FINC 341 Exam 1 Theory UPDATED ACTUAL Questions And Correct Answers
C
Terms in this set (207)
The dollar has increased in value since the Fed raised true
rates over the past few years.
The U.S. dollar exchange rates would have been greatly true
affected by the vast increase in currency if the other
major countries had not been increasing their amount of
currency as well.
An increase in the value of the dollar helps U.S. true
companies who import goods.
A good time to invest in long-term bonds is when the FALSE
rates are low so that when rates go up, the price on those
bonds will go up.
Between 1913 and 2019, inflation has averaged 2.96 true
percent, but between 1990 and 2017 the average inflation
was 2.31 percent.
The NASDAQ and AMEX merged in 1990 but later split in FALSE
1998.
The NASDAQ and AMEX merged in 1998 but later split in true
2005.
The NYSE Euronext was taken over in 2013 by the true
Intercontinental Exchange (ICE). ICE spun off Euronext in
2014.
The new tax act allowed corporations a window in 2018 true
to repatriate cash from abroad; this money was taxed
15.5% when it entered the U.S. during this window.
The NYSE bought AMEX in 2008 and integrated it into the true
NYSE in 2009.
The NYSE is larger than the NASDAQ, Tokyo and London true
exchanges combined.
Since the 2008 Financial Crisis, the Fed used 3 rounds of true
quantitative easing to increase the money supply.
, When inflation is high, the Federal Reserve tends to FALSE
tighten the money supply, which will in turn push down
short-term interest rates.
When the Fed raises the reserve requirement, interest true
rates are pushed upward.
If expected inflation increases less within some foreign true
country than in the United States, the value of that
country's currency is likely to increase compared to U.S.
currency.
If a yield curve is inverted, inflation is definitely expected true
to decrease since the MRP is always trying to lift the L-T
end of the yield curve.
The NASDAQ index uses value-weighted market weights. true
Collateralized debt obligations (CDOs) backed by pools true
of higher risk (subprime) mortgages played a major role
in the 2007-2008 financial crisis.
Firms with higher overall market values in the DJIA (the FALSE
Dow) index move the index more than smaller companies
in the DJIA since value-weighted market weights are
used.
Lower fees motivate investors to move toward index true
funds.
According to the figure in the text, since 1995 the true
NASDAQ Index has outperformed the Dow and the S&P
500 indices.
The spread between yield curves of corporate bonds true
and Treasury bonds is larger the longer the maturity
because the corporate bonds are considered riskier if
they have a long time to maturity, and because of this
extra risk, they are less liquid.
According to the text, inflation peaked at about 13% in true
1980.
If the Fed lowers rates, it could cause foreigners to sell true
their U. S. bonds. They would be paid in dollars, which
they would then sell, lowering the value of the dollar and
helping U.S. manufacturers export goods.
C
Terms in this set (207)
The dollar has increased in value since the Fed raised true
rates over the past few years.
The U.S. dollar exchange rates would have been greatly true
affected by the vast increase in currency if the other
major countries had not been increasing their amount of
currency as well.
An increase in the value of the dollar helps U.S. true
companies who import goods.
A good time to invest in long-term bonds is when the FALSE
rates are low so that when rates go up, the price on those
bonds will go up.
Between 1913 and 2019, inflation has averaged 2.96 true
percent, but between 1990 and 2017 the average inflation
was 2.31 percent.
The NASDAQ and AMEX merged in 1990 but later split in FALSE
1998.
The NASDAQ and AMEX merged in 1998 but later split in true
2005.
The NYSE Euronext was taken over in 2013 by the true
Intercontinental Exchange (ICE). ICE spun off Euronext in
2014.
The new tax act allowed corporations a window in 2018 true
to repatriate cash from abroad; this money was taxed
15.5% when it entered the U.S. during this window.
The NYSE bought AMEX in 2008 and integrated it into the true
NYSE in 2009.
The NYSE is larger than the NASDAQ, Tokyo and London true
exchanges combined.
Since the 2008 Financial Crisis, the Fed used 3 rounds of true
quantitative easing to increase the money supply.
, When inflation is high, the Federal Reserve tends to FALSE
tighten the money supply, which will in turn push down
short-term interest rates.
When the Fed raises the reserve requirement, interest true
rates are pushed upward.
If expected inflation increases less within some foreign true
country than in the United States, the value of that
country's currency is likely to increase compared to U.S.
currency.
If a yield curve is inverted, inflation is definitely expected true
to decrease since the MRP is always trying to lift the L-T
end of the yield curve.
The NASDAQ index uses value-weighted market weights. true
Collateralized debt obligations (CDOs) backed by pools true
of higher risk (subprime) mortgages played a major role
in the 2007-2008 financial crisis.
Firms with higher overall market values in the DJIA (the FALSE
Dow) index move the index more than smaller companies
in the DJIA since value-weighted market weights are
used.
Lower fees motivate investors to move toward index true
funds.
According to the figure in the text, since 1995 the true
NASDAQ Index has outperformed the Dow and the S&P
500 indices.
The spread between yield curves of corporate bonds true
and Treasury bonds is larger the longer the maturity
because the corporate bonds are considered riskier if
they have a long time to maturity, and because of this
extra risk, they are less liquid.
According to the text, inflation peaked at about 13% in true
1980.
If the Fed lowers rates, it could cause foreigners to sell true
their U. S. bonds. They would be paid in dollars, which
they would then sell, lowering the value of the dollar and
helping U.S. manufacturers export goods.
