金融市场与金融机构英文版第二章练习题

基本训练一、概念题１、同业拆借市场：又称同业拆放市场,是指各类金融机构之间进行短期资金拆借活动而形成的市场,其交易对象为各金融机构的多余头寸。

2、票据市场：指在商品交易和资金往来过程中产生的,以汇票、本票及支票的发行、担保、承兑、贴现、转贴现、再贴现等方式来实现短期资金融通的市场。

３、贴现:是指持票人为了取得现款，将未到期已承兑汇票，以支付自贴现日起至票据到期日止的利息为条件,向银行所作的票据转让,银行扣减贴息,支付给持票人现款的行为。

４、转贴现：是指银行将已贴现的承兑汇票，以支付自贴现日起至票据到期日止的利息为条件,向其他金融机构所作的票据转让行为。

5、再贴现:是商业银行和其他金融机构,以其持有的未到期汇票，向中央银行所作的票据转让行为。

6、大额可转让定期存单:简称CD，是有固定面额的、由银行发给存款人按一定期限和约定利率计息，到期前可以流通转让的证券化存款凭证。

二、填空题１、衡量货币市场的效率主要有三个指标,即货币市场的、和。

(广度;深度；弹性)２、金融机构追求、和相统一的经营目标，是同业拆借市场形成和发展的内在动力。

(安全性;流动性；盈利性)3、银行是世界上最早实行存款准备金制度的中央银行。

(英格兰银行)４、作为金融机构最重要的基准利率之一, 利率基本代表了市场资金的价格，许多浮动利率的融资工具在发行时都以它作为浮动的依据和参照。

（同业拆借市场）5、我国同业拆借市场的兴起源于80年代制度的改革。

（信贷资金管理）6、按发行主体划分，票据市场可分为和。

（银行票据市场；商业票据市场)7、商业票据是大公司为筹措资金,以方式出售给投资者的一种短期无承偌凭证。

（贴现；担保）8、商业票据间接发行方式主要有三种形式,即、和。

（助销发行、代销发行、招标发行)三、单项选择题1、货币市场最基本的功能是( A )。

A．调剂资金余缺,满足短期融资需要 B．为各种信用形式的发展创造条件Ｃ.为政府宏观政策调控提供条件和场所 D．有利于企业重组2、同业拆借市场利率是市场的( Ｂ )，对整个经济活动和宏观调控具有重要的意义。

Chapter 2 Overview of the Financial System2.1 Single Choice1) Every financial market performs the following function: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.2) Financial markets have the basic function ofA) bringing together people with funds to lend and people who want to borrow funds.B) assuring that the swings in the business cycle are less pronounced.C) assuring that governments need never resort to printing money.D) both A and B of the above.E) both B and C of the above.3) Which of the following can be described as involving direct finance?A) A corporation's stock is traded in an over-the-counter market.B) People buy shares in a mutual fund.C) A pension fund manager buys commercial paper in the secondary market.D) An insurance company buys shares of common stock in the over-the-counter markets.E) None of the above.4) Which of the following can be described as involving direct finance?A) A corporation's stock is traded in an over-the-counter market.B) A corporation buys commercial paper issued by another corporation.C) A pension fund manager buys commercial paper from the issuing corporation.D) Both A and B of the above.E) Both B and C of the above.5) Which of the following can be described as involving indirect finance?A) A corporation takes out loans from a bank.B) People buy shares in a mutual fund.C) A corporation buys commercial paper in a secondary market.D) All of the above.E) Only A and B of the above.6) Which of the following can be described as involving indirect finance?A) A bank buys a U.S. Treasury bill from one of its depositors.B) A corporation buys commercial paper issued by another corporation.C) A pension fund manager buys commercial paper in the primary market.D) Both A and C of the above.7) Financial markets improve economic welfare becauseA) they allow funds to move from those without productive investment opportunities to those who have such opportunities.B) they allow consumers to time their purchases better.C) they weed out inefficient firms.D) they do all of the above.E) they do A and B of the above.8) A country whose financial markets function poorly is likely toA) efficiently allocate its capital resources.B) enjoy high productivity.C) experience economic hardship and financial crises.D) increase its standard of living.9) Which of the following are securities?A) A certificate of depositB) A share of Texaco common stockC) A Treasury billD) All of the aboveE) Only A and B of the above10) Which of the following statements about the characteristics of debt and equity are true?A) They both can be long-term financial instruments.B) They both involve a claim on the issuer's income.C) They both enable a corporation to raise funds.D) All of the above.E) Only A and B of the above.11) The money market is the market in which _________ are traded.A) new issues of securitiesB) previously issued securitiesC) short-term debt instrumentsD) long-term debt and equity instruments12) Long-term debt and equity instruments are traded in the _________ market.A) primaryB) secondaryC) capitalD) money13) Which of the following are primary markets?A) The New York Stock ExchangeB) The U.S. government bond marketC) The over-the-counter stock marketD) The options marketsE) None of the above14) Which of the following are secondary markets?A) The New York Stock ExchangeB) The U.S. government bond marketC) The over-the-counter stock marketD) The options marketsE) All of the above15) 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.16) Intermediaries who are agents of investors and match buyers with sellers of securities are calledA) investment bankers.B) traders.C) brokers.D) dealers.E) none of the above.17) Intermediaries who link buyers and sellers by buying and selling securities at stated prices are calledA) investment bankers.B) traders.C) brokers.D) dealers.E) none of the above.18) 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.19) Which of the following statements about financial markets and securities are true?A) Most common stocks are traded over-the-counter, although the largest corporations have their shares traded at organized stock exchanges such as the New York Stock Exchange.B) A corporation acquires new funds only when its securities are sold in the primary market.C) Money market securities are usually more widely traded than longer-term securities and so tendto be more liquid.D) All of the above are true.E) Only A and B of the above are true.20) Which of the following statements about financial markets and securities are true?A) A bond is a long-term security that promises to make periodic payments called dividends to the firm's residual claimants.B) A debt instrument is intermediate term if its maturity is less than one year.C) A debt instrument is long term if its maturity is ten years or longer.D) The maturity of a debt instrument is the time (term) that has elapsed since it was issued.21) Which of the following statements about financial markets and securities are true?A) Few common stocks are traded over-the-counter, although the over-the-counter markets have grown in recent years.B) A corporation acquires new funds only when its securities are sold in the primary market.C) Capital market securities are usually more widely traded than longer term securities and so tend to be more liquid.D) All of the above are true.E) Only A and B of the above are true.22) Which of the following markets is sometimes organized as an over-the-counter market?A) The stock marketB) The bond marketC) The foreign exchange marketD) The federal funds marketE) all of the above23) Bonds that are sold in a foreign country and are denominated in that country's currency are known asA) foreign bonds.B) Eurobonds.C) Eurocurrencies.D) Eurodollars.24) Bonds that are sold in a foreign country and are denominated in a currency other than that of the country in which they are sold are known asA) foreign bonds.B) Eurobonds.C) Eurocurrencies.D) Eurodollars.25) Financial intermediariesA) exist because there are substantial information and transaction costs in the economy.B) improve the lot of the small saver.C) are involved in the process of indirect finance.D) do all of the above.E) do only A and B of the above.26) The main sources of financing for businesses, in order of importance, areA) financial intermediaries, issuing bonds, issuing stocks.B) issuing bonds, issuing stocks, financial intermediaries.C) issuing stocks, issuing bonds, financial intermediaries.D) issuing stocks, financial intermediaries, issuing bonds.27) The presence of transaction costs in financial markets explains, in part, whyA) financial intermediaries and indirect finance play such an important role in financial markets.B) equity and bond financing play such an important role in financial markets.C) corporations get more funds through equity financing than they get from financial intermediaries.D) direct financing is more important than indirect financing as a source of funds.28) Financial intermediaries can substantially reduce transaction costs per dollar of transactions because their large size allows them to take advantage ofA) poorly informed consumers.B) standardization.C) economies of scale.D) their market power.29) The purpose of diversification is toA) reduce the volatility of a portfolio's return.B) raise the volatility of a portfolio's return.C) reduce the average return on a portfolio.D) raise the average return on a portfolio.30) An investor who puts all her funds into one asset _________ her portfolio's _________.A) increases; diversificationB) decreases; diversificationC) increases; average returnD) decreases; average return31) Through risk-sharing activities, a financial intermediary _________ its own risk and _________ the risks of its customers.A) reduces; increasesB) increases; reducesC) reduces; reducesD) increases; increases32) The presence of _________ in financial markets leads to adverse selection and moral hazardproblems that interfere with the efficient functioning of financial markets.A) noncollateralized riskB) free-ridingC) asymmetric informationD) costly state verification33) When the lender and the borrower have different amounts of information regarding a transaction, _________ is said to exist.A) asymmetric informationB) adverse selectionC) moral hazardD) fraud34) When the potential borrowers who are the most likely to default are the ones most actively seeking a loan, _________ is said to exist.A) asymmetric informationB) adverse selectionC) moral hazardD) fraud35) When the borrower engages in activities that make it less likely that the loan will be repaid, _________ is said to exist.A) asymmetric informationB) adverse selectionC) moral hazardD) fraud36) The concept of adverse selection helps to explainA) which firms are more likely to obtain funds from banks and other financial intermediaries, rather than from the securities markets.B) why indirect finance is more important than direct finance as a source of business finance.C) why direct finance is more important than indirect finance as a source of business finance.D) only A and B of the above.E) only A and C of the above.37) Adverse selection is a problem associated with equity and debt contracts arising fromA) the lender's relative lack of information about the borrower's potential returns and risks of his investment activities.B) the lender's inability to legally require sufficient collateral to cover a 100 percent loss if the borrower defaults.C) the borrower's lack of incentive to seek a loan for highly risky investments.D) none of the above.38) When the least desirable credit risks are the ones most likely to seek loans, lenders are subjectto theA) moral hazard problem.B) adverse selection problem.C) shirking problem.D) free-rider problem.E) principal-agent problem.39) Financial institutions expect thatA) moral hazard will occur, as the least desirable credit risks will be the ones most likely to seek out loans.B) opportunistic behavior will occur, as the least desirable credit risks will be the ones most likely to seek out loans.C) borrowers will commit moral hazard by taking on too much risk, and this is what drives financial institutions to take steps to limit moral hazard.D) none of the above will occur.40) Successful financial intermediaries have higher earnings on their investments because they are better equipped than individuals to screen out good from bad risks, thereby reducing losses due toA) moral hazard.B) adverse selection.C) bad luck.D) financial panics.41) In financial markets, lenders typically have inferior information about potential returns and risks associated with any investment project. This difference in information is calledA) comparative informational disadvantage.B) asymmetric information.C) variant information.D) caveat venditor.42) The largest depository institution at the end of 2004 wasA) life insurance companies.B) pension funds.C) state retirement funds.D) none of the above.43) Which of the following financial intermediaries are depository institutions?A) A savings and loan associationB) A commercial bankC) A credit unionD) All of the aboveE) Only A and C of the above44) Which of the following is a contractual savings institution?A) A life insurance companyB) A credit unionC) A savings and loan associationD) A mutual fund45) Which of the following are not investment intermediaries?A) A life insurance companyB) A pension fundC) A mutual fundD) Only A and B of the above46) Which of the following are investment intermediaries?A) Finance companiesB) Mutual fundsC) Pension fundsD) All of the aboveE) Only A and B of the above47) The government regulates financial markets for three main reasons:A) to ensure soundness of the financial system, to improve control of monetary policy, and to increase the information available to investors.B) to improve control of monetary policy, to ensure that financial intermediaries earn a normal rate of return, and to increase the information available to investors.C) to ensure that financial intermediaries do not earn more than the normal rate of return, to ensure soundness of the financial system, and to improve control of monetary policy.D) to ensure soundness of financial intermediaries, to increase the information available to investors, and to prevent financial intermediaries from earning less than the normal rate of return.48) Which of the following government regulations has the chief purpose of improving control of the money supply?A) deposit insuranceB) restrictions on entry into banking or insuranceC) reserve requirementsD) restrictions on the assets financial intermediaries can hold49) Asymmetric information can lead to widespread collapse of financial intermediaries, referred to as aA) bank holiday.B) financial panic.C) financial disintermediation.D) financial collapse.50) Foreign currencies that are deposited in banks outside the home country are known asA) foreign bonds.B) Eurobond.C) Eurocurrencies.D) Eurodollars.51) U.S. dollars deposited in foreign banks outside the United States or in foreign branches of U.S. are referred to asA) Eurodollars.B) Eurocurrencies.C) Eurobonds.D) foreign bonds.52) Banks providing depositors with checking accounts that enable them to pay their bills easily is known asA) liquidity services.B) asset transformation.C) risk sharing.D) transaction costs.53) A ________ is when one party in a financial contract has incentives to act in its own interest rather than in the interests of the other party.A) moral hazardB) riskC) conflict of interestD) financial panic54) Fire and casualty insurance companies are what type of intermediary?A) Contractual savings institutionB) Depository institutionsC) Investment intermediariesD) None of the above55) The country whose banks are the most restricted in the range of assets they may hold isA) Japan.B) Canada.C) Germany.D) the United States.答案：1-5：DAEBE 6-10:DECDD 11-15:CCEEB 16-20:CDADC 21-25:BEABD 26-30:AACAB 31-35:BCABC 36-40:DABCB 41-45:BDDAD 46-50:EACBC 51-55:AACAD。

