Multiple choice

1. Which of the following can be considered as an outcome of the 2008-2009 U.S. financial crisis? 

I. More restrictive lending practices by U.S. financial institutions 

II. A dysfunctional and damaged financial market 

III. Limited consequences outside of the U.S. 

I and II only 

I and III only 

II and III only 

I, II, and III 

2. If the yield curve is normal, what is the interest rate on a 20-year Treasury bond, compared to the interest rate on a 5-year Treasury bond? 

The interest rate on the 20-year bond will be more than the interest rate on the 5-year bond. 

The interest rate on the 5-year bond will be more than the interest rate on the 20-year bond. 

The interest rates of the two bonds will be equal. 

It is impossible to tell without knowing the relative risks of the bonds. 

3. The over-the-counter market differs from the New York Stock Exchange in that: 

the stocks, although publicly traded, are not listed on an exchange 

only relatively small companies are traded because larger companies are required to be traded on exchanges 

NASDAQ quotations apply only to smaller, less capitalized firms 

all of the above

4. If the yield curve is normal, what is the interest rate on a 20-year Treasury bond, compared to the interest rate on a 5-year Treasury bond? 

The interest rate on the 20-year bond will be more than the interest rate on the 5-year bond. 

The interest rate on the 5-year bond will be more than the interest rate on the 20-year bond. 

The interest rates of the two bonds will be equal. 

It is impossible to tell without knowing the relative risks of the bonds.