can create a GEM byA) simply increasing the monthly payments beyond what is required and designating that the excess be applied entirely to the principal.B) converting his ARM into a conventional mortgage.C) converting his conventional mortgage into an ARM.D) converting his conventional mortgage into a GPM.Answer: ATopic: Chapter 14.3 Types of MortgagesQuestion Status: Previous Edition23) Which of the following are useful for home buyers who expect their income to rise in the future?A) GPMsB) RAMsC) GEMsD) Only A and B are useful.E) Only A and C are useful.Answer: ETopic: Chapter 14.3 Types of MortgagesQuestion Status: Previous Edition24) Which of the following are useful for home buyers who expect their income to fall in the future?A) GPMsB) RAMsC) GEMsD) Only A and B are useful.E) Only A and C are useful.Answer: BTopic: Chapter 14.3 Types of MortgagesQuestion Status: Previous Edition25) Retired people can live on the equity they have in their homes by using aA) GEM.B) GPM.C) SAM.D) RAM.Answer: DTopic: Chapter 14.3 Types of MortgagesQuestion Status: Previous Edition26) Second mortgages serve the following purposes:A) they give borrowers a way to use the equity they have in their homes as security for another loan.B) they allow borrowers to get a tax deduction on loans secured by their primary residence or vacation home.C) they allow borrowers to convert their conventional mortgages into GEMs.D) all of the above.E) only A and B of the above.Answer: ETopic: Chapter 14.3 Types of MortgagesQuestion Status: Previous Edition27) Which of the following is a disadvantage of a second mortgage compared to credit card debt?A) The loans are secured by the borrower's home.B) The borrower gives up the tax deduction on the primary mortgage.C) The borrower must pay points to get a second mortgage loan.D) The borrower will find it more difficult to qualify for a second mortgage loan.Answer: ATopic: Chapter 14.3 Types of MortgagesQuestion Status: Previous Edition28) The share of the mortgage market held by savings and loans isA) over 50 percent.B) approximately 40 percent.C) approximately 20 percent.D) less than 5 percent.Answer: DTopic: Chapter 14.4 Mortgage-Lending InstitutionsQuestion Status: Updated from Previous Edition29) The share of the mortgage market held by commercial banks is approximatelyA) 50 percent.B) 30 percent.C) 15 percent.D) 5 percent.Answer: BTopic: Chapter 14.4 Mortgage-Lending Institutions Question Status: Updated from Previous Edition30) A loan-servicing agent willA) package the loan for an investor.B) hold the loan in their investment portfolio.C) collect payments from the borrower.D) do both A and C of the above.E) do both B and C of the above.Answer: CTopic: Chapter 14.5 Loan ServicingQuestion Status: Previous Edition31) Distinct elements of a mortgage loan includeA) origination.B) investment.C) servicing.D) all of the above.E) only B and C of the above.Answer: DTopic: Chapter 14.6 Secondary Mortgage MarketQuestion Status: Previous Edition32) The Federal National Mortgage Association (Fannie Mae)A) was set up to buy mortgages from thrifts so that these institutions could make more loans.B) funds purchases of mortgages by selling bonds to the public.C) provides insurance for certain mortgage contracts.D) does all of the above.E) does only A and B of the above.Answer: ETopic: Chapter 14.6 Secondary Mortgage MarketQuestion Status: Previous Edition33) The Federal Housing Administration (FHA)A) was set up to buy mortgages from thrifts so that these institutions could make more loans.B) funds purchases of mortgages by selling bonds to the public.C) provides insurance for certain mortgage contracts.D) does all of the above.E) does only A and B of the above.Answer: CTopic: Chapter 14.3 Types of MortgagesQuestion Status: Previous Edition34) ________ issues participation certificates, and ________ provides federal insurance for participation certificates.A) Freddie Mac; Freddie MacB) Freddie Mac; Ginnie MaeC) Ginnie Mae; Freddie MacD) Ginnie Mae; Ginnie MaeE) Freddie Mac; no oneAnswer: ETopic: Chapter 14.8 What Is a Mortgage-Backed Security?Question Status: Previous Edition35) REMICs are most likeA) Freddie Mac pass-through securities.B) Ginnie Mae pass-through securities.C) participation certificates.D) collateralized mortgage obligations.Answer: DTopic: Chapter 14.8 What Is a Mortgage-Backed Security? Question Status: Previous Edition36) Ginnie MaeA) insures qualifying mortgages.B) insures pass-through certificates.C) insures collateralized mortgage obligations.D) does only A and B. of the above.E) does only B and C of the above.Answer: BTopic: Chapter 14.8 What Is a Mortgage-Backed Security? Question Status: Previous Edition37) Mortgage-backed securitiesA) have been growing in popularity in recent years as institutional investors look for attractive investment opportunities.B) are securities collateralized by a pool of mortgages.C) are securities collateralized by both insured and uninsured mortgages.D) are all of the above.E) are only A and B of the above.Answer: DTopic: Chapter 14.8 What Is a Mortgage-Backed Security?Question Status: Previous Edition38) The most common type of mortgage-backed security isA) the mortgage pass-through, a security that has the borrower's mortgage payments pass through the trustee before being disbursed to the investors.B) collateralized mortgage obligations, a security which reduces prepayment risk.C) the participation certificate, a security which passes the borrower's mortgage payments equally among all the owners of the certificates.D) the securitized mortgage, a security which increases the liquidity of otherwise illiquid mortgages.Answer: ATopic: Chapter 14.8 What Is a Mortgage-Backed Security?Question Status: Previous Edition39) The interest rate borrowers pay on their mortgages is determined byA) current long-term market rates.B) the term.C) the number of discount points.D) all of the above.Answer: DTopic: Chapter 14.2 Characteristics of the Residential MortgageQuestion Status: Previous Edition40) A loan for borrowers who do not qualify for loans at the usual market rate of interest because of a poor credit rating or because the loan is larger than justified by their income isA) a subprime mortgage.B) a securitized mortgage.C) an insured mortgage.D) a graduated-payment mortgage.Answer: ATopic: Chapter 14.8 What Is a Mortgage-Backed Security?Question Status: Previous Edition41) The percentage of the total loan paid back immediately when a mortgage loan is obtained, which lowers the annual interest rate on the debt, is calledA) discount points.B) loan terms.C) collateral.D) down payment.Answer: ATopic: Chapter 14.2 Characteristics of the Residential MortgageQuestion Status: Previous Edition42) Which of the following terms are found in mortgage loan contracts to protect the lender from financial loss?A) CollateralB) Down paymentC) Private mortgage insuranceD) All of the aboveAnswer: DTopic: Chapter 14.2 Characteristics of the Residential MortgageQuestion Status: Previous Edition43) What factors are used in determining a person's FICO score?A) Past payment historyB) Outstanding debtC) Length of credit historyD) All of the aboveAnswer: DTopic: Chapter 14.2 Characteristics of the Residential MortgageQuestion Status: Previous Edition44) Between 2000 and 2005, home prices increased an average of ________ per year.A) 2%B) 4%C) 8%D) 12%Answer: CTopic: Chapter 14.8 What Is a Mortgage-Backed Security?Question Status: New Question45) From 2000 to 2005, housing prices increased, on average, by over 40%. This run up in prices was caused byA) speculators.B) an increase in subprime loans, which increased demand for new and existing houses.C) both A and B.D) None of the above are correct.Answer: CTopic: Chapter 14.8 What Is a Mortgage-Backed Security?Question Status: Updated from Previous Edition14.2 True/False1) In 2012, mortgage loans to farms represented the largest proportion of mortgage lending in the U.S.Answer: FALSETopic: Chapter 14.1 What Are Mortgages?Question Status: New Question2) Down payments are designed to reduce the likelihood of default on mortgage loans.Answer: TRUETopic: Chapter 14.2 Characteristics of the Residential MortgageQuestion Status: Previous Edition3) Discount points (or simply points) are interest payments made at the beginning of a loan.Answer: TRUETopic: Chapter 14.2 Characteristics of the Residential MortgageQuestion Status: Previous Edition4) A point on a mortgage loan refers to one monthly payment of principal and interest.Answer: FALSETopic: Chapter 14.2 Characteristics of the Residential MortgageQuestion Status: Previous Edition5) Closing for a mortgage loan refers to the moment the loan is paid off.Answer: FALSETopic: Chapter 14.2 Characteristics of the Residential MortgageQuestion Status: Previous Edition6) Private mortgage insurance is a policy that guarantees to make up any discrepancy between the value of the property and the loan amount, should a default occur.Answer: TRUETopic: Chapter 14.2 Characteristics of the Residential MortgageQuestion Status: Previous Edition7) During the early years of a mortgage loan, the lender applies most of the payment to the principal on the loan.Answer: FALSETopic: Chapter 14.2 Characteristics of the Residential MortgageQuestion Status: Previous Edition8) One important advantage to a borrower who qualifies for an FHA or VA loan is the very low interest rate on the mortgage.Answer: FALSETopic: Chapter 14.3 Types of Mortgages9) Adjustable-rate mortgages generally have lower initial interest rates than fixed-rate mortgages.Answer: TRUETopic: Chapter 14.3 Types of MortgagesQuestion Status: Previous Edition10) Mortgage interest rates loosely track interest rates on three-month Treasury bills.Answer: FALSETopic: Chapter 14.3 Types of MortgagesQuestion Status: Previous Edition11) An advantage of a graduated-payment mortgage is that borrowers will qualify for a larger loan than if they requested a conventional mortgage.Answer: TRUETopic: Chapter 14.3 Types of Mortgages12) Nearly half the funds for mortgage lending comes from mortgage pools and trusts.Answer: FALSETopic: Chapter 14.4 Mortgage-Lending InstitutionsQuestion Status: Updated from Previous Edition13) Many institutions that make mortgage loans do not want to hold large portfolios of long-term securities, because it would subject them to unacceptably high interest-rate risk.Answer: TRUETopic: Chapter 14.4 Mortgage-Lending InstitutionsQuestion Status: Previous Edition14) A problem that initially hindered the marketability of mortgages in a secondary market was that they were not standardized.Answer: TRUETopic: Chapter 14.6 Secondary Mortgage MarketQuestion Status: Previous Edition15) Mortgage-backed securities have declined in popularity in recent years as institutional investors have sought higher returns in other markets.Answer: FALSETopic: Chapter 14.8 What Is a Mortgage-Backed Security?Question Status: Previous Edition16) Mortgage-backed securities are marketable securities collateralized by a pool of mortgages.Answer: TRUETopic: Chapter 14.8 What Is a Mortgage-Backed Security?Question Status: Previous Edition17) Fannie Mae and Freddie Mac together either own or insure the risk on nearly one-fourth of America's residential mortgages.Answer: FALSETopic: Chapter 14.4 Mortgage-Lending InstitutionsQuestion Status: Previous Edition18) A FICO score below 660 is considered good while a score above 720 is likely to cause problems in obtaining a loan.Answer: FALSETopic: Chapter 14.2 Characteristics of the Residential MortgageQuestion Status: Previous Edition19) Subprime loans are those made to borrowers who do not qualify for loans at the usual market rate of interest because of a poor credit rating or because the loan is larger than justified by their income.Answer: TRUETopic: Chapter 14.8 What Is a Mortgage-Backed Security?Question Status: Previous Edition14.3 Essay1) How has the modern mortgage market changed over recent years?Topic: Chapter 14.1 What Are Mortgages?Question Status: Previous Edition2) Explain the features of mortgage loans that are designed to reduce the likelihood of default.Topic: Chapter 14.2 Characteristics of the Residential MortgageQuestion Status: Previous Edition3) What are points? What is their purpose?Topic: Chapter 14.2 Characteristics of the Residential MortgageQuestion Status: Previous Edition4) How does an amortizing mortgage loan differ from a balloon mortgage loan?Topic: Chapter 14.2 Characteristics of the Residential MortgageQuestion Status: Previous Edition5) Evaluate the advantages and disadvantages, from both the lender's and borrower's perspectives, of fixed-rate and adjustable-rate mortgages.Topic: Chapter 14.3 Types of MortgagesQuestion Status: Previous Edition6) Why has the online lending market developed in recent years and what are the advantages and disadvantages of this development?Topic: Chapter 14.4 Mortgage-Lending InstitutionsQuestion Status: Previous Edition7) Why may Fannie Mae and Freddie Mac pose a threat to the health of the financial system?Topic: Chapter 14.8 What Is a Mortgage-Backed Security?Question Status: Previous Edition8) What are mortgage-backed securities, why were they developed, whattypes of mortgage-backed securities are there, and how do they work?Topic: Chapter 14.8 What Is a Mortgage-Backed Security?Question Status: Previous Edition9) What are the benefits and side effects of securitized mortgages?Topic: Chapter 14.7 Securitization of MortgagesQuestion Status: Previous Edition10) Discuss the pros and cons of a subprime market for residential mortgages in the U.S.Topic: Chapter 14.8 What Is a Mortgage-Backed Security?Question Status: New Question。