Chapter 2 Overview of the Financial System2.1 Single Choice1)Every financial market performs the following function: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.2)Financial markets have the basic function ofA)bringing together people with funds to lend and people who want to borrow funds.B)assuring that the swings in the business cycle are less pronounced.C)assuring that governments need never resort to printing money.D)both A and B of the above.E)both B and C of the above.3)Which of the following can be described as involving direct finance?A)A corporation's stock is traded in an over-the-counter market.B)People buy shares in a mutual fund.C)A pension fund manager buys commercial paper in the secondary market.D)An insurance company buys shares of common stock in the over-the-counter markets.E)None of the above.4)Which of the following can be described as involving direct finance?A)A corporation's stock is traded in an over-the-counter market.B)A corporation buys commercial paper issued by another corporation.C)A pension fund manager buys commercial paper from the issuing corporation.D)Both A and B of the above.E)Both B and C of the above.5)Which of the following can be described as involving indirect finance?A)A corporation takes out loans from a bank.B)People buy shares in a mutual fund.C)A corporation buys commercial paper in a secondary market.D)All of the above.E)Only A and B of the above.6)Which of the following can be described as involving indirect finance?A)A bank buys a U.S. Treasury bill from one of its depositors.B)A corporation buys commercial paper issued by another corporation.C)A pension fund manager buys commercial paper in the primary market.D)Both A and C of the above.7)Financial markets improve economic welfare becauseA)they allow funds to move from those without productive investment opportunities to those who have such opportunities.B)they allow consumers to time their purchases better.C)they weed out inefficient firms.D)they do all of the above.E)they do A and B of the above.8)A country whose financial markets function poorly is likely toA)efficiently allocate its capital resources.B)enjoy high productivity.C)experience economic hardship and financial crises.D)increase its standard of living.9)Which of the following are securities?A)A certificate of depositB)A share of Texaco common stockC)A Treasury billD)All of the aboveE)Only A and B of the above10)Which of the following statements about the characteristics of debt and equity are true?A)They both can be long-term financial instruments.B)They both involve a claim on the issuer's income.C)They both enable a corporation to raise funds.D)All of the above.E)Only A and B of the above.11)The money market is the market in which are traded.A)new issues of securitiesB)previously issued securitiesC)short-term debt instrumentsD)long-term debt and equity instruments12)Long-term debt and equity instruments are traded in the market.A)primaryB)secondaryC)capitalD)money13)Which of the following are primary markets?A)The New York Stock ExchangeB)The U.S. government bond marketC)The over-the-counter stock marketD)The options marketsE)None of the above14)Which of the following are secondary markets?A)The New York Stock ExchangeB)The U.S. government bond marketC)The over-the-counter stock marketD)The options marketsE)All of the above15)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.16)Intermediaries who are agents of investors and match buyers with sellers of securities are calledA)investment bankers.B)traders.C)brokers.D)dealers.E)none of the above.17)Intermediaries who link buyers and sellers by buying and selling securities at stated prices are calledA)investment bankers.B)traders.C)brokers.D)dealers.E)none of the above.18)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.19)Which of the following statements about financial markets and securities are true?A)Most common stocks are traded over-the-counter, although the largest corporations have their shares traded at organized stock exchanges such as the New York Stock Exchange.B)A corporation acquires new funds only when its securities are sold in the primary market.C)Money market securities are usually more widely traded than longer-term securities and so tendto be more liquid.D)All of the above are true.E)Only A and B of the above are true.20)Which of the following statements about financial markets and securities are true?A)A bond is a long-term security that promises to make periodic payments called dividends to the firm's residual claimants.B)A debt instrument is intermediate term if its maturity is less than one year.C)A debt instrument is long term if its maturity is ten years or longer.D)The maturity of a debt instrument is the time (term) that has elapsed since it was issued.21)Which of the following statements about financial markets and securities are true?A)Few common stocks are traded over-the-counter, although the over-the-counter markets have grown in recent years.B)A corporation acquires new funds only when its securities are sold in the primary market.C)Capital market securities are usually more widely traded than longer term securities and so tend to be more liquid.D)All of the above are true.E)Only A and B of the above are true.22)Which of the following markets is sometimes organized as an over-the-counter market?A)The stock marketB)The bond marketC)The foreign exchange marketD)The federal funds marketE)all of the above23)Bonds that are sold in a foreign country and are denominated in that country's currency are known asA)foreign bonds.B)Eurobonds.C)Eurocurrencies.D)Eurodollars.24)Bonds that are sold in a foreign country and are denominated in a currency other than that of the country in which they are sold are known asA)foreign bonds.B)Eurobonds.C)Eurocurrencies.D)Eurodollars.25)Financial intermediariesA)exist because there are substantial information and transaction costs in the economy.B)improve the lot of the small saver.C)are involved in the process of indirect finance.D)do all of the above.E)do only A and B of the above.26)The main sources of financing for businesses, in order of importance, areA)financial intermediaries, issuing bonds, issuing stocks.B)issuing bonds, issuing stocks, financial intermediaries.C)issuing stocks, issuing bonds, financial intermediaries.D)issuing stocks, financial intermediaries, issuing bonds.27)The presence of transaction costs in financial markets explains, in part, whyA)financial intermediaries and indirect finance play such an important role in financial markets.B)equity and bond financing play such an important role in financial markets.C)corporations get more funds through equity financing than they get from financial intermediaries.D)direct financing is more important than indirect financing as a source of funds.28)Financial intermediaries can substantially reduce transaction costs per dollar of transactions because their large size allows them to take advantage ofA)poorly informed consumers.B)standardization.C)economies of scale.D)their market power.29)The purpose of diversification is toA)reduce the volatility of a portfolio's return.B)raise the volatility of a portfolio's return.C)reduce the average return on a portfolio.D)raise the average return on a portfolio.30)An investor who puts all her funds into one asset her portfolio's .A)increases; diversificationB)decreases; diversificationC)increases; average returnD)decreases; average return31)Through risk-sharing activities, a financial intermediary its own risk andthe risks of its customers.A)reduces; increasesB)increases; reducesC)reduces; reducesD)increases; increases32)The presence of in financial markets leads to adverse selection and moral hazardproblems that interfere with the efficient functioning of financial markets.A)noncollateralized riskB)free-ridingC)asymmetric informationD)costly state verification33)When the lender and the borrower have different amounts of information regarding a transaction, is said to exist.A)asymmetric informationB)adverse selectionC)moral hazardD)fraud34)When the potential borrowers who are the most likely to default are the ones most actively seeking a loan, is said to exist.A)asymmetric informationB)adverse selectionC)moral hazardD)fraud35)When the borrower engages in activities that make it less likely that the loan will be repaid,is said to exist.A)asymmetric informationB)adverse selectionC)moral hazardD)fraud36)The concept of adverse selection helps to explainA)which firms are more likely to obtain funds from banks and other financial intermediaries, rather than from the securities markets.B)why indirect finance is more important than direct finance as a source of business finance.C)why direct finance is more important than indirect finance as a source of business finance.D)only A and B of the above.E)only A and C of the above.37)Adverse selection is a problem associated with equity and debt contracts arising fromA)the lender's relative lack of information about the borrower's potential returns and risks of his investment activities.B)the lender's inability to legally require sufficient collateral to cover a 100 percent loss if the borrower defaults.C)the borrower's lack of incentive to seek a loan for highly risky investments.D)none of the above.38)When the least desirable credit risks are the ones most likely to seek loans, lenders are subjectto theA)moral hazard problem.B)adverse selection problem.C)shirking problem.D)free-rider problem.E)principal-agent problem.39)Financial institutions expect thatA)moral hazard will occur, as the least desirable credit risks will be the ones most likely to seek out loans.B)opportunistic behavior will occur, as the least desirable credit risks will be the ones most likely to seek out loans.C)borrowers will commit moral hazard by taking on too much risk, and this is what drives financial institutions to take steps to limit moral hazard.D)none of the above will occur.40)Successful financial intermediaries have higher earnings on their investments because they are better equipped than individuals to screen out good from bad risks, thereby reducing losses due toA)moral hazard.B)adverse selection.C)bad luck.D)financial panics.41)In financial markets, lenders typically have inferior information about potential returns and risks associated with any investment project. This difference in information is calledA)comparative informational disadvantage.B)asymmetric information.C)variant information.D)caveat venditor.42)The largest depository institution at the end of 2004 wasA)life insurance companies.B)pension funds.C)state retirement funds.D)none of the above.43)Which of the following financial intermediaries are depository institutions?A)A savings and loan associationB)A commercial bankC)A credit unionD)All of the aboveE)Only A and C of the above44)Which of the following is a contractual savings institution?A)A life insurance companyB)A credit unionC)A savings and loan associationD)A mutual fund45)Which of the following are not investment intermediaries?A)A life insurance companyB)A pension fundC)A mutual fundD)Only A and B of the above46)Which of the following are investment intermediaries?A)Finance companiesB)Mutual fundsC)Pension fundsD)All of the aboveE)Only A and B of the above47)The government regulates financial markets for three main reasons:A)to ensure soundness of the financial system, to improve control of monetary policy, and to increase the information available to investors.B)to improve control of monetary policy, to ensure that financial intermediaries earn a normal rate of return, and to increase the information available to investors.C)to ensure that financial intermediaries do not earn more than the normal rate of return, to ensure soundness of the financial system, and to improve control of monetary policy.D)to ensure soundness of financial intermediaries, to increase the information available to investors, and to prevent financial intermediaries from earning less than the normal rate of return.48)Which of the following government regulations has the chief purpose of improving control of the money supply?A)deposit insuranceB)restrictions on entry into banking or insuranceC)reserve requirementsD)restrictions on the assets financial intermediaries can hold49)Asymmetric information can lead to widespread collapse of financial intermediaries, referred to as aA)bank holiday.B)financial panic.C)financial disintermediation.D)financial collapse.50)Foreign currencies that are deposited in banks outside the home country are known asA)foreign bonds.B)Eurobond.C)Eurocurrencies.D)Eurodollars.51)U.S. dollars deposited in foreign banks outside the United States or in foreign branches of U.S. are referred to asA)Eurodollars.B)Eurocurrencies.C)Eurobonds.D)foreign bonds.52)Banks providing depositors with checking accounts that enable them to pay their bills easily is known asA)liquidity services.B)asset transformation.C)risk sharing.D)transaction costs.53)A is when one party in a financial contract has incentives to act in its own interest rather than in the interests of the other party.A)moral hazardB)riskC)conflict of interestD)financial panic54)Fire and casualty insurance companies are what type of intermediary?A)Contractual savings institutionB)Depository institutionsC)Investment intermediariesD)None of the above55)The country whose banks are the most restricted in the range of assets they may hold isA)Japan.B)Canada.C)Germany.D)the United States.答案：1-5：DAEBE 6-10:DECDD 11-15:CCEEB 16-20:CDADC21-25:BEABD 41-45:BDDAD 26-30:AACAB46-50:EACBC31-35:BCABC51-55:AACAD36-40:DABCB。

