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1 | |
The net wealth of the aggregate economy is equal to the sum of |
| | A) | all real assets. |
| | B) | all financial assets. |
| | C) | all physical assets. |
| | D) | all real and financial assets. |
| | E) | none of the above |
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2 | |
The term "human capital" refers to |
| | A) | the total amount of capital owned by humans. |
| | B) | the value of the earnings potential of the workforce. |
| | C) | the value of a firm's management personnel. |
| | D) | the value of a firm's blue-collar workers. |
| | E) | the value of equipment that is operated by company personnel. |
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3 | |
Financial intermediaries differ from other businesses in that both their assets and their liabilities are mostly |
| | A) | illiquid. |
| | B) | owned by government. |
| | C) | real. |
| | D) | financial. |
| | E) | regulated. |
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4 | |
Although derivatives can be used as speculative instruments, businesses most often use them to |
| | A) | hedge. |
| | B) | offset debt. |
| | C) | appease stockholders. |
| | D) | attract customers. |
| | E) | enhance their balance sheets. |
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5 | |
Financial intermediaries exist because small investors cannot efficiently |
| | A) | gather information. |
| | B) | advertise for needed investments. |
| | C) | monitor their portfolios. |
| | D) | diversify their portfolios. |
| | E) | all of the above. |
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6 | |
Financial assets |
| | A) | contribute to the country's productive capacity both directly and indirectly. |
| | B) | do not contribute to the country's productive capacity either directly or indirectly. |
| | C) | directly contribute to the country's productive capacity. |
| | D) | indirectly contribute to the country's productive capacity. |
| | E) | are of no value to anyone. |
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7 | |
In what roles do investment bankers perform? |
| | A) | design securities with desirable properties |
| | B) | market new stock and bond issues for firms |
| | C) | provide advice to the firms as to market conditions, price, etc. |
| | D) | none of the above |
| | E) | all of the above |
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8 | |
A WEBS security |
| | A) | limits the diversification potential of investors who hold it. |
| | B) | may be traded only in the primary market. |
| | C) | tracks the performance of an index of share returns for a particular country. |
| | D) | is linked directly to the value of a composite index of futures contracts. |
| | E) | must be earned as a performance bonus within a corporation rather than purchased. |
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9 | |
Which of the following is true about GNMA pass-throughs?
I) They separate individual home mortgages into heterogeneous pools.
II) The purchaser of a GNMA receives monthly interest and principal payments received from payments made on the pool.
III) The banks that originated the mortgages continue to service them.
IV) The banks that originated the mortgages maintain ownership of them. |
| | A) | II, III, and IV |
| | B) | II and III |
| | C) | I, II, and IV |
| | D) | I, III, and IV |
| | E) | I, II, III, and IV |
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10 | |
Individual investors are most likely to trade securities in |
| | A) | the primary market. |
| | B) | a brokered market. |
| | C) | an auction market. |
| | D) | a block transaction. |
| | E) | a direct search market. |
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