The Economics of Money, Banking, and Financial Markets, 9e (Mishkin)Chapter 14 The Money Supply Process14.1 Three Players in the Money Supply Process1) The government agency that oversees the banking system and is responsible for the conduct of monetary policy in the United States isA) the Federal Reserve System.B) the United States Treasury.C) the U.S. Gold Commission.D) the House of Representatives.Answer: AQues Status: Previous Edition2) Individuals that lend funds to a bank by opening a checking account are calledA) policyholders.B) partners.C) depositors.D) debt holders.Answer: CQues Status: Previous Edition3) The three players in the money supply process includeA) banks, depositors, and the U.S. Treasury.B) banks, depositors, and borrowers.C) banks, depositors, and the central bank.D) banks, borrowers, and the central bank.Answer: CQues Status: Revised4) Of the three players in the money supply process, most observers agree that the most important player isA) the United States Treasury.B) the Federal Reserve System.C) the FDIC.D) the Office of Thrift Supervision.Answer: BQues Status: Revised14.2 The Fed's Balance Sheet1) Both ________ and ________ are Federal Reserve assets.A) currency in circulation; reservesB) currency in circulation; government securitiesC) government securities; discount loansD) government securities; reservesAnswer: CQues Status: Previous Edition2) The monetary liabilities of the Federal Reserve includeA) government securities and discount loans.B) currency in circulation and reserves.C) government securities and reserves.D) currency in circulation and discount loans.Answer: BQues Status: Previous Edition3) Both ________ and ________ are monetary liabilities of the Fed.A) government securities; discount loansB) currency in circulation; reservesC) government securities; reservesD) currency in circulation; discount loansAnswer: BQues Status: Previous Edition4) The sum of the Fed's monetary liabilities and the U.S. Treasury's monetary liabilities is calledA) the money supply.B) currency in circulation.C) bank reserves.D) the monetary base.Answer: DQues Status: Previous Edition5) The monetary base consists ofA) currency in circulation and Federal Reserve notes.B) currency in circulation and the U.S. Treasury's monetary liabilities.C) currency in circulation and reserves.D) reserves and Federal Reserve Notes.Answer: CQues Status: Previous Edition6) Total reserves minus bank deposits with the Fed equalsA) vault cash.B) excess reserves.C) required reserves.D) currency in circulation.Answer: AQues Status: Previous Edition7) Reserves are equal to the sum ofA) required reserves and excess reserves.B) required reserves and vault cash reserves.C) excess reserves and vault cash reserves.D) vault cash reserves and total reserves.Answer: AQues Status: Previous Edition8) Total reserves are the sum of ________ and ________.A) excess reserves; borrowed reservesB) required reserves; currency in circulationC) vault cash; excess reservesD) excess reserves; required reservesAnswer: DQues Status: Revised9) Excess reserves are equal toA) total reserves minus discount loans.B) vault cash plus deposits with Federal Reserve banks minus required reserves.C) vault cash minus required reserves.D) deposits with the Fed minus vault cash plus required reserves.Answer: BQues Status: Previous Edition10) Total Reserves minus vault cash equalsA) bank deposits with the Fed.B) excess reserves.C) required reserves.D) currency in circulation.Answer: AQues Status: Previous Edition11) The amount of deposits that banks must hold in reserve isA) excess reserves.B) required reserves.C) total reserves.D) vault cash.Answer: BQues Status: Previous Edition12) The percentage of deposits that banks must hold in reserve is theA) excess reserve ratio.B) required reserve ratio.C) total reserve ratio.D) currency ratio.Answer: BQues Status: Previous Edition13) Suppose that from a new checkable deposit, First National Bank holds two million dollars in vault cash, eight million dollars on deposit with the Federal Reserve, and one million dollars in required reserves. Given this information, we can say First National Bank has ________ million dollars in excess reserves.A) threeB) nineC) tenD) elevenAnswer: BQues Status: Previous Edition14) Suppose that from a new checkable deposit, First National Bank holds two million dollars in vault cash, eight million dollars on deposit with the Federal Reserve, and one million dollars in required reserves. Given this information, we can say First National Bank faces a required reserve ratio of ________ percent.A) tenB) twentyC) eightyD) ninetyAnswer: AQues Status: Previous Edition15) Suppose that from a new checkable deposit, First National Bank holds two million dollars in vault cash, eight million dollars on deposit with the Federal Reserve, and nine million dollars in excess reserves. Given this information, we can say First National Bank has ________ million dollars in required reserves.A) oneB) twoC) eightD) tenAnswer: AQues Status: Previous Editionvault cash, eight million dollars on deposit with the Federal Reserve, and nine million dollars in excess reserves. Given this information, we can say First National Bank faces a required reserve ratio of ________ percent.A) tenB) twentyC) eightyD) ninetyAnswer: AQues Status: Previous Edition17) Suppose that from a new checkable deposit, First National Bank holds eight million dollars on deposit with the Federal Reserve, one million dollars in required reserves, and faces a required reserve ratio of ten percent. Given this information, we can say First National Bank has ________ million dollars in excess reserves.A) twoB) eightC) nineD) tenAnswer: CQues Status: Previous Edition18) Suppose that from a new checkable deposit, First National Bank holds eight million dollars on deposit with the Federal Reserve, one million dollars in required reserves, and faces a required reserve ratio of ten percent. Given this information, we can say First National Bank has ________ million dollars in vault cash.A) twoB) eightC) nineD) tenAnswer: AQues Status: Previous Edition19) Suppose that from a new checkable deposit, First National Bank holds two million dollars in vault cash, nine million dollars in excess reserves, and faces a required reserve ratio of ten percent. Given this information, we can say First National Bank has ________ million dollars in required reserves.A) oneB) twoC) eightD) tenAnswer: AQues Status: Previous Editionvault cash, nine million dollars in excess reserves, and faces a required reserve ratio of ten percent. Given this information, we can say First National Bank has ________ million dollars on deposit with the Federal Reserve.A) oneB) twoC) eightD) tenAnswer: CQues Status: Previous Edition21) Suppose that from a new checkable deposit, First National Bank holds two million dollars in vault cash, one million dollars in required reserves, and faces a required reserve ratio of ten percent. Given this information, we can say First National Bank has ________ million dollars in excess reserves.A) oneB) twoC) nineD) tenAnswer: CQues Status: Previous Edition22) Suppose that from a new checkable deposit, First National Bank holds two million dollars in vault cash, one million dollars in required reserves, and faces a required reserve ratio of ten percent. Given this information, we can say First National Bank has ________ million dollars on deposit with the Federal Reserve.A) oneB) twoC) eightD) tenAnswer: CQues Status: Previous Edition23) Suppose that from a new checkable deposit, First National Bank holds eight million dollars on deposit with the Federal Reserve, nine million dollars in excess reserves, and faces a required reserve ratio of ten percent. Given this information, we can say First National Bank has ________ million dollars in required reserves.A) oneB) twoC) nineD) tenAnswer: AQues Status: Previous Editiondeposit with the Federal Reserve, nine million dollars in excess reserves, and faces a required reserve ratio of ten percent. Given this information, we can say First National Bank has ________ million dollars in vault cash.A) oneB) twoC) nineD) tenAnswer: BQues Status: Previous Edition25) The interest rate the Fed charges banks borrowing from the Fed is theA) federal funds rate.B) Treasury bill rate.C) discount rate.D) prime rate.Answer: CQues Status: Previous Edition26) When banks borrow money from the Federal Reserve, these funds are calledA) federal funds.B) discount loans.C) federal loans.D) Treasury funds.Answer: BQues Status: Previous Edition14.3 Control of the Monetary Base1) The monetary base minus currency in circulation equalsA) reserves.B) the borrowed base.C) the nonborrowed base.D) discount loans.Answer: AQues Status: Previous Edition2) The monetary base minus reserves equalsA) currency in circulation.B) the borrowed base.C) the nonborrowed base.D) discount loans.Answer: AQues Status: Previous Edition3) High-powered money minus reserves equalsA) reserves.B) currency in circulation.C) the monetary base.D) the nonborrowed base.Answer: BQues Status: Previous Edition4) High-powered money minus currency in circulation equalsA) reserves.B) the borrowed base.C) the nonborrowed base.D) discount loans.Answer: AQues Status: Previous Edition5) Purchases and sales of government securities by the Federal Reserve are calledA) discount loans.B) federal fund transfers.C) open market operations.D) swap transactions.Answer: CQues Status: Previous Edition6) When the Federal Reserve purchases a government bond from a bank, reserves in the banking system ________ and the monetary base ________, everything else held constant.A) increase; increasesB) increase; decreasesC) decrease; increasesD) decrease; decreasesAnswer: AQues Status: Previous Edition7) When the Federal Reserve sells a government bond to a bank, reserves in the banking system ________ and the monetary base ________, everything else held constant.A) increase; increasesB) increase; decreasesC) decrease; increasesD) decrease; decreasesAnswer: DQues Status: Previous Edition8) When a bank sells a government bond to the Federal Reserve, reserves in the banking system ________ and the monetary base ________, everything else held constant.A) increase; increasesB) increase; decreasesC) decrease; increasesD) decrease; decreasesAnswer: AQues Status: Previous Edition9) When a bank buys a government bond from the Federal Reserve, reserves in the banking system ________ and the monetary base ________, everything else held constant.A) increase; increasesB) increase; decreasesC) decrease; increasesD) decrease; decreasesAnswer: DQues Status: Previous Edition10) When the Fed buys $100 worth of bonds from First National Bank, reserves in the banking systemA) increase by $100.B) increase by more than $100.C) decrease by $100.D) decrease by more than $100.Answer: AQues Status: Previous Edition11) When the Fed sells $100 worth of bonds to First National Bank, reserves in the banking systemA) increase by $100.B) increase by more than $100.C) decrease by $100.D) decrease by more than $100.Answer: CQues Status: Previous Edition12) If a person selling bonds to the Fed cashes the Fed's check, then reserves ________ and currency in circulation ________, everything else held constant.A) remain unchanged; declinesB) remain unchanged; increasesC) decline; remains unchangedD) increase; remains unchangedAnswer: BQues Status: Previous Edition13) The effect of an open market purchase on reserves differs depending on how the seller of the bonds keeps the proceeds. If the proceeds are kept in ________, the open market purchase has no effect on reserves; if the proceeds are kept as ________, reserves increase by the amount of the open market purchase.A) deposits; depositsB) deposits; currencyC) currency; depositsD) currency; currencyAnswer: CQues Status: Previous Edition14) The effect of an open market purchase on reserves differs depending on how the seller of the bonds keeps the proceeds. If the proceeds are kept in currency, the open market purchase________ reserves; if the proceeds are kept as deposits, the open market purchase ________ reserves.A) has no effect on; has no effect onB) has no effect on; increasesC) increases; has no effect onD) decreases; increasesAnswer: BQues Status: Previous Edition15) When an individual sells a $100 bond to the Fed, she may either deposit the check she receives or cash it for currency. In both casesA) reserves increase.B) high-powered money increases.C) reserves decrease.D) high-powered money decreases.Answer: BQues Status: Previous Edition16) If a member of the nonbank public sells a government bond to the Federal Reserve in exchange for currency, the monetary base will ________, but ________.A) remain unchanged; reserves will fallB) remain unchanged; reserves will riseC) rise; currency in circulation will remain unchangedD) rise; reserves will remain unchangedAnswer: DQues Status: Previous Edition17) If a member of the nonbank public purchases a government bond from the Federal Reserve in exchange for currency, the monetary base will ________, but reserves will ________.A) remain unchanged; riseB) remain unchanged; fallC) rise; remain unchangedD) fall; remain unchangedAnswer: DQues Status: Previous Edition18) For which of the following is the change in reserves necessarily different from the change