FIN310 FINAL EXAM ICLICKER AND
SLIDE. EXAM QUESTIONS AND
ANSWERS 2026 VERIFIED.
Funds are provided to the initial issuer of securities in the ________. - ANS Primary market
Which of the following is a money market security?
a. Treasury note
b. Municipal bond
c. Mortgage
d. Commercial paper - ANS d. Commercial Paper
The Securities and Exchange Commission (SEC) was established by the:
a. Federal reserve Act
b. McFadden Act
c. Securities Exchange Act of 1934
d. Glass-Steagall Act
e. None are correct - ANS c. Securities Exchange Act of 1934
The required return to implement a given business project will be ____ if interest rates are
lower. This implies that businesses will demand a ____ quantity of loanable funds when interest
rates are lower.
@COPYRIGHT ALL RIGHTS RESERVED PAGE 1 OF 16
,a. Greater; lower
b. Lower; greater
c. Lower; lower
d. Greater; greater - ANS b. Lower; greater
The federal government's demand for loanable funds is _____. If the budget deficit is expected
to increase, the federal government's demand for loanable funds would ____.
a. Interest-elastic; decrease
b. Interest-elastic; increase
c. Interest-inelastic; increase
d. Interest-inelastic; decrease - ANS d. Interest-inelastic; decrease
The Fisher Effect states that the:
a. Nominal interest rate equals the expected inflation rate plus the real state of interest
b. Nominal interest rate equals the real rate of interest minus the expected inflation rate
c. Real rate of interest equals the nominal interest rate plus the expected inflation rate
d. Expected inflation rate equals the nominal interest rate plus the real rate of interest -
ANS a. Nominal interest rate equals the expected inflation rate plus the real state of interest
Credit (default) risk is likely to be highest for:
a. Short-term Treasury securities
b. AAA corporate securities
c. Long-term Treasury securities
d. BBB corporate securities - ANS d. BBB corporate securities
@COPYRIGHT ALL RIGHTS RESERVED PAGE 2 OF 16
, If shorter-term securities have annualized yields than longer-term securities, the yield curve:
a. Is horizontal
b. Is upward sloping
c. Is downward sloping
d. Cannot be determined unless we know additional information (such as the level of market
interest rates) - ANS c. Is downward sloping
Which of the following is NOT an activity of Fed district banks?
a. Clearing checks
b. Replacing old currency
c. Providing loans to depository institutions
d. Acting as intermediary to match up lenders and borrowers in stock market - ANS d. Acting
as intermediary to match up lenders and borrowers in stock market
Members of the FOMC serve 14-year nonrenewable terms
a. True
b. False - ANS a. True
Each Federal Reserve district bank is responsible for reporting its regional conditions, and all of
these reports are consolidated to compose the Beige Book
a. True
b. False - ANS a. True
When open market operations are used to ____ bank funds, the yield on debt instruments
____.
@COPYRIGHT ALL RIGHTS RESERVED PAGE 3 OF 16
SLIDE. EXAM QUESTIONS AND
ANSWERS 2026 VERIFIED.
Funds are provided to the initial issuer of securities in the ________. - ANS Primary market
Which of the following is a money market security?
a. Treasury note
b. Municipal bond
c. Mortgage
d. Commercial paper - ANS d. Commercial Paper
The Securities and Exchange Commission (SEC) was established by the:
a. Federal reserve Act
b. McFadden Act
c. Securities Exchange Act of 1934
d. Glass-Steagall Act
e. None are correct - ANS c. Securities Exchange Act of 1934
The required return to implement a given business project will be ____ if interest rates are
lower. This implies that businesses will demand a ____ quantity of loanable funds when interest
rates are lower.
@COPYRIGHT ALL RIGHTS RESERVED PAGE 1 OF 16
,a. Greater; lower
b. Lower; greater
c. Lower; lower
d. Greater; greater - ANS b. Lower; greater
The federal government's demand for loanable funds is _____. If the budget deficit is expected
to increase, the federal government's demand for loanable funds would ____.
a. Interest-elastic; decrease
b. Interest-elastic; increase
c. Interest-inelastic; increase
d. Interest-inelastic; decrease - ANS d. Interest-inelastic; decrease
The Fisher Effect states that the:
a. Nominal interest rate equals the expected inflation rate plus the real state of interest
b. Nominal interest rate equals the real rate of interest minus the expected inflation rate
c. Real rate of interest equals the nominal interest rate plus the expected inflation rate
d. Expected inflation rate equals the nominal interest rate plus the real rate of interest -
ANS a. Nominal interest rate equals the expected inflation rate plus the real state of interest
Credit (default) risk is likely to be highest for:
a. Short-term Treasury securities
b. AAA corporate securities
c. Long-term Treasury securities
d. BBB corporate securities - ANS d. BBB corporate securities
@COPYRIGHT ALL RIGHTS RESERVED PAGE 2 OF 16
, If shorter-term securities have annualized yields than longer-term securities, the yield curve:
a. Is horizontal
b. Is upward sloping
c. Is downward sloping
d. Cannot be determined unless we know additional information (such as the level of market
interest rates) - ANS c. Is downward sloping
Which of the following is NOT an activity of Fed district banks?
a. Clearing checks
b. Replacing old currency
c. Providing loans to depository institutions
d. Acting as intermediary to match up lenders and borrowers in stock market - ANS d. Acting
as intermediary to match up lenders and borrowers in stock market
Members of the FOMC serve 14-year nonrenewable terms
a. True
b. False - ANS a. True
Each Federal Reserve district bank is responsible for reporting its regional conditions, and all of
these reports are consolidated to compose the Beige Book
a. True
b. False - ANS a. True
When open market operations are used to ____ bank funds, the yield on debt instruments
____.
@COPYRIGHT ALL RIGHTS RESERVED PAGE 3 OF 16
