FIN 100 WEEK 7 QUIZS

 Question 1
_________________________ was an international monetary system in which  the U.S. dollar was valued in gold and other exchange rates were pegged  to the dollar.
 

The gold standard
 

The flexible exchange rate system
 

The Bretton Woods System
 

The Taft-Hartley Act
Question 2
An importer will generally try to avoid making payment for a purchase before the goods are actually shipped by
 

purchasing a letter of credit.
 

having payment sent to a bank in the exporter's country to be held until proper shipment is made.
 

post-dating a check.
 

insisting on payment only upon delivery.
Question 3
An unconditional order for the payment of money from one person to another is called a(n)
 

bill of exchange.
 

sight draft.
 

time draft.
 

documentary draft.
 

Question 4
A statement by a bank guaranteeing acceptance and payment of a draft up to a stated amount is called a(n)
 

bill of exchange.
 

commercial letter of credit.
 

time draft.
 

documentary draft.
Question 5
An instrument through which a bank retains title to goods until they are paid for is called a(n)
 

bill of exchange.
 

commercial letter of credit.
 

trust receipt.
 

documentary draft.
Question 6
The personal savings rate is calculated as:
 

personal savings divided by personal outlays
 

personal savings divided by disposable personal income
 

disposable personal income divided by personal outlays
 

personal income divided by personal outlays
Question 7
Capital market securities include all of the following EXCEPT:
 

Corporate bond
 

Treasury bond
 

Certificate of deposit
 

Common Stock
Question 8
The life stages of an individual saver include which of the following:
 

the formative/education developing stage
 

the career reduction stage
 

the wealth depletion stage
 

the cost of living stage
Question 9
If personal consumption expenditures are $1 billion, government  purchases are $2 billion, gross private domestic investments are $4  billion and net exports are $5 billion, then GDP is:
 

$12 billion
 

$8 billion
 

$7 billion
 

$2 billion
Question 10
If individuals believe their income will decrease in the near future, they may _____________ their spending.
 

Eliminate
 

Curtail
 

Increase
 

Double
Question 11
The basic price that equates the demand for and supply of loanable funds in the financial markets is the __________:
 

interest rate
 

yield curve
 

term structure
 

cash price
Question 12
Compensation for those financial debt instruments that cannot be easily  converted to cash at prices close to estimated fair market values is  termed:
 

liquidity premium
 

market risk premium
 

maturity premium
 

environmental premium
Question 13
If the nominal interest rate is 8% and the risk-free rate is 3%, the expected inflation rate must be:
 

3%
 

5%
 

11%
 

13%
Question 14
Which of the following factors does not affect the supply of loanable funds?
 

the volume of savings
 

expansion of deposits by banks
 

attitudes about liquidity
 

quantity of unissued Treasury bonds
Question 15
Which of the following factors does not directly impact the level of interest rates?
 

risk
 

marketability
 

maturity
 

cost of producing and distributing new currency
Question 16
Private placements:
 

are not sold to the general public
 

have expedited SEC scrutiny
 

require public disclosure of the firm's financial information
 

are only issued by governments
Question 17
Mary wants to purchase a 20-year bond that has a par value of $1,000 and  makes semiannual interest payments of $40. If her required yield to  maturity is 10%, which of the following is closest to how much should  Mary be willing to pay for the bond?
 

$902
 

$925
 

$1000
 

$828
Question 18
The largest annual supply of external funds for business corporations comes from issuance of which one of the following sources?
 

privately placed stocks
 

bonds
 

preferred stocks
 

common stocks
Question 19
An example of asset securitization is:
 

a bond backed by credit card receivables
 

a debenture
 

a subordinated debenture
 

convertible bond
Question 20
A current yield on a corporate bond is calculated as:
 

coupon interest amount divided by par value
 

coupon interest rate times the par value
 

coupon interest amount divided by the current price
 

coupon interest rate times the current price