in the monetary base?A) Open market purchases from a bankB) Open market purchases from an individual who deposits the check in a bankC) Open market purchases from an individual who cashes the checkD) Open market sale to a bankAnswer: CQues Status: Previous Edition19) When a member of the nonbank public withdraws currency from her bank account,A) both the monetary base and bank reserves fall.B) both the monetary base and bank reserves rise.C) the monetary base falls, but bank reserves remain unchanged.D) bank reserves fall, but the monetary base remains unchanged.Answer: DQues Status: Previous Edition20) When a member of the nonbank public deposits currency into her bank account,A) both the monetary base and bank reserves fall.B) both the monetary base and bank reserves rise.C) the monetary base falls, but bank reserves remain unchanged.D) bank reserves rise, but the monetary base remains unchanged.Answer: DQues Status: Previous Edition21) When the Fed extends a $100 discount loan to the First National Bank, reserves in the banking systemA) increase by $100.B) increase by more than $100.C) decrease by $100.D) decrease by more than $100.Answer: AQues Status: Previous Edition22) All else the same, when the Fed calls in a $100 discount loan previously extended to the First National Bank, reserves in the banking systemA) increase by $100.B) increase by more than $100.C) decrease by $100.D) decrease by more than $100.Answer: CQues Status: Previous Edition23) When the Federal Reserve extends a discount loan to a bank, the monetary base ________ and reserves ________.A) remains unchanged; decreaseB) remains unchanged; increaseC) increases; increaseD) increases; remain unchangedAnswer: CQues Status: Previous Edition24) When the Federal Reserve calls in a discount loan from a bank, the monetary base ________ and reserves ________.A) remains unchanged; decreaseB) remains unchanged; increaseC) decreases; decreaseD) decreases; remains unchangedAnswer: CQues Status: Previous Edition25) If the Fed decides to reduce bank reserves, it canA) purchase government bonds.B) extend discount loans to banks.C) sell government bonds.D) print more currency.Answer: CQues Status: Previous Edition26) There are two ways in which the Fed can provide additional reserves to the banking system: it can ________ government bonds or it can ________ discount loans to commercial banks.A) sell; extendB) sell; call inC) purchase; extendD) purchase; call inAnswer: CQues Status: Previous Edition27) A decrease in ________ leads to an equal ________ in the monetary base in the short run.A) float; increaseB) float; decreaseC) Treasury deposits at the Fed; decreaseD) discount loans; increaseAnswer: BQues Status: Previous Edition28) The monetary base declines whenA) the Fed extends discount loans.B) Treasury deposits at the Fed decrease.C) float increases.D) the Fed sells securities.Answer: DQues Status: Previous Edition29) An increase in ________ leads to an equal ________ in the monetary base in the short run.A) float; decreaseB) float; increaseC) discount loans; decreaseD) Treasury deposits at the Fed; increaseAnswer: BQues Status: Previous Edition30) A decrease in ________ leads to an equal ________ in the monetary base in the long run.A) float; increaseB) float; decreaseC) securities; increaseD) securities; decreaseAnswer: DQues Status: Previous Edition31) An increase in ________ leads to an equal ________ in the monetary base in the long run.A) float; increaseB) float; decreaseC) securities; increaseD) securities; decreaseAnswer: CQues Status: Previous Edition32) Suppose a person cashes his payroll check and holds all the funds in the form of currency. Everything else held constant, total reserves in the banking system ________ and the monetary base ________.A) remain unchanged; increasesB) decrease; increasesC) decrease; remains unchangedD) decrease; decreasesAnswer: CQues Status: Previous Edition33) Suppose your payroll check is directly deposited to your checking account. Everything else held constant, total reserves in the banking system ________ and the monetary base ________.A) remain unchanged; remains unchangedB) remain unchanged; increasesC) decrease; increasesD) decrease; decreasesAnswer: AQues Status: Revised34) The Fed does not tightly control the monetary base because it does not completely controlA) open market purchases.B) open market sales.C) borrowed reserves.D) the discount rate.Answer: CQues Status: Previous Edition35) Subtracting borrowed reserves from the monetary base obtainsA) reserves.B) high-powered money.C) the nonborrowed monetary base.D) the borrowed monetary base.Answer: CQues Status: Previous Edition36) The relationship between borrowed reserves, the nonborrowed monetary base, and the monetary base isA) MB = MB n - BR.B) BR = MB n - MB.C) BR = MB - MB n.D) MB = BR - MB n.Answer: CQues Status: Previous Edition37) Explain two ways by which the Federal Reserve System can increase the monetary base. Why is the effect of Federal Reserve actions on bank reserves less exact than the effect on the monetary base?Answer: The Fed can increase the monetary base by purchasing government bonds and by extending discount loans. If the person selling the security chooses to keep the proceeds in currency, bank reserves do not increase. Because the Fed cannot control the distribution of the monetary base between reserves and currency, it has less control over reserves than the base. Ques Status: Previous Edition14.4 Multiple Deposit Creation: A Simple Model1) When the Fed supplies the banking system with an extra dollar of reserves, deposits increase by more than one dollar a process calledA) extra deposit creation.B) multiple deposit creation.C) expansionary deposit creation.D) stimulative deposit creation.Answer: BQues Status: Previous Edition2) When the Fed supplies the banking system with an extra dollar of reserves, deposits ________ by ________ than one dollar a process called multiple deposit creation.A) increase; lessB) increase; moreC) decrease; lessD) decrease; moreAnswer: BQues Status: Previous Edition3) If the required reserve ratio is equal to 10 percent, a single bank can increase its loans up to a maximum amount equal toA) its excess reserves.B) 10 times its excess reserves.C) 10 percent of its excess reserves.D) its total reserves.Answer: AQues Status: Previous Edition4) In the simple deposit expansion model, if the Fed purchases $100 worth of bonds from a bank that previously had no excess reserves, the bank can now increase its loans byA) $10.B) $100.C) $100 times the reciprocal of the required reserve ratio.D) $100 times the required reserve ratio.Answer: BQues Status: Previous Edition5) In the simple deposit expansion model, if the Fed purchases $100 worth of bonds from a bank that previously had no excess reserves, deposits in the banking system can potentially increase byA) $10.B) $100.C) $100 times the reciprocal of the required reserve ratio.D) $100 times the required reserve ratio.Answer: CQues Status: Previous Edition6) In the simple deposit expansion model, if the Fed extends a $100 discount loan to a bank that previously had no excess reserves, the bank can now increase its loans byA) $10.B) $100.C) $100 times the reciprocal of the required reserve ratio.D) $100 times the required reserve ratio.Answer: BQues Status: Previous Edition7) In the simple deposit expansion model, if the Fed extends a $100 discount loan to a bank that previously had no excess reserves, deposits in the banking system can potentially increase byA) $10.B) $100.C) $100 times the reciprocal of the required reserve ratio.D) $100 times the required reserve ratio.Answer: CQues Status: Previous Edition9) In the simple model of multiple deposit creation in which banks do not hold excess reserves, the increase in checkable deposits equals the product of the change in excess reserves and theA) reciprocal of the excess reserve ratio.B) simple deposit expansion multiplier.C) reciprocal of the simple deposit multiplier.D) discount rate.Answer: BQues Status: Previous Edition10) The simple deposit multiplier can be expressed as the ratio of theA) change in reserves in the banking system divided by the change in deposits.B) change in deposits divided by the change in reserves in the banking system.C) required reserve ratio divided by the change in reserves in the banking system.D) change in deposits divided by the required reserve ratio.Answer: BQues Status: Previous Edition11) If reserves in the banking system increase by $100, then checkable deposits will increase by $1000 in the simple model of deposit creation when the required reserve ratio isA) 0.01.B) 0.10.C) 0.05.D) 0.20.Answer: BQues Status: Previous Edition12) If reserves in the banking system increase by $100, then checkable deposits will increase by $500 in the simple model of deposit creation when the required reserve ratio isA) 0.01.B) 0.10.C) 0.05.D) 0.20Answer: DQues Status: Previous Edition13) If the required reserve ratio is 10 percent, the simple deposit multiplier isA) 5.0.B) 2.5.C) 100.0.D) 10.0Answer: DQues Status: Previous Edition14) If the required reserve ratio is 15 percent, the simple deposit multiplier isA) 15.0.B) 1.5.C) 6.67.D) 3.33.Answer: CQues Status: Previous Edition15) If the required reserve ratio is 20 percent, the simple deposit multiplier isA) 5.0.B) 2.5.C) 4.0.D) 10.0.Answer: AQues Status: Previous Edition16) If the required reserve ratio is 25 percent, the simple deposit multiplier isA) 5.0.B) 2.5.C) 4.0.D) 10.0.Answer: CQues Status: Previous Edition17) A simple deposit multiplier equal to one implies a required reserve ratio equal toA) 100 percent.B) 50 percent.C) 25 percent.D) 0 percent.Answer: AQues Status: Previous Edition18) A simple deposit multiplier equal to two implies a required reserve ratio equal toA) 100 percent.B) 50 percent.C) 25 percent.D) 0 percent.Answer: BQues Status: Previous Edition19) A simple deposit multiplier equal to four implies a required reserve ratio equal toA) 100 percent.B) 50 percent.C) 25 percent.D) 0 percent.Answer: CQues Status: Previous Edition20) In the simple deposit expansion model, if the banking system has excess reserves of $75, and the required reserve ratio is 20%, the potential expansion of checkable deposits isA) $75.B) $750.C) $37.50.D) $375.Answer: DQues Status: Previous Edition21) In the simple deposit expansion model, if the required reserve ratio is 20 percent and the Fed increases reserves by $100, checkable deposits can potentially expand byA) $100.B) $250.C) $500.D) $1,000.Answer: CQues Status: Previous Edition22) In the simple deposit expansion model, if the required reserve ratio is 10 percent and the Fed increases reserves by $100, checkable deposits can potentially expand byA) $100.B) $250.C) $500.D) $1,000.Answer: DQues Status: Previous Edition23) In the simple deposit expansion model, an expansion in checkable deposits of $1,000 when the required reserve ratio is equal to 20 percent implies that the FedA) sold $200 in government bonds.B) sold $500 in government bonds.C) purchased $200 in government bonds.D) purchased $500 in government bonds.Answer: CQues Status: Previous Edition24) In the simple deposit expansion model, an expansion in checkable deposits of $1,000 when the required reserve ratio is equal to 10 percent implies that the FedA) sold $1,000 in government bonds.B) sold $100 in government bonds.C) purchased $1000 in government bonds.D) purchased $100 in government bonds.Answer: DQues Status: Previous Edition25) In the simple deposit expansion model, a decline in checkable deposits of $1,000 when the required reserve ratio is equal to 20 percent implies that the FedA) sold $200 in government bonds.B) sold $500 in government bonds.C) purchased $200 in government bonds.D) purchased $500 in government bonds.Answer: AQues Status: Previous Edition26) In the simple deposit expansion model, a decline in checkable deposits of $1,000 when the required reserve ratio is equal to 10 percent implies that the FedA) sold $1,000 in government bonds.B) sold $100 in government bonds.C) purchased $1,000 in government bonds.D) purchased $100 in government bonds.Answer: BQues Status: Previous Edition27) In the simple deposit expansion model, a decline in checkable deposits of $500 when the required reserve ratio is equal to 10 percent implies that the FedA) sold $500 in government bonds.B) sold $50 in government bonds.C) purchased $50 in government bonds.D) purchased $500 in government bonds.Answer: BQues Status: Previous Edition28) In the simple deposit expansion model, a decline in checkable deposits of $500 when the required reserve ratio is equal to 20 percent implies that the FedA) sold $250 in government bonds.B) sold $100 in government bonds.C) sold $50 in government bonds.D) purchased $100 in government bonds.Answer: BQues Status: Previous Edition29) If reserves in the banking system increase by $100, then checkable deposits will increase by $400 in the simple model of deposit creation when the required reserve ratio isA) 0.01.B) 0.10.C) 0.20.D) 0.25.Answer: DQues Status: Previous Edition30) If reserves in the banking system increase by $100, then checkable deposits will increase by $667 in the simple model of deposit creation when the required reserve ratio isA) 0.01.B) 0.05.C) 0.15.D) 0.20.Answer: CQues Status: Previous Edition。