金融英语练习题第二章The Demand for Money1. Irving Fisher took the view that the institutional features of the economy which affect velocity change _____ over time so that velocity will be fairly _____ in the short run.A) rapidly; erratic B) rapidly; stableC) slowly; stable D) slowly; erraticAnswer: C2. If the money supply is 600 and nominal income is 3,000, the velocity of money isA) 5. B) 50. C) 1/5. D) undefined.Answer: A3. According to the quantity theory of money demand,A) an increase in interest rates will cause the demand for money to fall.B) a decrease in interest rates will cause the demand for money to increase.C) interest rates have no effect on the demand for money.D) an increase in money will cause the demand for money to fall.Answer: C3. The Cambridge approach to the demand for money did not rule out theA) effects of interest rates on the demand for money.B) effects of wealth on the demand for money.C) effects of income on the demand for money.D) effects of any of the above.Answer: D4. Velocity, over the business cycle, tends toA) rise during economic contractions. B) fall during economic expansion.C) stay constant. D) fall during economic contractions. Answer: D5. Keynes's liquidity preference theory indicates that the demand for moneyA) is purely a function of income, and interest rates have no effect on the demand for money.B) is purely a function of interest rates, and income has no effect on the demand for money.C) is both a function of income and interest rates.D) is both a function of government spending and income.Answer: C6. Keynes's argued that when interest rates were high relative to some normal value, people would expect bond prices to _____ so the quantity of money demanded would _____.A) increase; increase B) increase; decreaseC) decrease; decrease D) decrease; increaseAnswer: B7. Keynes's model of the demand for money suggests that velocity is _____ related to _____.A) positively; interest rates B) negatively; interest ratesC) positively; bond values D) positively; stock pricesAnswer: A8. The Baumol-Tobin analysis suggests that a decrease in the brokerage fee for buying and selling bonds will cause the demand for money to _____ and the demand for bonds to _____.A) increase; increase B) increase; decreaseC) decrease; decrease D) decrease; increaseAnswer: D9. Friedman's assumption that money and goods are substitutes indicates thatA) changes in the money supply have only indirect effects on aggregate spending.B) changes in the money supply may have a direct effect on aggregate spending.C) interest rates have no effect on money demand, implying the velocity is constant.D) both (b) and (c) of the above are true.Answer: B10. Irving Fisher's view that velocity is fairly constant in the short run transforms the equation ofexchange into theA) Cambridge theory of income determination.B) quantity theory of money.C) Keynesian theory of income determination.D) monetary theory of income determination.Answer: B11. In the 20th century, velocityA) has been quite stable over periods as long as a decade.B) has grown at a constant rate.C) has been quite volatile.D) both (a) and (b) of the above.Answer: C12. Because interest rates have substantial fluctuations, the _____ theory of the demand for moneyindicates that velocity has substantial fluctuations as well.A) classical B) Cambridge C) liquidity preference D) Pigouvian Answer: C13. In the Baumol-Tobin analysis, the transactions demandfor money isA) negatively related to the level of income.B) negatively related to the level of interest rates.C) positively related to the expected return on other assets.D) only (a) and (b) of the above.14. In the Baumol-Tobin analysis, the transactions demand for money isA) negatively related to the level of interest rates.B) negatively related to the expected return on other assets.C) positively related to the expected return on other assets.D) only (a) and (b) of the above.Answer: D15. The Baumol-T obin analysis suggests that an increase in the brokerage fee for buying andselling bonds will cause the demand for money to ________ and the demand for bonds to ________.A) increase; increase B) increase; decreaseC) decrease; increase D) decrease; decreaseAnswer: B16. If interest rates do not affect the demand for money, then velocity is _____ likely to be _____.A) more; stable B) more; unstable C) more; procyclical D) less; stable Answer: A17. People will want to buy more when theA) price level rises, because the interest rate rises.B) price level rises, because the interest rate falls.C) price level falls, because the interest rate rises.D) price level falls, because the interest rate falls.18. A decrease in U.S. interest rates leads toA) a depreciation of the dollar that leads to greater netexports.B) a depreciation of the dollar that leads to smaller net exports.C) an appreciation of the dollar that leads to greater net exports.D) an appreciation of the dollar that leads to smaller net exports.19. Other things the same, as the price level falls, a country's exchange rateA) and interest rates rise.B) and interest rates fall.C) falls and interest rates rise.D) rises and interest rates fall.20. Which of the following will both make people spend more?A) wealth and interest rates rise.B) wealth rises and interest rates fall.C) wealth falls and interest rates rise.D) wealth falls and interest rates fall.21. An increase in the interest rate causes investment toA) rise and the exchange rate to appreciate.B) fall and the exchange rate to depreciate.C) rise and the exchange rate to depreciate.D) fall and the exchange rate to appreciate.22. When taxes decrease, consumptionA) decreases as shown by a movement to the left along a given aggregate-demand curve.B) decreases as shown by a shift of the aggregate demand curve to the left.C) increases as shown by a movement to the right along agiven aggregate-demand curve.D) increases as shown by a shift of the aggregate demand curve to the right.23. When the money supply decreasesA) interest rates fall and so aggregate demand shifts right.B) interest rates fall and so aggregate demand shifts left.C) interest rates rise and so aggregate demand shifts right.D) interest rates rise and so aggregate demand shifts left.24. Aggregate demand shifts left when the governmentA) decreases taxes.B) cuts military expenditures.C) creates a new investment tax creditD) None of the above is correct.25. The long-run aggregate supply curve would shift right if the government were toA) increase the minimum-wage.B) make unemployment benefits more generous.C) raise taxes on investment spending.D) None of the above is correct.26. The long-run aggregate supply curve shifts right ifA) the price level rises.B) the price level falls.C) the capital stock increases.D) the capital stock decreases.答案：DABBDDDBDC27. Other things the same, if workers and firms expected prices to rise by 2 percent but instead they rise by 3 percent, thenA) employment and production rise.B) employment rises and production falls.C) employment falls and production rises.D) employment and production fall.28. Other things the same, an unexpected fall in the price level results in some firms havingA) lower than desired prices which increases their sales.B) lower than desired prices which depresses their sales.C) higher than desired prices which increases their sales.D) higher than desired prices which depresses their sales.29. If the price level rises above what was expected and nominal wages are fixed, thenA) production becomes less profitable so firms will hire fewer workers.B) production becomes less profitable so firms will hire more workers.C) production becomes more profitable so firms will hire fewer workers.D) production become more profitable so firms will hire more workers.30. Of the following theories, which is consistent with a vertical long-run aggregate supply curve?A) the sticky-wage theoryB) misperceptions theoryC) both the sticky-wage and misperceptions theories.D) neither the sticky-wage nor the misperceptions theory.31. The effects of a higher than expected price level are shown byA) shifting the short-run aggregate supply curve right.B) shifting the short-run aggregate supply curve left.C) moving to the right along a given aggregate supply curve.D) moving to the left along a given aggregate supply curve.32. An increase in the expected price level shifts theA) short-run and long-run aggregate supply curves left.B) the short-run but not the long-run aggregate supply curve left.C) the long-run but not the short-run aggregate supply curve left.D) neither the long-run nor the short-run aggregate supply curve left.33. Which of the following shifts the short-run aggregate supply curve to the right?A) a decrease in the actual price levelB) an increase in the actual price levelC) a decrease in the expected price levelD) an increase in the expected price level34. Which of the following shifts short-run aggregate supply right?A) an increase in the price levelB) an increase in the minimum wageC) a decrease in the price of oilD) more people migrate abroad than immigrate from abroad35. Other things the same, if the price level rises by 2% and people were expecting it to rise by 5%, then some firms haveA) higher than desired prices which increases their sales.B) higher than desired prices which depresses their sales.C) lower than desired prices which increases their sales.D) lower than desired prices which depresses their sales.答案：ADDDCBCCB。

