Test bank for Financial Markets and Institutions 12th Edition;9781337099745 , by Jeff Madura

Test bank for Financial Markets and Institutions 12th
Edition by Jeff Madura

1. Financial market participants who provide funds are called
M
a. deficit units.
b. surplus units.
c. primary units.
ED
d. secondary units.
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: Multiple Choice
C
HAS VARIABLES: False
LEARNING OBJECTIVES: FMAI.MADU.15.01.01
O
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
N
DATE CREATED: 9/15/2016 6:38 AM
DATE MODIFIED: 9/16/2016 1:14 AM
N
2. Which of the following is NOT an issuer of bonds?
a. households
O
b. corporations
c. the U.S. Treasury
d. government agencies
IS
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
SE
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FMAI.MADU.15.01.01
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
U
KEYWORDS: Bloom's: Knowledge
DATE CREATED: 9/16/2016 1:15 AM
DATE MODIFIED: 5/1/2018 11:55 AM
R

3. Behavioral finance
a. applies concepts from sociology and anthropology to the behavior of market participants.
Page 1

, b. studies the behavior of financial markets in response to changes in Federal Reserve policy.
c. applies psychology to financial decision making.
d. explains why markets are efficient.
ANSWER: c
POINTS: 1
M
DIFFICULTY: Easy
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
ED
LEARNING OBJECTIVES: FMAI.MADU.15.01.01
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
DATE CREATED: 9/16/2016 1:18 AM
C
DATE MODIFIED: 9/16/2016 1:21 AM
O
4. Those financial markets that facilitate the flow of short-term funds are known as:
a. money markets
b. capital markets
N
c. primary markets
d. secondary markets
ANSWER: a
N
POINTS: 1
DIFFICULTY: Easy
O
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FMAI.MADU.15.01.02
IS
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.02
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
DATE CREATED: 9/16/2016 1:21 AM
SE
DATE MODIFIED: 5/1/2018 11:56 AM


5. Funds are provided to the initial issuer of securities in the:
a. secondary market
U
b. primary market
c. deficit market
d. surplus market
R
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
Page 2

, QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FMAI.MADU.15.01.01
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
M
KEYWORDS: Bloom's: Knowledge
DATE CREATED: 9/16/2016 1:24 AM
DATE MODIFIED: 5/1/2018 12:26 PM
ED

6. Which of the following is a capital market instrument?
a. a six-month certificate of deposit
b. a three-month Treasury bill
c. a ten-year bond
C
d. an agreement for a bank to loan funds directly to a company for nine months
ANSWER: c
O
POINTS: 1
DIFFICULTY: Moderate
QUESTION TYPE: Multiple Choice
N
HAS VARIABLES: False
LEARNING OBJECTIVES: FMAI.MADU.15.01.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
N
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Comprehension
O
DATE CREATED: 9/16/2016 1:27 AM
DATE MODIFIED: 9/16/2016 1:29 AM
IS
7. Which of the following is a money market security?
a. Treasury note
b. municipal bond
c. mortgage
SE
d. commercial paper
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
U
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FMAI.MADU.15.01.02
R
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Comprehension
Page 3

, DATE CREATED: 9/16/2016 1:29 AM
DATE MODIFIED: 9/16/2016 1:31 AM


8. The creditors in the federal funds market are:
a. households
M
b. depository institutions
c. firms
d. government agencies
ED
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
C
LEARNING OBJECTIVES: FMAI.MADU.15.01.03
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
O
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
DATE CREATED: 9/16/2016 1:52 AM
N
DATE MODIFIED: 5/1/2018 12:27 PM


9. Investors in equity securities may earn a return from
N
a. coupon payments and the return of principal at the maturity date.
b. coupon payments and a capital gain when they sell the securities.
O
c. quarterly dividends (if paid) and a capital gain when they sell the securities.
d. quarterly dividends (if paid) and the return of principal at the maturity date.
ANSWER: c
IS
POINTS: 1
DIFFICULTY: Moderate
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
SE
LEARNING OBJECTIVES: FMAI.MADU.15.01.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Comprehension
U
DATE CREATED: 9/16/2016 2:56 AM
DATE MODIFIED: 9/16/2016 2:59 AM
R
10. Money market securities generally have ____.
a. relatively low liquidity, low expected return, and a high degree of credit risk
b. relatively high liquidity, high expected return, and a high degree of credit risk
Page 4