第12章银行业：结构与竞争一、概念题1．自动银行机（ABM）（automated banking machine，ABM）答：自动银行机是一种无银行职员、借助于电子计算机系统自动从事银行业务的机器。

西方国家的一些城市，由于地价高、租地难，以及用机器代替雇员可以降低经费而增加盈利等原因，许多银行近年来广泛运用电子计算机，开办“无人银行营业所”、“电视银行营业所”等新型银行营业机构。

这种营业所造价低，规模小，自动化程度高，能够迅速、准确地为客户提供服务，如抵押放款的收回、小额放款的偿还、公共费用的转入、现金的存入和提收、存款转账等。

由于可实行24小时营业，休息日也照常接待顾客，工作效率高，经营成本低，因而具有很强的竞争能力。

2．自动提款机（ATM）（automated teller machine，ATM）答：自动提款机是一种电子装置，利用磁性代码卡自动工作，代替银行柜面人员基本工作的自动化机器。

自动提款机可用于提取现金、查询存款余额、进行账户之间资金划拨、余额查询等工作。

持卡人可以使用或储蓄卡，根据密码办理自动取款、查询余额、转账、更改密码等业务。

3．国民银行（national banks）答：国民银行专指向美国联邦政府登记，经批准注册并领取营业执照接受政府管理的商业银行。

国民银行根据1864年制定的《国民银行法》，由货币监理署（OCC）核准资格，还必须加盟联邦储备体系（FRS）与联邦存款保险公司（FDIC），受联邦储备银行和联邦存款保险公司的监督与检查。

美国的大商业银行基本上都是国民银行。

这种银行最早是根据美国国会1863年2月通过并于1864年作了修订而颁布的《国民银行法》而建立的，可以用美国政府债券作保证发行同等金额的银行券。

1913年美国颁布《联邦储备法》，规定所有国民银行都必须加入联邦储备体系，成为其会员银行。

1935年联邦政府取消了国民银行发行银行券的特权，将发行权集中到联邦储备体系，国民银行专营商业银行业务。

Economics of Money, Banking, and Financial Markets, 11e, Global Edition (Mishkin) Chapter 16 Tools of Monetary Policy16.1 The Market for Reserves and the Federal Funds Rate1) The interest rate charged on overnight loans of reserves between banks is theA) prime rate.B) discount rate.C) federal funds rate.D) Treasury bill rate.Answer: CAACSB: Reflective Thinking2) The primary indicator of the Fed's stance on monetary policy isA) the discount rate.B) the federal funds rate.C) the growth rate of the monetary base.D) the growth rate of M2.Answer: BAACSB: Reflective Thinking3) The quantity of reserves demanded equalsA) required reserves plus borrowed reserves.B) excess reserves plus borrowed reserves.C) required reserves plus excess reserves.D) total reserves minus excess reserves.Answer: CAACSB: Reflective Thinking4) Everything else held constant, when the federal funds rate is ________ the interest rate paid on reserves, the quantity of reserves demanded rises when the federal funds rate ________.A) above, risesB) above, fallsC) below, risesD) below, fallsAnswer: BAACSB: Analytical Thinking5) The opportunity cost of holding excess reserves is the federal funds rateA) minus the discount rate.B) plus the discount rate.C) plus the interest rate paid on excess reserves.D) minus the interest rate paid on excess reserves.Answer: DAACSB: Analytical Thinkingreserves, the demand curve for reserves isA) vertical.B) horizontal.C) positively sloped.D) negatively sloped.Answer: DAACSB: Analytical Thinking7) When the federal funds rate equals the interest rate paid on excess reservesA) the supply curve of reserves is vertical.B) the supply curve of reserves is horizontal.C) the demand curve for reserves is vertical.D) the demand curve for reserves is horizontal.Answer: DAACSB: Analytical Thinking8) The quantity of reserves supplied equalsA) nonborrowed reserves minus borrowed reserves.B) nonborrowed reserves plus borrowed reserves.C) required reserves plus borrowed reserves.D) total reserves minus required reserves.Answer: BAACSB: Reflective Thinking9) In the market for reserves, when the federal funds interest rate is below the discount rate, the supply curve of reserves isA) vertical.B) horizontal.C) positively sloped.D) negatively sloped.Answer: AAACSB: Reflective Thinking10) When the federal funds rate equals the discount rateA) the supply curve of reserves is vertical.B) the supply curve of reserves is horizontal.C) the demand curve for reserves is vertical.D) the demand curve for reserves is horizontal.Answer: BAACSB: Reflective Thinkingreserves, then an open market ________ the supply of reserves, raising the federal funds interest rate, everything else held constant.A) sale decreasesB) sale increasesC) purchase increasesD) purchase decreasesAnswer: AAACSB: Analytical Thinking12) In the market for reserves, if the federal funds rate is above the interest rate paid on excess reserves, an open market purchase ________ the ________ of reserves which causes the federal funds rate to fall, everything else held constant.A) increases; supplyB) increases; demandC) decreases; supplyD) decreases; demandAnswer: AAACSB: Analytical Thinking13) In the market for reserves, if the federal funds rate is above the interest rate paid on excess reserves, an open market purchase ________ the supply of reserves and causes the federal funds interest rate to ________, everything else held constant.A) decreases; fallB) increases; fallC) increases; riseD) decreases; riseAnswer: BAACSB: Analytical Thinking14) In the market for reserves, if the federal funds rate is above the interest rate paid on excess reserves, an open market sale ________ the supply of reserves causing the federal funds rate to ________, everything else held constant.A) decreases; decreaseB) increases; decreaseC) increases; increaseD) decreases; increaseAnswer: DAACSB: Analytical Thinkingreserves, an open market sale ________ the ________ of reserves, causing the federal funds rate to increase, everything else held constant.A) increases; supplyB) increases; demandC) decreases; supplyD) decreases; demandAnswer: CAACSB: Analytical Thinking16) In the market for reserves, a lower discount rateA) decreases the supply of reserves.B) increases the supply of reserves.C) lengthens the vertical section of the supply curve of reserves.D) shortens the vertical section of the supply curve of reserves.Answer: DAACSB: Analytical Thinking17) In the market for reserves, a lower interest rate paid on excess reservesA) decreases the supply of reserves.B) increases the supply of reserves.C) decreases the effective floor for the federal funds rate.D) increases the effective floor for the federal funds rate.Answer: CAACSB: Analytical Thinking18) Everything else held constant, in the market for reserves, when the federal funds rate is 3%, lowering the discount rate from 5% to 4%A) lowers the federal funds rate.B) raises the federal funds rate.C) has no effect on the federal funds rate.D) has an indeterminate effect on the federal funds rate.Answer: CAACSB: Analytical Thinking19) Everything else held constant, in the market for reserves, when the federal funds rate is 3%, increasing the interest rate paid on excess reserves from 1% to 2%A) lowers the federal funds rate.B) raises the federal funds rate.C) has no effect on the federal funds rate.D) has an indeterminate effect on the federal funds rate.Answer: CAACSB: Analytical Thinking20) Everything else held constant, in the market for reserves, when the federal funds rate is 5%, lowering the discount rate from 5% to 4%A) lowers the federal funds rate.B) raises the federal funds rate.C) has no effect on the federal funds rate.D) has an indeterminate effect on the federal funds rate.Answer: AAACSB: Analytical Thinking21) Everything else held constant, in the market for reserves, when the federal funds rate is 1%, increasing the interest rate paid on excess reserves from 1% to 2%A) lowers the federal funds rate.B) raises the federal funds rate.C) has no effect on the federal funds rate.D) has an indeterminate effect on the federal funds rate.Answer: BAACSB: Analytical Thinking22) Everything else held constant, in the market for reserves, when the federal funds rate is 3%, raising the discount rate from 5% to 6%A) lowers the federal funds rate.B) raises the federal funds rate.C) has no effect on the federal funds rate.D) has an indeterminate effect on the federal funds rate.Answer: CAACSB: Analytical Thinking23) Everything else held constant, in the market for reserves, when the federal funds rate is 3%, lowering the interest rate paid on excess reserves rate from 2% to 1%A) lowers the federal funds rate.B) raises the federal funds rate.C) has no effect on the federal funds rate.D) has an indeterminate effect on the federal funds rate.Answer: CAACSB: Analytical Thinking24) Everything else held constant, in the market for reserves, when the federal funds rate equals the discount rate, lowering the discount rateA) increases the federal funds rate.B) lowers the federal funds rate.C) has no effect on the federal funds rate.D) has an indeterminate effect of the federal funds rate.Answer: BAACSB: Analytical Thinking。