Chapter 2 Overview of the Financial System2.1 Single Choice1) Every financial market performs the following function: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.2) Financial markets have the basic function ofA) bringing together people with funds to lend and people who want to borrow funds.B) assuring that the swings in the business cycle are less pronounced.C) assuring that governments need never resort to printing money.D) both A and B of the above.E) both B and C of the above.3) Which of the following can be described as involving direct finance?A) A corporation's stock is traded in an over-the-counter market.B) People buy shares in a mutual fund.C) A pension fund manager buys commercial paper in the secondary market.D) An insurance company buys shares of common stock in the over-the-counter markets.E) None of the above.4) Which of the following can be described as involving direct finance?A) A corporation's stock is traded in an over-the-counter market.B) A corporation buys commercial paper issued by another corporation.C) A pension fund manager buys commercial paper from the issuing corporation.D) Both A and B of the above.E) Both B and C of the above.5) Which of the following can be described as involving indirect finance?A) A corporation takes out loans from a bank.B) People buy shares in a mutual fund.C) A corporation buys commercial paper in a secondary market.D) All of the above.E) Only A and B of the above.6) Which of the following can be described as involving indirect finance?A) A bank buys a U.S. Treasury bill from one of its depositors.B) A corporation buys commercial paper issued by another corporation.C) A pension fund manager buys commercial paper in the primary market.D) Both A and C of the above.7) Financial markets improve economic welfare becauseA) they allow funds to move from those without productive investment opportunities to those who have such opportunities.B) they allow consumers to time their purchases better.C) they weed out inefficient firms.D) they do all of the above.E) they do A and B of the above.8) A country whose financial markets function poorly is likely toA) efficiently allocate its capital resources.B) enjoy high productivity.C) experience economic hardship and financial crises.D) increase its standard of living.9) Which of the following are securities?A) A certificate of depositB) A share of Texaco common stockC) A Treasury billD) All of the aboveE) Only A and B of the above10) Which of the following statements about the characteristics of debt and equity are true?A) They both can be long-term financial instruments.B) They both involve a claim on the issuer's income.C) They both enable a corporation to raise funds.D) All of the above.E) Only A and B of the above.11) The money market is the market in which _________ are traded.A) new issues of securitiesB) previously issued securitiesC) short-term debt instrumentsD) long-term debt and equity instruments12) Long-term debt and equity instruments are traded in the _________ market.A) primaryB) secondaryC) capitalD) money13) Which of the following are primary markets?A) The New York Stock ExchangeB) The U.S. government bond marketC) The over-the-counter stock marketD) The options marketsE) None of the above14) Which of the following are secondary markets?A) The New York Stock ExchangeB) The U.S. government bond marketC) The over-the-counter stock marketD) The options marketsE) All of the above15) 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.16) Intermediaries who are agents of investors and match buyers with sellers of securities are calledA) investment bankers.B) traders.C) brokers.D) dealers.E) none of the above.17) Intermediaries who link buyers and sellers by buying and selling securities at stated prices are calledA) investment bankers.B) traders.C) brokers.D) dealers.E) none of the above.18) 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.19) Which of the following statements about financial markets and securities are true?A) Most common stocks are traded over-the-counter, although the largest corporations have their shares traded at organized stock exchanges such as the New York Stock Exchange.B) A corporation acquires new funds only when its securities are sold in the primary market.C) Money market securities are usually more widely traded than longer-term securities and so tendto be more liquid.D) All of the above are true.E) Only A and B of the above are true.20) Which of the following statements about financial markets and securities are true?A) A bond is a long-term security that promises to make periodic payments called dividends to the firm's residual claimants.B) A debt instrument is intermediate term if its maturity is less than one year.C) A debt instrument is long term if its maturity is ten years or longer.D) The maturity of a debt instrument is the time (term) that has elapsed since it was issued.21) Which of the following statements about financial markets and securities are true?A) Few common stocks are traded over-the-counter, although the over-the-counter markets have grown in recent years.B) A corporation acquires new funds only when its securities are sold in the primary market.C) Capital market securities are usually more widely traded than longer term securities and so tend to be more liquid.D) All of the above are true.E) Only A and B of the above are true.22) Which of the following markets is sometimes organized as an over-the-counter market?A) The stock marketB) The bond marketC) The foreign exchange marketD) The federal funds marketE) all of the above23) Bonds that are sold in a foreign country and are denominated in that country's currency are known asA) foreign bonds.B) Eurobonds.C) Eurocurrencies.D) Eurodollars.24) Bonds that are sold in a foreign country and are denominated in a currency other than that of the country in which they are sold are known asA) foreign bonds.B) Eurobonds.C) Eurocurrencies.D) Eurodollars.25) Financial intermediariesA) exist because there are substantial information and transaction costs in the economy.B) improve the lot of the small saver.C) are involved in the process of indirect finance.D) do all of the above.E) do only A and B of the above.26) The main sources of financing for businesses, in order of importance, areA) financial intermediaries, issuing bonds, issuing stocks.B) issuing bonds, issuing stocks, financial intermediaries.C) issuing stocks, issuing bonds, financial intermediaries.D) issuing stocks, financial intermediaries, issuing bonds.27) The presence of transaction costs in financial markets explains, in part, whyA) financial intermediaries and indirect finance play such an important role in financial markets.B) equity and bond financing play such an important role in financial markets.C) corporations get more funds through equity financing than they get from financial intermediaries.D) direct financing is more important than indirect financing as a source of funds.28) Financial intermediaries can substantially reduce transaction costs per dollar of transactions because their large size allows them to take advantage ofA) poorly informed consumers.B) standardization.C) economies of scale.D) their market power.29) The purpose of diversification is toA) reduce the volatility of a portfolio's return.B) raise the volatility of a portfolio's return.C) reduce the average return on a portfolio.D) raise the average return on a portfolio.30) An investor who puts all her funds into one asset _________ her portfolio's _________.A) increases; diversificationB) decreases; diversificationC) increases; average returnD) decreases; average return31) Through risk-sharing activities, a financial intermediary _________ its own risk and _________ the risks of its customers.A) reduces; increasesB) increases; reducesC) reduces; reducesD) increases; increases32) The presence of _________ in financial markets leads to adverse selection and moral hazardproblems that interfere with the efficient functioning of financial markets.A) noncollateralized riskB) free-ridingC) asymmetric informationD) costly state verification33) When the lender and the borrower have different amounts of information regarding a transaction, _________ is said to exist.A) asymmetric informationB) adverse selectionC) moral hazardD) fraud34) When the potential borrowers who are the most likely to default are the ones most actively seeking a loan, _________ is said to exist.A) asymmetric informationB) adverse selectionC) moral hazardD) fraud35) When the borrower engages in activities that make it less likely that the loan will be repaid, _________ is said to exist.A) asymmetric informationB) adverse selectionC) moral hazardD) fraud36) The concept of adverse selection helps to explainA) which firms are more likely to obtain funds from banks and other financial intermediaries, rather than from the securities markets.B) why indirect finance is more important than direct finance as a source of business finance.C) why direct finance is more important than indirect finance as a source of business finance.D) only A and B of the above.E) only A and C of the above.37) Adverse selection is a problem associated with equity and debt contracts arising fromA) the lender's relative lack of information about the borrower's potential returns and risks of his investment activities.B) the lender's inability to legally require sufficient collateral to cover a 100 percent loss if the borrower defaults.C) the borrower's lack of incentive to seek a loan for highly risky investments.D) none of the above.38) When the least desirable credit risks are the ones most likely to seek loans, lenders are subjectto theA) moral hazard problem.B) adverse selection problem.C) shirking problem.D) free-rider problem.E) principal-agent problem.39) Financial institutions expect thatA) moral hazard will occur, as the least desirable credit risks will be the ones most likely to seek out loans.B) opportunistic behavior will occur, as the least desirable credit risks will be the ones most likely to seek out loans.C) borrowers will commit moral hazard by taking on too much risk, and this is what drives financial institutions to take steps to limit moral hazard.D) none of the above will occur.40) Successful financial intermediaries have higher earnings on their investments because they are better equipped than individuals to screen out good from bad risks, thereby reducing losses due toA) moral hazard.B) adverse selection.C) bad luck.D) financial panics.41) In financial markets, lenders typically have inferior information about potential returns and risks associated with any investment project. This difference in information is calledA) comparative informational disadvantage.B) asymmetric information.C) variant information.D) caveat venditor.42) The largest depository institution at the end of 2004 wasA) life insurance companies.B) pension funds.C) state retirement funds.D) none of the above.43) Which of the following financial intermediaries are depository institutions?A) A savings and loan associationB) A commercial bankC) A credit unionD) All of the aboveE) Only A and C of the above44) Which of the following is a contractual savings institution?A) A life insurance companyB) A credit unionC) A savings and loan associationD) A mutual fund45) Which of the following are not investment intermediaries?A) A life insurance companyB) A pension fundC) A mutual fundD) Only A and B of the above46) Which of the following are investment intermediaries?A) Finance companiesB) Mutual fundsC) Pension fundsD) All of the aboveE) Only A and B of the above47) The government regulates financial markets for three main reasons:A) to ensure soundness of the financial system, to improve control of monetary policy, and to increase the information available to investors.B) to improve control of monetary policy, to ensure that financial intermediaries earn a normal rate of return, and to increase the information available to investors.C) to ensure that financial intermediaries do not earn more than the normal rate of return, to ensure soundness of the financial system, and to improve control of monetary policy.D) to ensure soundness of financial intermediaries, to increase the information available to investors, and to prevent financial intermediaries from earning less than the normal rate of return.48) Which of the following government regulations has the chief purpose of improving control of the money supply?A) deposit insuranceB) restrictions on entry into banking or insuranceC) reserve requirementsD) restrictions on the assets financial intermediaries can hold49) Asymmetric information can lead to widespread collapse of financial intermediaries, referred to as aA) bank holiday.B) financial panic.C) financial disintermediation.D) financial collapse.50) Foreign currencies that are deposited in banks outside the home country are known asA) foreign bonds.B) Eurobond.C) Eurocurrencies.D) Eurodollars.51) U.S. dollars deposited in foreign banks outside the United States or in foreign branches of U.S. are referred to asA) Eurodollars.B) Eurocurrencies.C) Eurobonds.D) foreign bonds.52) Banks providing depositors with checking accounts that enable them to pay their bills easily is known asA) liquidity services.B) asset transformation.C) risk sharing.D) transaction costs.53) A ________ is when one party in a financial contract has incentives to act in its own interest rather than in the interests of the other party.A) moral hazardB) riskC) conflict of interestD) financial panic54) Fire and casualty insurance companies are what type of intermediary?A) Contractual savings institutionB) Depository institutionsC) Investment intermediariesD) None of the above55) The country whose banks are the most restricted in the range of assets they may hold isA) Japan.B) Canada.C) Germany.D) the United States.答案：1-5：DAEBE 6-10:DECDD 11-15:CCEEB 16-20:CDADC 21-25:BEABD 26-30:AACAB 31-35:BCABC 36-40:DABCB 41-45:BDDAD 46-50:EACBC 51-55:AACAD。