第14章货币供给过程一、概念题1．贴现率（discount rate）答：贴现率亦称“贴现利率”。

贴现利息与贴现的票据面额之间的比率。

即银行接受商业票据、国库券等贴现时，对贴现申请人收取贴现利息时所依据的利率。

贴现利息按贴现票据的金额及贴现利率和贴现时间计算，具体计算公式：贴现率=（贴现利息/票据面额）×100%贴现利息=票据面额×月贴现率×未到期天数×（1/30）贴现金额=票据面额-贴现利息2．超额准备金（excess reserves）答：超额储备又称“超额准备金”，指商业银行或其他存款机构在货币当局规定必须缴纳的法定准备金之外，还保留的那部分储备资金。

超额储备等于总储备减去法定储备。

商业银行保留超额准备金主要是为了解决意外的大额提现、结清存款或更好地投资。

超额储备的变动将影响到货币乘数大小，在基础货币供应量不变的情况下，它制约着银行体系创造货币的能力。

3．浮款（float）答：浮款是指与支票清算相关的在途资金，等于“托收中的现金项目”减去“递延的可供使用的现金项目”。

4．高能货币（high-powered money）答：高能货币亦称“基础货币”、“货币基数”、“货币基础”或“强力货币”，它是经过商业银行的存贷款业务而能扩张或收缩货币供应量的货币。

西方国家的基础货币包括商业银行存入中央银行的存款准备金（包括法定准备金和超额准备金）与社会公众所持有的现金之和。

基础货币有四个属性：①可控性，是中央银行能调控的货币；②负债性，是中央银行的负债；③扩张性，能被中央银行吸收作为创造存款货币的基础，具有多倍创造的功能；④初始来源惟一性，即其增量只能来源于中央银行。

中央银行通过调节基础货币的数量就能数倍扩张或收缩货币供应量，因此，基础货币构成市场货币供应量的基础。

在现代银行体系中，中央银行对宏观金融活动的调节，主要是通过控制基础货币的数量来实现的。

其具体操作过程是：当中央银行提高或降低存款准备金率时，各商业银行就要调整资产负债项目，相应增加或减少其在中央银行的法定准备金，通过乘数效应，可对货币供应量产生紧缩或扩张的作用。

The Economics of Money, Banking, and Financial Markets, 9e (Mishkin)Chapter 14 The Money Supply Process14.1 Three Players in the Money Supply Process1) The government agency that oversees the banking system and is responsible for the conduct of monetary policy in the United States isA) the Federal Reserve System.B) the United States Treasury.C) the U.S. Gold Commission.D) the House of Representatives.Answer: AQues Status: Previous Edition2) Individuals that lend funds to a bank by opening a checking account are calledA) policyholders.B) partners.C) depositors.D) debt holders.Answer: CQues Status: Previous Edition3) The three players in the money supply process includeA) banks, depositors, and the U.S. Treasury.B) banks, depositors, and borrowers.C) banks, depositors, and the central bank.D) banks, borrowers, and the central bank.Answer: CQues Status: Revised4) Of the three players in the money supply process, most observers agree that the most important player isA) the United States Treasury.B) the Federal Reserve System.C) the FDIC.D) the Office of Thrift Supervision.Answer: BQues Status: Revised14.2 The Fed's Balance Sheet1) Both ________ and ________ are Federal Reserve assets.A) currency in circulation; reservesB) currency in circulation; government securitiesC) government securities; discount loansD) government securities; reservesAnswer: CQues Status: Previous Edition2) The monetary liabilities of the Federal Reserve includeA) government securities and discount loans.B) currency in circulation and reserves.C) government securities and reserves.D) currency in circulation and discount loans.Answer: BQues Status: Previous Edition3) Both ________ and ________ are monetary liabilities of the Fed.A) government securities; discount loansB) currency in circulation; reservesC) government securities; reservesD) currency in circulation; discount loansAnswer: BQues Status: Previous Edition4) The sum of the Fed's monetary liabilities and the U.S. Treasury's monetary liabilities is calledA) the money supply.B) currency in circulation.C) bank reserves.D) the monetary base.Answer: DQues Status: Previous Edition5) The monetary base consists ofA) currency in circulation and Federal Reserve notes.B) currency in circulation and the U.S. Treasury's monetary liabilities.C) currency in circulation and reserves.D) reserves and Federal Reserve Notes.Answer: CQues Status: Previous Edition6) Total reserves minus bank deposits with the Fed equalsA) vault cash.B) excess reserves.C) required reserves.D) currency in circulation.Answer: AQues Status: Previous Edition7) Reserves are equal to the sum ofA) required reserves and excess reserves.B) required reserves and vault cash reserves.C) excess reserves and vault cash reserves.D) vault cash reserves and total reserves.Answer: AQues Status: Previous Edition8) Total reserves are the sum of ________ and ________.A) excess reserves; borrowed reservesB) required reserves; currency in circulationC) vault cash; excess reservesD) excess reserves; required reservesAnswer: DQues Status: Revised9) Excess reserves are equal toA) total reserves minus discount loans.B) vault cash plus deposits with Federal Reserve banks minus required reserves.C) vault cash minus required reserves.D) deposits with the Fed minus vault cash plus required reserves.Answer: BQues Status: Previous Edition10) Total Reserves minus vault cash equalsA) bank deposits with the Fed.B) excess reserves.C) required reserves.D) currency in circulation.Answer: AQues Status: Previous Edition11) The amount of deposits that banks must hold in reserve isA) excess reserves.B) required reserves.C) total reserves.D) vault cash.Answer: BQues Status: Previous Edition12) The percentage of deposits that banks must hold in reserve is theA) excess reserve ratio.B) required reserve ratio.C) total reserve ratio.D) currency ratio.Answer: BQues Status: Previous Edition13) Suppose that from a new checkable deposit, First National Bank holds two million dollars in vault cash, eight million dollars on deposit with the Federal Reserve, and one million dollars in required reserves. Given this information, we can say First National Bank has ________ million dollars in excess reserves.A) threeB) nineC) tenD) elevenAnswer: BQues Status: Previous Edition14) Suppose that from a new checkable deposit, First National Bank holds two million dollars in vault cash, eight million dollars on deposit with the Federal Reserve, and one million dollars in required reserves. Given this information, we can say First National Bank faces a required reserve ratio of ________ percent.A) tenB) twentyC) eightyD) ninetyAnswer: AQues Status: Previous Edition15) Suppose that from a new checkable deposit, First National Bank holds two million dollars in vault cash, eight million dollars on deposit with the Federal Reserve, and nine million dollars in excess reserves. Given this information, we can say First National Bank has ________ million dollars in required reserves.A) oneB) twoC) eightD) tenAnswer: AQues Status: Previous Edition16) Suppose that from a new checkable deposit, First National Bank holds two million dollars in vault cash, eight million dollars on deposit with the Federal Reserve, and nine million dollars in excess reserves. Given this information, we can say First National Bank faces a required reserve ratio of ________ percent.A) tenB) twentyC) eightyD) ninetyAnswer: AQues Status: Previous Edition17) Suppose that from a new checkable deposit, First National Bank holds eight million dollars on deposit with the Federal Reserve, one million dollars in required reserves, and faces a required reserve ratio of ten percent. Given this information, we can say First National Bank has ________ million dollars in excess reserves.A) twoB) eightC) nineD) tenAnswer: CQues Status: Previous Edition18) Suppose that from a new checkable deposit, First National Bank holds eight million dollars on deposit with the Federal Reserve, one million dollars in required reserves, and faces a required reserve ratio of ten percent. Given this information, we can say First National Bank has ________ million dollars in vault cash.A) twoB) eightC) nineD) tenAnswer: AQues Status: Previous Edition19) Suppose that from a new checkable deposit, First National Bank holds two million dollars in vault cash, nine million dollars in excess reserves, and faces a required reserve ratio of ten percent. Given this information, we can say First National Bank has ________ million dollars in required reserves.A) oneB) twoC) eightD) tenAnswer: AQues Status: Previous Edition20) Suppose that from a new checkable deposit, First National Bank holds two million dollars in vault cash, nine million dollars in excess reserves, and faces a required reserve ratio of ten percent. Given this information, we can say First National Bank has ________ million dollars on deposit with the Federal Reserve.A) oneB) twoC) eightD) tenAnswer: CQues Status: Previous Edition21) Suppose that from a new checkable deposit, First National Bank holds two million dollars in vault cash, one million dollars in required reserves, and faces a required reserve ratio of ten percent. Given this information, we can say First National Bank has ________ million dollars in excess reserves.A) oneB) twoC) nineD) tenAnswer: CQues Status: Previous Edition22) Suppose that from a new checkable deposit, First National Bank holds two million dollars in vault cash, one million dollars in required reserves, and faces a required reserve ratio of ten percent. Given this information, we can say First National Bank has ________ million dollars on deposit with the Federal Reserve.A) oneB) twoC) eightD) tenAnswer: CQues Status: Previous Edition23) Suppose that from a new checkable deposit, First National Bank holds eight million dollars on deposit with the Federal Reserve, nine million dollars in excess reserves, and faces a required reserve ratio of ten percent. Given this information, we can say First National Bank has ________ million dollars in required reserves.A) oneB) twoC) nineD) tenAnswer: AQues Status: Previous Edition24) Suppose that from a new checkable deposit, First National Bank holds eight million dollars on deposit with the Federal Reserve, nine million dollars in excess reserves, and faces a required reserve ratio of ten percent. Given this information, we can say First National Bank has ________ million dollars in vault cash.A) oneB) twoC) nineD) tenAnswer: BQues Status: Previous Edition25) The interest rate the Fed charges banks borrowing from the Fed is theA) federal funds rate.B) Treasury bill rate.C) discount rate.D) prime rate.Answer: CQues Status: Previous Edition26) When banks borrow money from the Federal Reserve, these funds are calledA) federal funds.B) discount loans.C) federal loans.D) Treasury funds.Answer: BQues Status: Previous Edition14.3 Control of the Monetary Base1) The monetary base minus currency in circulation equalsA) reserves.B) the borrowed base.C) the nonborrowed base.D) discount loans.Answer: AQues Status: Previous Edition2) The monetary base minus reserves equalsA) currency in circulation.B) the borrowed base.C) the nonborrowed base.D) discount loans.Answer: AQues Status: Previous Edition3) High-powered money minus reserves equalsA) reserves.B) currency in circulation.C) the monetary base.D) the nonborrowed base.Answer: BQues Status: Previous Edition4) High-powered money minus currency in circulation equalsA) reserves.B) the borrowed base.C) the nonborrowed base.D) discount loans.Answer: AQues Status: Previous Edition5) Purchases and sales of government securities by the Federal Reserve are calledA) discount loans.B) federal fund transfers.C) open market operations.D) swap transactions.Answer: CQues Status: Previous Edition6) When the Federal Reserve purchases a government bond from a bank, reserves in the banking system ________ and the monetary base ________, everything else held constant.A) increase; increasesB) increase; decreasesC) decrease; increasesD) decrease; decreasesAnswer: AQues Status: Previous Edition7) When the Federal Reserve sells a government bond to a bank, reserves in the banking system ________ and the monetary base ________, everything else held constant.A) increase; increasesB) increase; decreasesC) decrease; increasesD) decrease; decreasesAnswer: DQues Status: Previous Edition8) When a bank sells a government bond to the Federal Reserve, reserves in the banking system ________ and the monetary base ________, everything else held constant.A) increase; increasesB) increase; decreasesC) decrease; increasesD) decrease; decreasesAnswer: AQues Status: Previous Edition9) When a bank buys a government bond from the Federal Reserve, reserves in the banking system ________ and the monetary base ________, everything else held constant.A) increase; increasesB) increase; decreasesC) decrease; increasesD) decrease; decreasesAnswer: DQues Status: Previous Edition10) When the Fed buys $100 worth of bonds from First National Bank, reserves in the banking systemA) increase by $100.B) increase by more than $100.C) decrease by $100.D) decrease by more than $100.Answer: AQues Status: Previous Edition11) When the Fed sells $100 worth of bonds to First National Bank, reserves in the banking systemA) increase by $100.B) increase by more than $100.C) decrease by $100.D) decrease by more than $100.Answer: CQues Status: Previous Edition12) If a person selling bonds to the Fed cashes the Fed's check, then reserves ________ and currency in circulation ________, everything else held constant.A) remain unchanged; declinesB) remain unchanged; increasesC) decline; remains unchangedD) increase; remains unchangedAnswer: BQues Status: Previous Edition13) The effect of an open market purchase on reserves differs depending on how the seller of the bonds keeps the proceeds. If the proceeds are kept in ________, the open market purchase has no effect on reserves; if the proceeds are kept as ________, reserves increase by the amount of the open market purchase.A) deposits; depositsB) deposits; currencyC) currency; depositsD) currency; currencyAnswer: CQues Status: Previous Edition14) The effect of an open market purchase on reserves differs depending on how the seller of the bonds keeps the proceeds. If the proceeds are kept in currency, the open market purchase ________ reserves; if the proceeds are kept as deposits, the open market purchase ________ reserves.A) has no effect on; has no effect onB) has no effect on; increasesC) increases; has no effect onD) decreases; increasesAnswer: BQues Status: Previous Edition15) When an individual sells a $100 bond to the Fed, she may either deposit the check she receives or cash it for