PartⅠ.Decide whether each of the following statements is true or false (10%)每题1分, 答错不扣分1.I.perfec.market.existed.resource.woul.b.mor.mobil.an.coul.therefor.b.transferre.t.thos.countrie.mor.willin.t.pa..hig.pric.fo.them.. .. .2.Th.forwar.contrac.ca.hedg.futur.receivable.o.payable.i.foreig.currencie.t.insulat.th.fir.agains.exchang.rat.risk ... . )3.Th.primar.objectiv.o.th.multinationa.corporatio.i.stil.th.sam.primar.objectiv.o.an.firm.i.e..t.maximiz.sharehol de.wealth.. .. )4..lo.inflatio.rat.tend.t.increas.import.an.decreas.exports.thereb.decreasin.th.curren.accoun.deficit.othe.thing.e qual......5..capita.accoun.defici.reflect..ne.sal.o.th.hom.currenc.i.exchang.fo.othe.currencies.Thi.place.upwar.pressur.o.tha.hom.currency’.value.. .. )parativ.advantag.implie.tha.countrie.shoul.specializ.i.production.thereb.relyin.o.othe.countrie .fo.som.products.. .. .7.Covere.interes.arbitrag.i.plausibl.whe.th.forwar.premiu.reflec.th.interes.rat.differentia.betwee.tw.countrie.sp ecifie.b.th.interes.rat.parit.formula. .. . )8.Th.tota.impac.o.transactio.exposur.i.o.th.overal.valu.o.th.firm.. .. .9. .pu.optio.i.a.optio.t.sell-b.th.buye.o.th.option-.state.numbe.o.unit.o.th.underlyin.instrumen.a..specifie.pric.pe.uni.durin..specifie.period... . )10.Future.mus.b.marked-to-market.Option.ar.not.....)PartⅡ:Cloze (20%)每题2分, 答错不扣分1.I.inflatio.i..foreig.countr.differ.fro.inflatio.i.th.hom.country.th.exchang.rat.wil.adjus.t.maintai.equal.. purchasin.powe... ）2.Speculator.wh.expec..currenc.t..appreciat..... .coul.purchas.currenc.future.contract.fo.tha.currency.3.Covere.interes.arbitrag.involve.th.short-ter.investmen.i..foreig.currenc.tha.i.covere.b.....forwar.contrac...... .t. sel.tha.currenc.whe.th.investmen.matures.4.. Appreciation.Revalu....）petitio.i.increased.5.....PP... .suggest..relationshi.betwee.th.inflatio.differentia.o.tw.countrie.an.th.percentag.chang.i.th.spo.exchang.ra t.ove.time.6.IF.i.base.o.nomina.interes.rat....differential....).whic.ar.influence.b.expecte.inflation.7.Transactio.exposur.i..subse.o.economi.exposure.Economi.exposur.include.an.for.b.whic.th.firm’... valu... .wil.b.affected.modit.a..state.pric.i..... pu..optio..i.exercised9.Ther.ar.thre.type.o.long-ter.internationa.bonds.The.ar.Globa.bond. .. eurobond.....an....foreig.bond...).10.An.goo.secondar.marke.fo.financ.instrument.mus.hav.a.efficien.clearin.system.Mos.Eurobond.ar.cleare.thr oug.eithe...Euroclea... ..o.Cedel.PartⅢ:Questions and Calculations (60%)过程正确结果计算错误扣2分rmation:A BankB BankBid price of Canadian dollar $0.802 $0.796Ask price of Canadian dollar $0.808 $0.800rmation.i.locationa.arbitrag.possible?put.t h.profi.fro.thi.arbitrag.i.yo.ha.$1,000,e.(5%)ANSWER:Yes! One could purchase New Zealand dollars at Y Bank for $.80 and sell them to X Bank for $.802. With $1 million available, 1.25 million New Zealand dollars could be purchased at Y Bank. These New Zealand dollars could then be sold to X Bank for $1,002,500, thereby generating a profit of $2,500.2.Assum.tha.th.spo.exchang.rat.o.th.Britis.poun.i.$1.90..Ho.wil.thi.spo.rat.adjus.i.tw.year.i.th.Unite.Kingdo.experience.a.inflatio.rat.o..percen.pe.yea.whil.th.Unite.State.experience.a.inflatio.rat.o..perc en. pe.year?(10%)ANSWER:According to PPP, forward rate/spot=indexdom/indexforth.exchang.rat.o.th.poun.wil.depreciat.b.4..percent.Therefore.th.spo.rat.woul.adjus.t.$1.9..[..(–.047)..$1.81073.Assum.tha.th.spo.exchang.rat.o.th.Singapor.dolla.i.$0.70..Th.one-yea.interes.rat.i.1.percen.i.th.Unite.State.a n..percen.i.Singapore..Wha.wil.th.spo.rat.b.i.on.yea.accordin.t.th.IFE?.(5%)ANSWER: according to the IFE,St+1/St=(1+Rh)/(1+Rf)$.70 × (1 + .04) = $0.7284.Assum.tha.XY.Co.ha.ne.receivable.o.100,00.Singapor.dollar.i.9.days..Th.spo.rat.o.th.S.i.$0.50.an.th.Singap or.interes.rat.i.2.ove.9.days..Sugges.ho.th.U.S.fir.coul.implemen..mone.marke.hedge..B.precis. .(10%)ANSWER: The firm could borrow the amount of Singapore dollars so that the 100,000 Singapore dollars to be received could be used to pay off the loan. This amounts to (100,000/1.02) = about S$98,039, which could be converted to about $49,020 and invested. The borrowing of Singapore dollars has offset the transaction exposure due to the future receivables in Singapore dollars.pan.ordere..Jagua.sedan.I..month..i.wil.pa.£30,00.fo.th.car.I.worrie.tha.poun.ster1in.migh.ris.sharpl.fro.th.curren.rate($1.90)pan.bough...mont.poun.cal.(suppose.contrac.siz..£35,000.wit..strik.pric.o.$1.9.fo..premiu.o.2..cents/£.(1)Is hedging in the options market better if the £ rose to $1.92 in 6 months?(2)what did the exchange rate have to be for the company to break even?（15%）Solution:(1)I.th..ros.t.$pan.woul. exercis.th.poun.cal.option.Th.su.o.th.strik.pric.an.premiu..i.$1.90 + $0.023 = $1.9230/£Thi.i.bigge.tha.$1.92.So hedging in the options market is not better.(2.whe.w.sa.th. compan.ca.brea.even.w.mea.tha.hedgin.o.no.hedgin.doesn’. matter.An.onl.whe.(strik.pric..premiu.).th.exchang.rat.,hedging or not doesn’t matter.So, the exchange rate =$1.923/£.6.Discus.th.advantage.an.disadvantage.o.fixe.exchang.rat.system.(15%)textbook page50 答案以教材第50 页为准PART Ⅳ: Diagram(10%)Th.strik.pric.fo..cal.i.$1.67/£.Th.premiu.quote.a.th.Exchang.i.$0.022.pe.Britis.pound.Diagram the profit and loss potential, and the break-even price for this call optionSolution:Following diagram shows the profit and loss potential, and the break-even price of this put option:PART Ⅴa) b) Calculate the expected value of the hedge.c) How could you replicate this hedge in the money market?Yo.ar.expectin.revenue.o.Y100,00.i.on.mont.tha.yo.wil.nee.t.cover.t.dollars.Yo.coul.hedg.thi.i.forwar.market.b.takin.lon.position.i.U.dollar.(shor.position.i.Japanes.Yen).B.lockin.i.you.pric.a.$..Y105.you.dolla.revenue.ar.guarantee.t.b.Y100,000/ 105 = $952You could replicate this hedge by using the following:a) Borrow in Japanb) Convert the Yen to dollarsc) Invest the dollars in the USd) Pay back the loan when you receive the Y100,000。