currency. In both casesA) reserves increase.B) high-powered money increases.C) reserves decrease.D) high-powered money decreases.Answer: BQues Status: Previous Edition16) If a member of the nonbank public sells a government bond to the Federal Reserve in exchange for currency, the monetary base will ________, but ________.A) remain unchanged; reserves will fallB) remain unchanged; reserves will riseC) rise; currency in circulation will remain unchangedD) rise; reserves will remain unchangedAnswer: DQues Status: Previous Edition17) If a member of the nonbank public purchases a government bond from the Federal Reserve in exchange for currency, the monetary base will ________, but reserves will ________.A) remain unchanged; riseB) remain unchanged; fallC) rise; remain unchangedD) fall; remain unchangedAnswer: DQues Status: Previous Edition18) For which of the following is the change in reserves necessarily different from the change in the monetary base?A) Open market purchases from a bankB) Open market purchases from an individual who deposits the check in a bankC) Open market purchases from an individual who cashes the checkD) Open market sale to a bankAnswer: CQues Status: Previous Edition19) When a member of the nonbank public withdraws currency from her bank account,A) both the monetary base and bank reserves fall.B) both the monetary base and bank reserves rise.C) the monetary base falls, but bank reserves remain unchanged.D) bank reserves fall, but the monetary base remains unchanged.Answer: DQues Status: Previous Edition20) When a member of the nonbank public deposits currency into her bank account,A) both the monetary base and bank reserves fall.B) both the monetary base and bank reserves rise.C) the monetary base falls, but bank reserves remain unchanged.D) bank reserves rise, but the monetary base remains unchanged.Answer: DQues Status: Previous Edition21) When the Fed extends a $100 discount loan to the First National Bank, reserves in the banking systemA) increase by $100.B) increase by more than $100.C) decrease by $100.D) decrease by more than $100.Answer: AQues Status: Previous Edition22) All else the same, when the Fed calls in a $100 discount loan previously extended to the First National Bank, reserves in the banking systemA) increase by $100.B) increase by more than $100.C) decrease by $100.D) decrease by more than $100.Answer: CQues Status: Previous Edition23) When the Federal Reserve extends a discount loan to a bank, the monetary base ________ and reserves ________.A) remains unchanged; decreaseB) remains unchanged; increaseC) increases; increaseD) increases; remain unchangedAnswer: CQues Status: Previous Edition24) When the Federal Reserve calls in a discount loan from a bank, the monetary base ________ and reserves ________.A) remains unchanged; decreaseB) remains unchanged; increaseC) decreases; decreaseD) decreases; remains unchangedAnswer: CQues Status: Previous Edition25) If the Fed decides to reduce bank reserves, it canA) purchase government bonds.B) extend discount loans to banks.C) sell government bonds.D) print more currency.Answer: CQues Status: Previous Edition26) There are two ways in which the Fed can provide additional reserves to the banking system: it can ________ government bonds or it can ________ discount loans to commercial banks.A) sell; extendB) sell; call inC) purchase; extendD) purchase; call inAnswer: CQues Status: Previous Edition27) A decrease in ________ leads to an equal ________ in the monetary base in the short run.A) float; increaseB) float; decreaseC) Treasury deposits at the Fed; decreaseD) discount loans; increaseAnswer: BQues Status: Previous Edition28) The monetary base declines whenA) the Fed extends discount loans.B) Treasury deposits at the Fed decrease.C) float increases.D) the Fed sells securities.Answer: DQues Status: Previous Edition29) An increase in ________ leads to an equal ________ in the monetary base in the short run.A) float; decreaseB) float; increaseC) discount loans; decreaseD) Treasury deposits at the Fed; increaseAnswer: BQues Status: Previous Edition30) A decrease in ________ leads to an equal ________ in the monetary base in the long run.A) float; increaseB) float; decreaseC) securities; increaseD) securities; decreaseAnswer: DQues Status: Previous Edition31) An increase in ________ leads to an equal ________ in the monetary base in the long run.A) float; increaseB) float; decreaseC) securities; increaseD) securities; decreaseAnswer: CQues Status: Previous Edition32) Suppose a person cashes his payroll check and holds all the funds in the form of currency. Everything else held constant, total reserves in the banking system ________ and the monetary base ________.A) remain unchanged; increasesB) decrease; increasesC) decrease; remains unchangedD) decrease; decreasesAnswer: CQues Status: Previous Edition33) Suppose your payroll check is directly deposited to your checking account. Everything else held constant, total reserves in the banking system ________ and the monetary base ________.A) remain unchanged; remains unchangedB) remain unchanged; increasesC) decrease; increasesD) decrease; decreasesAnswer: AQues Status: Revised34) The Fed does not tightly control the monetary base because it does not completely controlA) open market purchases.B) open market sales.C) borrowed reserves.D) the discount rate.Answer: CQues Status: Previous Edition35) Subtracting borrowed reserves from the monetary base obtainsA) reserves.B) high-powered money.C) the nonborrowed monetary base.D) the borrowed monetary base.Answer: CQues Status: Previous Edition36) The relationship between borrowed reserves, the nonborrowed monetary base, and the monetary base isA) MB = MB n - BR.B) BR = MB n - MB.C) BR = MB - MB n.D) MB = BR - MB n.Answer: CQues Status: Previous Edition37) Explain two ways by which the Federal Reserve System can increase the monetary base. Why is the effect of Federal Reserve actions on bank reserves less exact than the effect on the monetary base?Answer: The Fed can increase the monetary base by purchasing government bonds and by extending discount loans. If the person selling the security chooses to keep the proceeds in currency, bank reserves do not increase. Because the Fed cannotcontrol the distribution of the monetary base between reserves and currency, it has less control over reserves than the base.Ques Status: Previous Edition14.4 Multiple Deposit Creation: A Simple Model1) When the Fed supplies the banking system with an extra dollar of reserves, deposits increase by more than one dollar a process calledA) extra deposit creation.B) multiple deposit creation.C) expansionary deposit creation.D) stimulative deposit creation.Answer: BQues Status: Previous Edition2) When the Fed supplies the banking system with an extra dollar of reserves, deposits ________ by ________ than one dollar a process called multiple deposit creation.A) increase; lessB) increase; moreC) decrease; lessD) decrease; moreAnswer: BQues Status: Previous Edition3) If the required reserve ratio is equal to 10 percent, a single bank can increase its loans up to a maximum amount equal toA) its excess reserves.B) 10 times its excess reserves.C) 10 percent of its excess reserves.D) its total reserves.Answer: AQues Status: Previous Edition4) In the simple deposit expansion model, if the Fed purchases $100 worth of bonds from a bank that previously had no excess reserves, the bank can now increase its loans byA) $10.B) $100.C) $100 times the reciprocal of the required reserve ratio.D) $100 times the required reserve ratio.Answer: BQues Status: Previous Edition5) In the simple deposit expansion model, if the Fed purchases $100 worth of bonds from a bank that previously had no excess reserves, deposits in the banking system can potentially increase byA) $10.B) $100.C) $100 times the reciprocal of the required reserve ratio.D) $100 times the required reserve ratio.Answer: CQues Status: Previous Edition6) In the simple deposit expansion model, if the Fed extends a $100 discount loan to a bank that previously had no excess reserves, the bank can now increase its loans byA) $10.B) $100.C) $100 times the reciprocal of the required reserve ratio.D) $100 times the required reserve ratio.Answer: BQues Status: Previous Edition7) In the simple deposit expansion model, if the Fed extends a $100 discount loan to a bank that previously had no excess reserves, deposits in the banking system can potentially increase byA) $10.B) $100.C) $100 times the reciprocal of the required reserve ratio.D) $100 times the required reserve ratio.Answer: CQues Status: Previous Edition9) In the simple model of multiple deposit creation in which banks do not hold excess reserves, the increase in checkable deposits equals the product of the change in excess reserves and theA) reciprocal of the excess reserve ratio.B) simple deposit expansion multiplier.C) reciprocal of the simple deposit multiplier.D) discount rate.Answer: BQues Status: Previous Edition10) The simple deposit multiplier can be expressed as the ratio of theA) change in reserves in the banking system divided by the change in deposits.B) change in deposits divided by the change in reserves in the banking system.C) required reserve ratio divided by the change in reserves in the banking system.D) change in deposits divided by the required reserve ratio.Answer: BQues Status: Previous Edition11) If reserves in the banking system increase by $100, then checkable deposits will increase by $1000 in the simple model of deposit creation when the required reserve ratio isA) 0.01.B) 0.10.C) 0.05.D) 0.20.Answer: BQues Status: Previous Edition12) If reserves in the banking system increase by $100, then checkable deposits will increase by $500 in the simple model of deposit creation when the required reserve ratio isA) 0.01.B) 0.10.C) 0.05.D) 0.20Answer: DQues Status: Previous Edition13) If the required reserve ratio is 10 percent, the simple deposit multiplier isA) 5.0.B) 2.5.C) 100.0.D) 10.0Answer: DQues Status: Previous Edition14) If the required reserve ratio is 15 percent, the simple deposit multiplier isA) 15.0.B) 1.5.C) 6.67.D) 3.33.Answer: CQues Status: Previous Edition15) If the required reserve ratio is 20 percent, the simple deposit multiplier isA) 5.0.B) 2.5.C) 4.0.D) 10.0.Answer: AQues Status: Previous Edition16) If the required reserve ratio is 25 percent, the simple deposit multiplier isA) 5.0.B) 2.5.C) 4.0.D) 10.0.Answer: CQues Status: Previous Edition17) A simple deposit multiplier equal to one implies a required reserve ratio equal toA) 100 percent.B) 50 percent.C) 25 percent.D) 0 percent.Answer: AQues Status: Previous Edition18) A simple deposit multiplier equal to two implies a required reserve ratio equal toA) 100 percent.B) 50 percent.C) 25 percent.D) 0 percent.Answer: BQues Status: Previous Edition19) A simple deposit multiplier equal to four implies a required reserve ratio equal toA) 100 percent.B) 50 percent.C) 25 percent.D) 0 percent.Answer: CQues Status: Previous Edition20) In the simple deposit expansion model, if the banking system has excess reserves of $75, and the required reserve ratio is 20%, the potential expansion of checkable deposits isA) $75.B) $750.C) $37.50.D) $375.Answer: DQues Status: Previous Edition21) In the simple deposit expansion model, if the required reserve ratio is 20 percent and the Fed increases reserves by $100, checkable deposits can potentially expand byA) $100.B) $250.C) $500.D) $1,000.Answer: CQues Status: Previous Edition22) In the simple deposit expansion model, if the required reserve ratio is 10 percent and the Fed increases reserves by $100, checkable deposits can potentially expand byA) $100.B) $250.C) $500.D) $1,000.Answer: DQues Status: Previous Edition23) In the simple deposit expansion model, an expansion in checkable deposits of $1,000 when the required reserve ratio is equal to 20 percent implies that the FedA) sold $200 in government bonds.B) sold $500 in government bonds.C) purchased $200 in government bonds.D) purchased $500 in government bonds.Answer: CQues Status: Previous Edition24) In the simple deposit expansion model, an expansion in checkable deposits of $1,000 when the required reserve ratio is equal to 10 percent implies that the FedA) sold $1,000 in government bonds.B) sold $100 in government bonds.C) purchased $1000 in government bonds.D) purchased $100 in government bonds.Answer: DQues Status: Previous Edition25) In the simple deposit expansion model, a decline in checkable deposits of $1,000 when the required reserve ratio is equal to 20 percent implies that the FedA) sold $200 in government bonds.B) sold $500 in government bonds.C) purchased $200 in government bonds.。