Chapter 2 Overview of the Financial System2.1 Single Choice1) Every financial market performs the following function: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.2) Financial markets have the basic function ofA) bringing together people with funds to lend and people who want to borrow funds.B) assuring that the swings in the business cycle are less pronounced.C) assuring that governments need never resort to printing money.D) both A and B of the above.E) both B and C of the above.3) Which of the following can be described as involving direct finance?A) A corporation's stock is traded in an over-the-counter market.B) People buy shares in a mutual fund.C) A pension fund manager buys commercial paper in the secondary market.D) An insurance company buys shares of common stock in the over-the-counter markets.E) None of the above.4) Which of the following can be described as involving direct finance?A) A corporation's stock is traded in an over-the-counter market.B) A corporation buys commercial paper issued by another corporation.C) A pension fund manager buys commercial paper from the issuing corporation.D) Both A and B of the above.E) Both B and C of the above.5) Which of the following can be described as involving indirect finance?A) A corporation takes out loans from a bank.B) People buy shares in a mutual fund.C) A corporation buys commercial paper in a secondary market.D) All of the above.E) Only A and B of the above.6) Which of the following can be described as involving indirect finance?A) A bank buys a U.S. Treasury bill from one of its depositors.B) A corporation buys commercial paper issued by another corporation.C) A pension fund manager buys commercial paper in the primary market.D) Both A and C of the above.7) Financial markets improve economic welfare becauseA) they allow funds to move from those without productive investment opportunities to those who have such opportunities.B) they allow consumers to time their purchases better.C) they weed out inefficient firms.D) they do all of the above.E) they do A and B of the above.8) A country whose financial markets function poorly is likely toA) efficiently allocate its capital resources.B) enjoy high productivity.C) experience economic hardship and financial crises.D) increase its standard of living.9) Which of the following are securities?A) A certificate of depositB) A share of Texaco common stockC) A Treasury billD) All of the aboveE) Only A and B of the above10) Which of the following statements about the characteristics of debt and equity are true?A) They both can be long-term financial instruments.B) They both involve a claim on the issuer's income.C) They both enable a corporation to raise funds.D) All of the above.E) Only A and B of the above.11) The money market is the market in which _________ are traded.A) new issues of securitiesB) previously issued securitiesC) short-term debt instrumentsD) long-term debt and equity instruments12) Long-term debt and equity instruments are traded in the _________ market.A) primaryB) secondaryC) capitalD) money13) Which of the following are primary markets?A) The New York Stock ExchangeB) The U.S. government bond marketC) The over-the-counter stock marketD) The options marketsE) None of the above14) Which of the following are secondary markets?A) The New York Stock ExchangeB) The U.S. government bond marketC) The over-the-counter stock marketD) The options marketsE) All of the above15) 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.16) Intermediaries who are agents of investors and match buyers with sellers of securities are calledA) investment bankers.B) traders.C) brokers.D) dealers.E) none of the above.17) Intermediaries who link buyers and sellers by buying and selling securities at stated prices are calledA) investment bankers.B) traders.C) brokers.D) dealers.E) none of the above.18) 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.19) Which of the following statements about financial markets and securities are true?A) Most common stocks are traded over-the-counter, although the largest corporations have their shares traded at organized stock exchanges such as the New York Stock Exchange.B) A corporation acquires new funds only when its securities are sold in the primary market.C) Money market securities are usually more widely traded than longer-term securities and so tendto be more liquid.D) All of the above are true.E) Only A and B of the above are true.20) Which of the following statements about financial markets and securities are true?A) A bond is a long-term security that promises to make periodic payments called dividends to the firm's residual claimants.B) A debt instrument is intermediate term if its maturity is less than one year.C) A debt instrument is long term if its maturity is ten years or longer.D) The maturity of a debt instrument is the time (term) that has elapsed since it was issued.21) Which of the following statements about financial markets and securities are true?A) Few common stocks are traded over-the-counter, although the over-the-counter markets have grown in recent years.B) A corporation acquires new funds only when its securities are sold in the primary market.C) Capital market securities are usually more widely traded than longer term securities and so tend to be more liquid.D) All of the above are true.E) Only A and B of the above are true.22) Which of the following markets is sometimes organized as an over-the-counter market?A) The stock marketB) The bond marketC) The foreign exchange marketD) The federal funds marketE) all of the above23) Bonds that are sold in a foreign country and are denominated in that country's currency are known asA) foreign bonds.B) Eurobonds.C) Eurocurrencies.D) Eurodollars.24) Bonds that are sold in a foreign country and are denominated in a currency other than that of the country in which they are sold are known asA) foreign bonds.B) Eurobonds.C) Eurocurrencies.D) Eurodollars.25) Financial intermediariesA) exist because there are substantial information and transaction costs in the economy.B) improve the lot of the small saver.C) are involved in the process of indirect finance.D) do all of the above.E) do only A and B of the above.26) The main sources of financing for businesses, in order of importance, areA) financial intermediaries, issuing bonds, issuing stocks.B) issuing bonds, issuing stocks, financial intermediaries.C) issuing stocks, issuing bonds, financial intermediaries.D) issuing stocks, financial intermediaries, issuing bonds.27) The presence of transaction costs in financial markets explains, in part, whyA) financial intermediaries and indirect finance play such an important role in financial markets.B) equity and bond financing play such an important role in financial markets.C) corporations get more funds through equity financing than they get from financial intermediaries.D) direct financing is more important than indirect financing as a source of funds.28) Financial intermediaries can substantially reduce transaction costs per dollar of transactions because their large size allows them to take advantage ofA) poorly informed consumers.B) standardization.C) economies of scale.D) their market power.29) The purpose of diversification is toA) reduce the volatility of a portfolio's return.B) raise the volatility of a portfolio's return.C) reduce the average return on a portfolio.D) raise the average return on a portfolio.30) An investor who puts all her funds into one asset _________ her portfolio's _________.A) increases; diversificationB) decreases; diversificationC) increases; average returnD) decreases; average return31) Through risk-sharing activities, a financial intermediary _________ its own risk and _________ the risks of its customers.A) reduces; increasesB) increases; reducesC) reduces; reducesD) increases; increases32) The presence of _________ in financial markets leads to adverse selection and moral hazardproblems that interfere with the efficient functioning of financial markets.A) noncollateralized riskB) free-ridingC) asymmetric informationD) costly state verification33) When the lender and the borrower have different amounts of information regarding a transaction, _________ is said to exist.A) asymmetric informationB) adverse selectionC) moral hazardD) fraud34) When the potential borrowers who are the most likely to default are the ones most actively seeking a loan, _________ is said to exist.A) asymmetric informationB) adverse selectionC) moral hazardD) fraud35) When the borrower engages in activities that make it less likely that the loan will be repaid, _________ is said to exist.A) asymmetric informationB) adverse selectionC) moral hazardD) fraud36) The concept of adverse selection helps to explainA) which firms are more likely to obtain funds from banks and other financial intermediaries, rather than from the securities markets.B) why indirect finance is more important than direct finance as a source of business finance.C) why direct finance is more important than indirect finance as a source of business finance.D) only A and B of the above.E) only A and C of the above.37) Adverse selection is a problem associated with equity and debt contracts arising fromA) the lender's relative lack of information about the borrower's potential returns and risks of his investment activities.B) the lender's inability to legally require sufficient collateral to cover a 100 percent loss if the borrower defaults.C) the borrower's lack of incentive to seek a loan for highly risky investments.D) none of the above.38) When the least desirable credit risks are the ones most likely to seek loans, lenders are subjectto theA) moral hazard problem.B) adverse selection problem.C) shirking problem.D) free-rider problem.E) principal-agent problem.39) Financial institutions expect thatA) moral hazard will occur, as the least desirable credit risks will be the ones most likely to seek out loans.B) opportunistic behavior will occur, as the least desirable credit risks will be the ones most likely to seek out loans.C) borrowers will commit moral hazard by taking on too much risk, and this is what drives financial institutions to take steps to limit moral hazard.D) none of the above will occur.40) Successful financial intermediaries have higher earnings on their investments because they are better equipped than individuals to screen out good from bad risks, thereby reducing losses due toA) moral hazard.B) adverse selection.C) bad luck.D) financial panics.41) In financial markets, lenders typically have inferior information about potential returns and risks associated with any investment project. This difference in information is calledA) comparative informational disadvantage.B) asymmetric information.C) variant information.D) caveat venditor.42) The largest depository institution at the end of 2004 wasA) life insurance companies.B) pension funds.C) state retirement funds.D) none of the above.43) Which of the following financial intermediaries are depository institutions?A) A savings and loan associationB) A commercial bankC) A credit unionD) All of the aboveE) Only A and C of the above44) Which of the following is a contractual savings institution?A) A life insurance companyB) A credit unionC) A savings and loan associationD) A mutual fund45) Which of the following are not investment intermediaries?A) A life insurance companyB) A pension fundC) A mutual fundD) Only A and B of the above46) Which of the following are investment intermediaries?A) Finance companiesB) Mutual fundsC) Pension fundsD) All of the aboveE) Only A and B of the above47) The government regulates financial markets for three main reasons:A) to ensure soundness of the financial system, to improve control of monetary policy, and to increase the information available to investors.B) to improve control of monetary policy, to ensure that financial intermediaries earn a normal rate of return, and to increase the information available to investors.C) to ensure that financial intermediaries do not earn more than the normal rate of return, to ensure soundness of the financial system, and to improve control of monetary policy.D) to ensure soundness of financial intermediaries, to increase the information available to investors, and to prevent financial intermediaries from earning less than the normal rate of return.48) Which of the following government regulations has the chief purpose of improving control of the money supply?A) deposit insuranceB) restrictions on entry into banking or insuranceC) reserve requirementsD) restrictions on the assets financial intermediaries can hold49) Asymmetric information can lead to widespread collapse of financial intermediaries, referred to as aA) bank holiday.B) financial panic.C) financial disintermediation.D) financial collapse.50) Foreign currencies that are deposited in banks outside the home country are known asA) foreign bonds.B) Eurobond.C) Eurocurrencies.D) Eurodollars.51) U.S. dollars deposited in foreign banks outside the United States or in foreign branches of U.S. are referred to asA) Eurodollars.B) Eurocurrencies.C) Eurobonds.D) foreign bonds.52) Banks providing depositors with checking accounts that enable them to pay their bills easily is known asA) liquidity services.B) asset transformation.C) risk sharing.D) transaction costs.53) A ________ is when one party in a financial contract has incentives to act in its own interest rather than in the interests of the other party.A) moral hazardB) riskC) conflict of interestD) financial panic54) Fire and casualty insurance companies are what type of intermediary?A) Contractual savings institutionB) Depository institutionsC) Investment intermediariesD) None of the above55) The country whose banks are the most restricted in the range of assets they may hold isA) Japan.B) Canada.C) Germany.D) the United States.答案：1-5：DAEBE 6-10:DECDD 11-15:CCEEB 16-20:CDADC 21-25:BEABD 26-30:AACAB 31-35:BCABC 36-40:DABCB 41-45:BDDAD 46-50:EACBC 51-55:AACAD。

Economics of Money, Banking, and Financial Markets, 12e (Mishkin)Chapter 27 Web Chapter 2: The ISLM Model27.1 Keynes's Fixed Price Level Assumption and the IS Curve1) Because inflation was not a serious problem during the Great Depression, Keynes's analysis assumedA) that unemployment also was not a problem.B) that the money supply was fixed.C) that the price level was fixed.D) that monetary policy is not effective.Answer: CQues Status: Previous EditionAACSB: Reflective Thinking2) The money market is in equilibriumA) at any point on the IS curve.B) at any point on the LM curve.C) at only one point on the LM curve.D) only at the intersection of the IS and LM curves.Answer: BQues Status: Previous EditionAACSB: Reflective Thinking3) The ________ describes the combinations of interest rates and aggregate output for which the quantity of money demanded equals the quantity of money supplied.A) IS curveB) LM curveC) consumption functionD) investment scheduleAnswer: BQues Status: Previous EditionAACSB: Reflective Thinking4) In the Keynesian model the quantity of money demanded is ________ related to income and ________ related to the interest rate.A) positively; positivelyB) positively; negativelyC) negatively; negativelyD) negatively; positivelyAnswer: BQues Status: Previous EditionAACSB: Reflective Thinking5) According to the liquidity preference theory, the demand for money is ________ related to aggregate output and ________ related to interest rates.A) negatively; negativelyB) negatively; positivelyC) positively; negativelyD) positively; positivelyAnswer: CQues Status: Previous EditionAACSB: Reflective Thinking6) As interest rates rise, the opportunity cost of holding money ________ and the demand for money ________.A) rises; risesB) rises; fallsC) falls; risesD) falls; fallsAnswer: BQues Status: Previous EditionAACSB: Analytical Thinking7) As aggregate output rises, the demand for money ________ and the interest rate ________, so that money demanded equals money supplied and the money market is in equilibrium.A) increases; risesB) increases; fallsC) decreases; risesD) decreases; fallsAnswer: AQues Status: Previous EditionAACSB: Analytical Thinking8) Everything else held constant, if aggregate output is to the right of the LM curve, then there is an excess ________ of money which will cause the interest rate to ________.A) supply; fallB) supply; riseC) demand; fallD) demand; riseAnswer: DQues Status: Previous EditionAACSB: Analytical Thinkingan excess ________ of money which will cause the interest rate to ________.A) supply; fallB) supply; riseC) demand; fallD) demand; riseAnswer: AQues Status: Previous EditionAACSB: Analytical Thinking10) Everything else held constant, if aggregate output is to the ________ of the LM curve, then there is an excess supply of money which will cause the interest rate to ________.A) right; fallB) right; riseC) left; fallD) left; riseAnswer: CQues Status: Previous EditionAACSB: Analytical Thinking11) Everything else held constant, if aggregate output is to the ________ of the LM curve, then there is an excess demand of money which will cause the interest rate to ________.A) right; fallB) right; riseC) left; fallD) left; riseAnswer: BQues Status: Previous EditionAACSB: Analytical Thinking12) Everything else held constant, if aggregate output is to the ________ of the LM curve, then there is an excess ________ of money which will cause the interest rate to fall.A) right; supplyB) right; demandC) left; supplyD) left; demandAnswer: CQues Status: Previous EditionAACSB: Analytical Thinkingthere is an excess ________ of money which will cause the interest rate to rise.A) right; supplyB) right; demandC) left; supplyD) left; demandAnswer: BQues Status: Previous EditionAACSB: Analytical Thinking27.2 ISLM Approach to Aggregate Output and Interest Rates1) Macroeconomic equilibrium requiresA) equilibrium in the goods market.B) equilibrium in the money market.C) equilibrium in both the goods and money markets.D) equilibrium in neither the goods nor the money market.Answer: CQues Status: Previous EditionAACSB: Reflective Thinking2) When the IS and LM curves are combined in the same diagram, the intersection of the two curves determines the equilibrium level of ________ as well as the ________.A) aggregate output; price levelB) aggregate output; interest rateC) money supply; price levelD) consumer expenditures; interest rateAnswer: BQues Status: Previous EditionAACSB: Reflective Thinking3) If the economy is on the LM curve, but is to the right of the IS curve, aggregate output will ________ and the interest rate will ________.A) rise; riseB) rise; fallC) fall; riseD) fall; fallAnswer: DQues Status: Previous EditionAACSB: Analytical Thinking________ and the interest rate will ________.A) rise; riseB) rise; fallC) fall; riseD) fall; fallAnswer: AQues Status: Previous EditionAACSB: Analytical Thinking5) If the economy is on the IS curve, but is to the left of the LM curve, aggregate output will________ and the interest rate will ________.A) rise; riseB) rise; fallC) fall; riseD) fall; fallAnswer: BQues Status: Previous EditionAACSB: Analytical Thinking6) If the economy is on the IS curve, but is to the right of the LM curve, aggregate output will________ and the interest rate will ________.A) rise; riseB) rise; fallC) fall; riseD) fall; fallAnswer: CQues Status: Previous EditionAACSB: Analytical Thinking7) If the economy is on the IS curve, but is to the left of the LM curve, then the ________ market is in equilibrium, but the interest rate is ________ the equilibrium level.A) goods; belowB) goods; aboveC) money; belowD) money; aboveAnswer: BQues Status: Previous EditionAACSB: Analytical Thinkingmarket is in equilibrium, but aggregate ________ exceeds aggregate ________.A) goods; output; demandB) goods; demand; outputC) money; output; demandD) money; demand; outputAnswer: CQues Status: Previous EditionAACSB: Analytical Thinking27.3 Factors That Cause the LM Curve to Shift1) An increase in the money supply, other things equal, shifts the ________ curve to the________.A) IS; rightB) IS; leftC) LM; leftD) LM; rightAnswer: DQues Status: Previous EditionAACSB: Reflective Thinking2) If the Federal Reserve conducts open market purchases, the money supply ________, shifting the LM curve to the ________, everything else held constant.A) decreases; rightB) decreases; leftC) increases; rightD) increases; leftAnswer: CQues Status: Previous EditionAACSB: Analytical Thinking3) If the Federal Reserve conducts open market sales, the money supply ________, shifting the LM curve to the ________, everything else held constant.A) decreases; rightB) decreases; leftC) increases; rightD) increases; leftAnswer: BQues Status: Previous EditionAACSB: Analytical Thinking4) If the Federal Reserve conducts open market ________, the money supply ________, shifting the LM curve to the right, everything else held constant.A) purchases; decreasesB) sales; decreasesC) purchases; increasesD) sales; increasesAnswer: CQues Status: Previous EditionAACSB: Analytical Thinking5) If the Federal Reserve conducts open market ________, the money supply ________, shifting the LM curve to the left, everything else held constant.A) purchases; decreasesB) sales; decreasesC) purchases; increasesD) sales; increasesAnswer: BQues Status: Previous EditionAACSB: Analytical Thinking6) An increase in the quantity of money supplied shifts the money supply curve to the ________, and the equilibrium interest rate ________, everything else held constant.A) right; fallsB) right; risesC) left; fallsD) left; risesAnswer: AQues Status: Previous EditionAACSB: Analytical Thinking7) A decrease in the quantity of money supplied shifts the money supply curve to the ________, and the equilibrium interest rate ________, everything else held constant.A) right; fallsB) right; risesC) left; fallsD) left; risesAnswer: DQues Status: Previous EditionAACSB: Analytical Thinking8) An increase in the quantity of money supplied shifts the money supply curve to the ________ and the LM curve to the ________, everything else held constant.A) right; leftB) right; rightC) left; leftD) left; rightAnswer: BQues Status: Previous EditionAACSB: Analytical Thinking9) A decrease in the quantity of money supplied shifts the money supply curve to the ________, and the LM curve to the ________, everything else held constant.A) right; leftB) right; rightC) left; leftD) left; rightAnswer: CQues Status: Previous EditionAACSB: Analytical Thinking10) A decline in the money ________ shifts the LM curve to the ________, causing the interest rate to rise and output to fall, everything else held constant.A) demand; rightB) demand; leftC) supply; rightD) supply; leftAnswer: DQues Status: Previous EditionAACSB: Analytical Thinking11) A decline in the money supply shifts the LM curve to the left, causing the interest rate to________ and output to ________, everything else held constant.A) rise; riseB) rise; fallC) fall; riseD) fall; fallAnswer: BQues Status: Previous EditionAACSB: Analytical Thinking12) An increase in the money ________ shifts the LM curve to the ________, causing the interest rate to fall and output to rise, everything else held constant.A) demand; rightB) demand; leftC) supply; rightD) supply; leftAnswer: CQues Status: Previous EditionAACSB: Analytical Thinking13) An increase in the money supply shifts the LM curve to the right, causing the interest rate to ________ and output to ________, everything else held constant.A) rise; riseB) rise; fallC) fall; riseD) fall; fallAnswer: CQues Status: Previous EditionAACSB: Analytical Thinking14) When the central bank ________ the money supply, the LM curve shifts to the right, interest rates ________, and equilibrium aggregate output ________, everything else held constant.A) increases; fall; increasesB) increases; rise; decreasesC) decreases; rise; decreasesD) decreases; fall; increasesAnswer: AQues Status: Previous EditionAACSB: Analytical Thinking15) An autonomous decrease in money demand, other things equal, shifts the ________ curve to the ________.A) IS; rightB) IS; leftC) LM; leftD) LM; rightAnswer: DQues Status: Previous EditionAACSB: Analytical Thinking16) An autonomous increase in money demand, other things equal, shifts the ________ curve to the ________.A) IS; rightB) IS; leftC) LM; leftD) LM; rightAnswer: CQues Status: Previous EditionAACSB: Analytical Thinking17) As bonds become a riskier asset, the demand for money ________ and, all else constant, the equilibrium interest rate ________.A) rises; risesB) rises; fallsC) falls; risesD) falls; fallsAnswer: AQues Status: Previous EditionAACSB: Analytical Thinking18) An autonomous rise in ________ shifts the LM curve to the ________, everything else held constant.A) net exports; rightB) net exports; leftC) money demand; rightD) money demand; leftAnswer: DQues Status: Previous EditionAACSB: Reflective Thinking27.4 Changes in Equilibrium Level of the Interest Rate and Aggregate Output1) In the ISLM framework, an expansionary monetary policy causes aggregate output to________ and the interest rate to ________, everything else held constant.A) increase; increaseB) increase; decreaseC) decrease; decreaseD) decrease; increaseAnswer: BQues Status: Previous EditionAACSB: Analytical Thinking2) An expansionary monetary policy shifts the LM curve to the ________, reducing ________, everything else held constant.A) left; output and increasing interest ratesB) left; both real output and interest ratesC) right; both interest rates and real outputD) right; interest rates and increasing real outputAnswer: DQues Status: Previous EditionAACSB: Reflective Thinking3) Everything else held constant, a monetary expansion is characterized by ________ output and ________ interest rates.A) rising; risingB) rising; fallingC) falling; risingD) falling; fallingAnswer: BQues Status: Previous EditionAACSB: Reflective Thinking4) A contractionary monetary policy shifts the LM curve to the ________, reducing ________, everything else held constant.A) left; output and increasing interest ratesB) left; both real output and interest ratesC) right; both interest rates and real outputD) right; interest rates and increasing real outputAnswer: AQues Status: Previous EditionAACSB: Analytical Thinking5) Everything else held constant, a monetary contraction is characterized by ________ output and ________ interest rates.A) rising; risingB) rising; fallingC) falling; risingD) falling; fallingAnswer: CQues Status: Previous EditionAACSB: Analytical Thinking6) In the money market, a condition of excess demand for money can be eliminated by a________ in aggregate output or a ________ in the interest rate, everything else held constant.A) rise; riseB) rise; fallC) fall; riseD) fall; fallAnswer: CQues Status: Previous EditionAACSB: Analytical Thinking7) In the money market, a condition of excess supply of money can be eliminated by a ________ in aggregate output or a ________ in the interest rate, everything else held constant.A) rise; riseB) rise; fallC) fall; riseD) fall; fallAnswer: BQues Status: Previous EditionAACSB: Analytical Thinking8) In the ISLM framework, an expansionary fiscal policy causes aggregate output to ________ and the interest rate to ________, everything else held