Financial Markets and Institutions, 8e (Mishkin)Chapter 13 The Stock Market13.1 Multiple Choice1) (I) A share of common stock in a firm represents an ownership interest in that firm. (II) A share of preferred stock is as much like a bond as it is like common stock.A) (I) is true, (II) false.B) (I) is false, (II) true.C) Both are true.D) Both are false.Answer: CTopic: Chapter 13.1 Investing in StocksQuestion Status: Previous Edition2) Preferred stockholders hold a claim on assets that has priority over the claims ofA) both common stockholders and bondholders.B) neither common stockholders nor bondholders.C) common stockholders, but after that of bondholders.D) bondholders, but after that of common stockholders.Answer: CTopic: Chapter 13.1 Investing in StocksQuestion Status: Previous Edition3) (I) Preferred stockholders hold a claim on assets that has priority over the claims of common stockholders, but after that of bondholders.(II) Firms issue preferred stock in far greater amounts than common stock.A) (I) is true, (II) false.B) (I) is false, (II) true.C) Both are true.D) Both are false.Answer: ATopic: Chapter 13.1 Investing in StocksQuestion Status: Previous Edition4) (I) Preferred stockholders hold a claim on assets that has priority over the claims of common stockholders. (II) Bondholders hold a claim on assets that has priority over the claims of preferred stockholders.A) (I) is true, (II) false.B) (I) is false, (II) true.C) Both are true.D) Both are false.Answer: CTopic: Chapter 13.1 Investing in StocksQuestion Status: Previous Edition5) (I) Firms issue common stock in far greater amounts than preferred stock.(II) In a given year, the total volume of stock issued is much less than the volume of bonds issued.A) (I) is true, (II) false.B) (I) is false, (II) true.C) Both are true.D) Both are false.Answer: CTopic: Chapter 13.1 Investing in StocksQuestion Status: Previous Edition6) The riskiest capital market security isA) preferred stock.B) common stock.C) corporate bonds.D) Treasury bonds.Answer: BTopic: Chapter 13.1 Investing in StocksQuestion Status: Previous Edition7) (I) The largest of the organized stock exchanges in the United States is the New York Stock Exchange.(II) To be listed on the NYSE, a firm must have a minimum of $100 million in market value or $10 million in revenues.A) (I) is true, (II) false.B) (I) is false, (II) true.C) Both are true.D) Both are false.Answer: ATopic: Chapter 13.1 Investing in StocksQuestion Status: Previous Edition8) To list on the NYSE, a firm mustA) have earnings of at least $10 million per year.B) have at least $500 million in outstanding debt.C) have a total of $100 million in market value.D) meet all of the above requirements.E) meet A and C of the above requirements.Answer: ETopic: Chapter 13.1 Investing in StocksQuestion Status: Updated from Previous Edition9) Securities not listed on one of the exchanges trade in the over-the-counter market. In this exchange, dealers "make a market" byA) buying stocks for inventory when investors want to sell.B) selling stocks from inventory when investors want to buy.C) doing both of the above.D) doing neither of the above.Answer: CTopic: Chapter 13.1 Investing in StocksQuestion Status: Previous Edition10) The most active stock exchange in the world is theA) Nikkei Stock Exchange.B) London Stock Exchange.C) Shanghai Stock Exchange.D) New York Stock Exchange.Answer: ATopic: Chapter 13.1 Investing in StocksQuestion Status: Previous Edition11) Which of the following statements about trading operations in an organized exchange is correct?A) Floor traders all deal in a wide variety of stocks.B) In most trades, specialists match buy and sell orders.C) In most trades, specialists buy for or sell from their own inventories.D) The SuperDOT system is used to expedite large trades of over 100,000 shares. Answer: BTopic: Chapter 13.1 Investing in StocksQuestion Status: Previous Edition12) Which of the following is not an advantage of Electronic Communications Networks (ECNs)?A) All unfilled orders are available for review by ECN traders.B) Transactions costs are lower for ECN trades.C) Trades are made and confirmed faster.D) ECNs work well for thinly traded stocks.Answer: DTopic: Chapter 13.1 Investing in StocksQuestion Status: Previous Edition13) Which of the following statements is false regarding Electronic Communications Networks (ECNs)?A) Archipelago and Instinet are two examples of ECNs.B) Competition from ECNs has forced NASDAQ to cut its fees.C) Traders benefit from lower trading costs and faster service.D) ECNs allow institutional investors, but not individuals, to trade after hours. Answer: DTopic: Chapter 13.1 Investing in StocksQuestion Status: Previous Edition14) A basic principle of finance is that the value of any investment isA) the present value of all future net cash flows generated by the investment.B) the undiscounted sum of all future net cash flows generated by the investment.C) unrelated to the future net cash flows generated by the investment.D) unrelated to the degree of risk associated with the future net cash flows generated by the investment.Answer: ATopic: Chapter 13.2 Computing the Price of Common StockQuestion Status: Previous Edition15) A stock currently sells for $25 per share and pays $0.24 per year in dividends. What is an investor's valuation of this stock if she expects it to be selling for $30 in one year and requires a 15 percent return on equity investments?A) $30.24B) $26.30C) $26.09D) $27.74Answer: BTopic: Chapter 13.2 Computing the Price of Common StockQuestion Status: Previous Edition16) A stock currently sells for $30 per share and pays $1.00 per year in dividends. What is an investor's valuation of this stock if he expects it to be selling for $37 in one year and requires a 12 percent return on equity investments?A) $38B) $33.50C) $34.50D) $33.93Answer: DTopic: Chapter 13.2 Computing the Price of Common StockQuestion Status: Previous Edition17) In the one-period valuation model, a stock's value will be higherA) the higher its expected future price is.B) the lower its dividend is.C) the higher the required return on investments in equity is.D) all of the above.Answer: ATopic: Chapter 13.2 Computing the Price of Common StockQuestion Status: Previous Edition18) In the one-period valuation model, a stock's value falls if the ________ rises.A) dividendB) expected future priceC) required return on equityD) current priceAnswer: CTopic: Chapter 13.2 Computing the Price of Common StockQuestion Status: Previous Edition19) In the generalized dividend valuation model, a stock's value depends only onA) its future dividend payments and its future price.B) its future dividend payments and the required return on equity.C) its future price and the required return on investments on equity.D) its future dividend payments.Answer: BTopic: Chapter 13.2 Computing the Price of Common StockQuestion Status: Previous Edition20) Which of the following is not an element of the Gordon growth model of stock valuation?A) The stock's most recent dividend paidB) The expected constant growth rate of dividendsC) The required return on investments in equityD) The stock's expected future priceAnswer: DTopic: Chapter 13.2 Computing the Price of Common StockQuestion Status: Previous Edition21) According to the Gordon growth model, what is an investor's valuation of a stock whose current dividend is $1.00 per year if dividends are expected to grow at a constant rate of 10 percent over a long period of time and the investor's required return is 11 percent?A) $110B) $100C) $11D) $10E) $5.24Answer: ATopic: Chapter 13.2 Computing the Price of Common StockQuestion Status: Previous Edition22) According to the Gordon growth model, what is an investor's valuation of a stock whose current dividend is $1.00 per year if dividends are expected to grow at a constant rate of 10 percent over a long period of time and the investor's required return is 15 percent?A) $20B) $11C) $22D) $7.33E) $4.40Answer: CTopic: Chapter 13.2 Computing the Price of Common StockQuestion Status: Previous Edition23) Holding other things constant, a stock's value will be highest if its dividend growth rate isA) 15%.B) 10%.C) 5%.D) 2%.Answer: ATopic: Chapter 13.2 Computing the Price of Common StockQuestion Status: Previous Edition24) Holding other things constant, a stock's value will be highest if its most recent dividend isA) $2.00.B) $5.00.C) $0.50.D) $1.00.Answer: BTopic: Chapter 13.2 Computing the Price of Common StockQuestion Status: Previous Edition25) Holding other things constant, a stock's value will be highest if the investor's required return on investments in equity isA) 20%.B) 15%.C) 10%.D) 5%.Answer: DTopic: Chapter 13.2 Computing the Price of Common Stock Question Status: Previous Edition26) Suppose the average industry PE ratio for auto parts retailers is 20. What is the current price of Auto Zone stock if the retailer's earnings per share is projected to be $1.85?A) $21.85B) $37C) $10.81D) $9.25Answer: BTopic: Chapter 13.2 Computing the Price of Common StockQuestion Status: Previous Edition27) Which of the following is true regarding the Gordon growth model?A) Dividends are assumed to grow at a constant rate forever.B) The dividend growth rate is assumed to be greater than the required return on equity.C) Both A and B of the above.D) Neither A nor B of the above.Answer: ATopic: Chapter 13.2 Computing the Price of Common StockQuestion Status: Previous Edition28) The PE ratio approach to valuing stock is especially useful for valuingA) privately held firms.B) firms that don't pay dividends.C) both A and B of the above.D) neither A nor B of the above.Answer: CTopic: Chapter 13.2 Computing the Price of Common StockQuestion Status: Previous Edition29) The PE ratio approach to valuing stock is especially useful for valuingA) publicly held corporations.B) firms that regularly pay dividends.C) both A and B of the above.D) neither A nor B of the above.Answer: DTopic: Chapter 13.2 Computing the Price of Common StockQuestion Status: Previous Edition30) A weakness of the PE approach to valuing stock is that it isA) difficult to estimate the constant growth rate of a firm's dividends.B) difficult to estimate the required return on equity.C) difficult to predict how much a firm will pay in dividends.D) based on industry averages rather than firm-specific factors.Answer: DTopic: Chapter 13.2 Computing the Price of Common Stock Question Status: Previous Edition31) (I) The market price of a security at a given time is the highest value any investor puts on the security. (II) Superior information about a security increases its value by reducing its risk.A) (I) is true, (II) is false.B) (I) is false, (II) is true.C) Both are true.D) Both are false.Answer: BTopic: Chapter 13.2 Computing the Price of Common StockQuestion Status: Previous Edition32) The main cause of fluctuations in stock prices is changes inA) tax laws.B) errors in technical stock analysis.C) daily trading volume in stock markets.D) information available to investors.E) total household wealth in the economy.Answer: DTopic: Chapter 13.3 How the Market Sets Security PricesQuestion Status: Previous Edition33) Stock values computed by valuation models may differ from actual market prices because it is difficult toA) estimate future dividend growth rates.B) estimate the risk of a stock.C) forecast a stock's future dividends.D) all of the above are true.Answer: DTopic: Chapter 13.4 Errors in ValuationQuestion Status: Previous Edition34) The 2001 terrorist attacks and the Enron financial scandal caused anticipated dividend growth to ________, investors' required return on equity to ________, and stock prices to ________.A) decrease; increase; decreaseB) decrease; increase; increaseC) increase; decrease; decreaseD) increase; decrease; increaseAnswer: ATopic: Chapter 13.4 Errors in ValuationQuestion Status: Previous Edition35) Which of the following is not an objective of the Securities and Exchange Commission?A) Maintain integrity of the securities marketsB) Advise investors about which particular stocks are good buysC) Require firms to provide specific information to investorsD) Regulate major participants in securities marketsAnswer: BTopic: Chapter 13.6 Regulation of the Stock MarketQuestion Status: Previous Edition36) A share of common stock in a firm represents an ownership interest in that firm and allows stockholders toA) vote.B) receive dividends.C) receive interest payments.D) only A and B of the above.Answer: DTopic: Chapter 13.1 Investing in StocksQuestion Status: Previous Edition37) In 2013, the NYSE traded ________ shares on an average trading day.A) 4 billionB) 7 billionC) 10 billionD) 12 billionAnswer: ATopic: Chapter 13.1 Investing in StocksQuestion Status: Updated from Previous Edition38) Exchange traded funds (ETFs) have which of the following features?A) They are listed and traded as individual stocks on a stock exchange.B) They are indexed rather than actively managed.C) Their value is based on the underlying net asset value of the stocks held in the index basket.D) All of the above.Answer: DTopic: Chapter 13.1 Investing in StocksQuestion Status: Previous Edition39) What is the primary disadvantage of an ETF?A) ETFs tend to have lower management fees than comparable index mutual bonds.B) ETFs usually have no minimum investment amount.C) Investors have to pay a broker commission each time they buy or sell shares.D) None of the above are disadvantages of an ETF.Answer: CTopic: Chapter 13.1 Investing in Stocks Question Status: Previous Edition40) A high price earnings ratio (PE) gives what interpretation?A) The market expects earnings to fall in the future.B) The market feels the firm's earnings are very high risk and are willing to pay a premium for them.C) The market expects the earnings to rise in the future.D) The firm is not paying a dividend.Answer: CTopic: Chapter 13.2 Computing the Price of Common StockQuestion Status: Previous Edition41) A ________ PE may indicate that the market feels the firm's earnings are very ________ risk and is therefore willing to pay a ________ for them.A) high; low; premiumB) high; high; discountC) low; low; discountD) high; high; premiumAnswer: ATopic: Chapter 13.2 Computing the Price of Common StockQuestion Status: Previous Edition42) The subprime financial crisis led to one of the worst bear markets in the last 50 years. Stock prices likely fell due toA) an increase in required returns on equity investments.B) a decline in growth prospects for U.S. companies.C) Both A and B are likely reasons.D) None of the above are correct.Answer: ATopic: Chapter 13.4 Errors in ValuationQuestion Status: New Question43) The Securities Acts of 1933 and 1934 established the S.E.C. to enforce which of the follow laws?A) Require firms to tell the public the truth about their businesses.B) Require brokers, dealers, and exchanges to treat investors fairly.C) To ensure that no investment ever loses money.D) All of the above are laws the S.E.C. enforces.E) A and B above are laws the S.E.C. enforces.Answer: ETopic: Chapter 13.6 Regulation of the Stock MarketQuestion Status: New Question44) Which of the following is not a division of the S.E.C.?A) The Division of Fraud InvestigationB) The Division of Corporate FinanceC) The Division of Market RegulationD) The Division of Investment ManagementE) The Division of EnforcementAnswer: ATopic: Chapter 13.6 Regulation of the Stock MarketQuestion Status: New Question13.2 True/False1) More stock trading in the U.S. occurs in over-the-counter markets rather than on organized exchanges.Answer: FALSETopic: Chapter 13.1 Investing in StocksQuestion Status: Previous Edition2) In over-the-counter markets, dealers increase the liquidity of thinly traded securities.Answer: TRUETopic: Chapter 13.1 Investing in StocksQuestion Status: Previous Edition3) Electronic Communications Networks apply technology to make organized exchanges more efficient and speedy.Answer: FALSETopic: Chapter 13.1 Investing in StocksQuestion Status: Previous Edition4) All stocks pay dividends, as that is the only way an investor can profit from holding stock.Answer: FALSETopic: Chapter 13.1 Investing in StocksQuestion Status: Previous Edition5) Common stock is the riskiest corporate security, followed by preferred stock and then bonds.Answer: TRUETopic: Chapter 13.1 Investing in StocksQuestion Status: Previous Edition6) The Enron financial scandal increased uncertainty about the quality of accounting information and as a result, increased required return on investment in stocks. Answer: TRUETopic: Chapter 13.4 Errors in Valuation Question Status: Previous Edition7) The Dow Jones Industrial Average is the broadest and best indicator of the stock market's day-to-day performance.Answer: FALSETopic: Chapter 13.4 Stock Market IndexesQuestion Status: Previous Edition8) The Securities and Exchange Commission requires firms to submit various documents to increase the flow of information to investors but does not verify the accuracy of that information.Answer: TRUETopic: Chapter 13.6 Regulation of the Stock MarketQuestion Status: Previous Edition9) About half of new equity issues are preferred stock.Answer: FALSETopic: Chapter 13.1 Investing in StocksQuestion Status: Previous Edition10) A stock's market value will be higher the higher its expected dividend stream is, all else being equal.Answer: TRUETopic: Chapter 13.2 Computing the Price of Common StockQuestion Status: Previous Edition11) The Gordon growth model assumes that a stock's dividend grows at a constant rate forever.Answer: TRUETopic: Chapter 13.2 Computing the Price of Common StockQuestion Status: Previous Edition12) A stock's market value will be higher the higher the investor's required rate of return is, all else being equal.Answer: FALSETopic: Chapter 13.2 Computing the Price of Common StockQuestion Status: Previous Edition13) A lower than average PE may mean that the market expects earnings to rise in the future.Answer: FALSETopic: Chapter 13.2 Computing the Price of Common StockQuestion Status: Previous Edition14) About 75% of orders to buy or sell on the NYSE are executed using SuperDOT. Answer: TRUETopic: Chapter 13.1 Investing in StocksQuestion Status: Updated from Previous Edition13.3 Essay1) How do corporate stocks differ from bonds?Topic: Chapter 13.1 Investing in StocksQuestion Status: Previous Edition2) How do common stocks differ from preferred stocks?Topic: Chapter 13.1 Investing in StocksQuestion Status: Previous Edition3) How do over-the-counter markets differ from organized exchanges?Topic: Chapter 13.1 Investing in StocksQuestion Status: Previous Edition4) What is the role of specialists on a stock exchange?Topic: Chapter 13.1 Investing in StocksQuestion Status: Previous Edition5) What are the advantages and disadvantages of Electronic Communications Networks (ECNs) for trading stocks?Topic: Chapter 13.1 Investing in StocksQuestion Status: Previous Edition6) What is the role of the required return on equity investments in stock valuation models?Topic: Chapter 13.2 Computing the Price of Common StockQuestion Status: Previous Edition7) Using the Gordon growth model, explain why the 2001 terrorist attacks and the Enron financial scandal caused stock prices to decline.Topic: Chapter 13.2 Computing the Price of Common StockQuestion Status: Previous Edition8) What are American Depository Receipts (ADRs)?Topic: Chapter 13.5 Buying Foreign StocksQuestion Status: Previous Edition9) What are the objectives of the Securities and Exchange Commission?Topic: Chapter 13.6 Regulation of the Stock MarketQuestion Status: Previous Edition10) What are the advantages and disadvantages of exchange traded funds (ETFs) fro trading stocks?Topic: Chapter 13.1 Investing in StocksQuestion Status: Previous Edition11) Why would a crisis in the subprime mortgage market lead to declining prices in the U.S. equity markets?Topic: Chapter 13.4 Errors in ValuationQuestion Status: New Question。