constant.A) increase; increaseB) increase; decreaseC) decrease; decreaseD) decrease; increaseAnswer: AQues Status: Previous EditionAACSB: Analytical Thinking9) In the ISLM framework a contractionary fiscal policy causes aggregate output to ________ and the interest rate to ________, everything else held constant.A) increase; increaseB) increase; decreaseC) decrease; decreaseD) decrease; increaseAnswer: CQues Status: Previous EditionAACSB: Analytical Thinking10) Everything else held constant, an expansionary ________ policy will cause the interest rate to rise, while an expansionary ________ policy will cause the interest rate to fall.A) monetary; monetaryB) monetary; fiscalC) fiscal; monetaryD) fiscal; fiscalAnswer: CQues Status: Previous EditionAACSB: Reflective Thinking11) Aggregate output and the interest rate are ________ related to government spending and are ________ related to taxes.A) positively; positivelyB) positively; negativelyC) negatively; positivelyD) negatively; negativelyAnswer: BQues Status: Previous EditionAACSB: Reflective Thinking12) An increase in spending that results from expansionary ________ policy causes the interest rate to ________, everything else held constant.A) fiscal; riseB) fiscal; fallC) incomes; riseD) incomes; fallAnswer: AQues Status: Previous EditionAACSB: Analytical Thinking13) Despite an expansionary monetary policy, an economy experiences a recession. Everything else held constant, the recession could occur in spite of the rightward shift of the LM curve ifA) consumer confidence decreases sharply.B) there is an investment boom.C) the money supply increases.D) taxes are cut.Answer: AQues Status: Previous EditionAACSB: Reflective Thinking14) If an economy experiences high interest rates and high unemployment, the ISLM framework predicts that ________ policy has been too ________.A) fiscal; expansionaryB) fiscal; contractionaryC) monetary; expansionaryD) monetary; contractionaryAnswer: DQues Status: Previous EditionAACSB: Analytical Thinking15) Which of the following statements concerning Keynesian ISLM analysis is TRUE?A) For a given change in taxes, the IS curve will shift less than for an equal change in government spending.B) Changes in net exports arising from a change in interest rates causes a shift in the IS curve.C) A fall in the money supply shifts the LM curve to the right.D) Expansionary fiscal policy will cause the interest rate to fall.Answer: AQues Status: Previous EditionAACSB: Reflective Thinking16) Referring to the Economic Stimulus Act of 2008, the expansionary effect of the government stimulus was overwhelmed by the continuing deterioration in credit market conditions. Everything else held constant and using the ISLM model, the net effect would cause the________ curve to ________ and output will ________.A) IS; shift left; decreaseB) IS; shift right; increaseC) LM; shift right; increaseD) LM; shift left; decreaseAnswer: AQues Status: Previous EditionAACSB: Analytical Thinking17) Using the ISLM model, explain the effects of a monetary expansion combined with a fiscal contraction. How do the equilibrium level of output and interest rate change?Answer: The monetary expansion shifts the LM curve to the right which by itself would cause the interest rate to decrease and aggregate output to increase. The fiscal contraction shifts the IS curve to the left which by itself would cause the interest rate to decrease and aggregate output to decrease. Therefore, the equilibrium interest rate unambiguously falls, while the effect on output is indeterminate.Ques Status: Previous EditionAACSB: Reflective Thinking18) Using the ISLM model, show graphically and explain the effects of a monetary contraction. What is the effect on the equilibrium interest rate and level of output?Answer: See figure below.The monetary contraction shifts the LM curve to the left. The result is that the equilibrium level of output falls and the equilibrium interest rate increases.Ques Status: Previous EditionAACSB: Reflective Thinking27.5 Effectiveness Of Monetary Versus Fiscal Policy1) If the quantity of money demanded is not affected by changes in the interest rate, the LM curve is ________ and fiscal policy will be ________.A) horizontal; very effectiveB) horizontal; ineffectiveC) vertical; ineffectiveD) vertical; very effectiveAnswer: CQues Status: Previous EditionAACSB: Reflective Thinking2) The LM curve will be vertical and fiscal policy ineffective whenA) the demand for money is unaffected by changes in the interest rate.B) the demand for money is unaffected by changes in income.C) investment is unaffected by changes in the interest rate.D) investment is unaffected by changes in income.Answer: AQues Status: Previous EditionAACSB: Reflective Thinking3) The situation in which expansionary fiscal policy does not lead to a rise in aggregate output is referred to asA) fiscal neutrality.B) a recession.C) complete crowding out.D) inflation.Answer: CQues Status: Previous EditionAACSB: Reflective Thinking4) Crowding out will be more pronounced the closer to vertical is theA) IS curve.B) LM curve.C) consumption function.D) aggregate demand function.Answer: BQues Status: Previous EditionAACSB: Reflective Thinking5) The less interest-sensitive is money demand, theA) more effective is fiscal policy relative to monetary policy.B) more effective is monetary policy relative to fiscal policy.C) steeper is the IS curve.D) flatter is the LM curve.Answer: BQues Status: Previous EditionAACSB: Reflective Thinking6) The more interest-sensitive is money demand, theA) more effective is fiscal policy relative to monetary policy.B) more effective is monetary policy relative to fiscal policy.C) steeper is the IS curve.D) steeper is the LM curve.Answer: AQues Status: Previous EditionAACSB: Reflective Thinking7) If the economy is characterized by a certain and stable LM curve, then ________ target produces ________ fluctuations in aggregate output.A) an interest rate; smallerB) a money supply; smallerC) a money supply; largerD) an exchange rate; largerAnswer: BQues Status: Previous EditionAACSB: Reflective Thinking8) If the economy is characterized by a stable IS curve and an unstable LM curve, then ________ target produces ________ fluctuations in aggregate output.A) an interest rate; largerB) a money supply; smallerC) a money supply; largerD) an exchange rate; smallerAnswer: CQues Status: Previous EditionAACSB: Reflective Thinking9) If the ________ curve is relatively more unstable than the ________ curve, a money supply target is preferred.A) IS; ISB) IS; LMC) LM; ISD) LM; LMAnswer: BQues Status: Previous EditionAACSB: Reflective Thinking10) If the ________ curve is relatively more unstable than the ________ curve, an interest rate target is preferred.A) IS; ISB) IS; LMC) LM; ISD) LM; LMAnswer: CQues Status: Previous EditionAACSB: Reflective Thinking11) If the Fed adopts a policy of pegging the interest rate, a ________ in government spending forces the Fed to increase the money supply to prevent interest rates from ________.A) fall; increasingB) fall; decreasingC) rise; decreasingD) rise; increasingAnswer: DQues Status: Previous EditionAACSB: Reflective Thinking12) Using the ISLM model, explain and show graphically the effect of a fiscal expansion when the demand for money is completely insensitive to changes in the interest rate. What is this effect called?Answer: See figure below.This is the total crowding out effect. The LM curve is vertical, so any shift of the IS curve affects only interest rates. The level of output is constant. The fiscal expansion shifts the IS curve rightward, increasing the interest rate.Ques Status: Previous EditionAACSB: Reflective Thinking13) Show graphically and explain why targeting an interest rate is preferable when money demand is unstable and the IS curve is stable.Answer: See figure below.Unstable money demand causes the LM curve to shift between LM' and LM". If the money supply is targeted, output fluctuates between Y' and Y". With an interest rate target, output remains stable at Y. Since the objective is to minimize output fluctuations, targeting the interest rate is preferable.Ques Status: Previous EditionAACSB: Reflective Thinking27.6 ISLM Model In The Long Run1) The rate of output at which the price level has no tendency to rise or fall is called theA) natural rate of output.B) potential level of income.C) bliss point.D) efficient level of output.Answer: AQues Status: Previous EditionAACSB: Reflective Thinking2) In the long-run ISLM model and with everything else held constant, as long as the level of output ________ the natural rate level, the price level will continue to ________, shifting the LM curve to the ________, until finally output is back at the natural rate level.A) exceeds; rise; rightB) exceeds; rise; leftC) remains below; fall; leftD) remains below; rise; rightAnswer: BQues Status: Previous EditionAACSB: Analytical Thinking3) In the long-run ISLM model and with everything else held constant, as long as the level of output ________ the natural rate level, the price level will continue to ________, shifting the LM curve to the ________, until finally output is back at the natural rate level.A) exceeds; rise; rightB) exceeds; fall; leftC) remains below; fall; rightD) remains below; rise; leftAnswer: CQues Status: Previous EditionAACSB: Analytical Thinking4) In the long-run ISLM model and with everything else held constant, an increase in the money supply leaves the level of output and interest rates unchanged, an outcome calledA) interest rate overshooting.B) long-run money neutrality.C) long-run crowding out.D) the long-run Phillips curve.Answer: BQues Status: Previous EditionAACSB: Reflective Thinkingexpansionary monetary policy is toA) increase real output and the interest rate.B) not change either real output or the interest rate.C) increase real output and leave the interest rate unchanged.D) increase the interest rate and leave real output unchanged.Answer: BQues Status: Previous EditionAACSB: Reflective Thinking6) The long-run neutrality of money refers to the fact that in the long run, monetary policyA) changes only real output.B) changes only the real interest rate.C) changes both real output and the real interest rate.D) has no effect on either real output or the real interest rate.Answer: DQues Status: Previous EditionAACSB: Reflective Thinking7) In the long-run ISLM model and with everything else held constant, the long-run effect of an expansionary fiscal policy is to ________ real output and ________ the interest rate.A) increase; increaseB) not change; not changeC) increase; not changeD) not change; increaseAnswer: DQues Status: Previous EditionAACSB: Reflective Thinking8) In the long-run ISLM model and with everything else held constant, the long-run effect of a contractionary fiscal policy is to ________ real output and ________ the interest rate.A) not change; not changeB) decrease; decreaseC) decrease; not changeD) not change; decreaseAnswer: DQues Status: Previous EditionAACSB: Reflective Thinkingcut in government spending is to ________ real output and ________ the interest rate.A) increase; increaseB) increase; not changeC) not change; increaseD) not change; decreaseAnswer: DQues Status: Previous EditionAACSB: Reflective Thinking10) In the long-run ISLM model and with everything else held constant, the long-run effect of a tax cut is to ________ real output and ________ the interest rate.A) increase; increaseB) increase; not changeC) not change; increaseD) not change; decreaseAnswer: CQues Status: Previous EditionAACSB: Reflective Thinking11) In the long-run ISLM model and with everything else held constant, the long-run effect of an autonomous increase in investment is to ________ real output and ________ the interest rate.A) increase; increaseB) increase; not changeC) not change; increaseD) not change; decreaseAnswer: CQues Status: Previous EditionAACSB: Reflective Thinking12) In the long-run ISLM model and with everything else held constant, the long-run effect of a fall in net exports is to ________ real output and ________ the interest rate.A) increase; increaseB) increase; not changeC) not change; increaseD) not change; decreaseAnswer: DQues Status: Previous EditionAACSB: Reflective Thinking。

第二章1、Debit cards are offered by various financial intermediaries.A debit card differs from a credit card in that,in the latter case,a bill is sent to the credit card holder periodically(usually once a month)requesting payment for transactions made in the past.In the case of a debit card, funds are immediately withdrawn(that is,debited)from the purchaser’s account at the time the transaction takes place.许多金融中介都可以提供借记卡，它与信用卡的区别在于信用卡持有者会定期（通常为每月一次）收到一份账单要求其在对过去时期内的交易行为付账，而借记卡的持有者在购买的同时，其账户上相应的资金就被划走了。

2、The investment company invests the funds received in the stock ofa large number of companies.By doing so,the investment company has diversified and reduced its risk.Investors who have a small sum to invest would find it difficult to achieve the same degree of diversification because they do not have sufficient funds to buy shares of a large number of companies.Yet,by investing in the investment company for the same sum of money,investors can accomplish this diversification,thereby reducing risk.投资公司将所筹集资金投资于许多公司的股票，通过这样的操作，投资公司就达到了分散投资与降低风险的目的。