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REE4204 1 Exam Questions With Revised
Answers
Intertemporal transfer of funds means:
a. interest that accrues from the beginning of the contract negotiations to consummation of the
proceedings
b. literally "between the time," translated—from the time that the person thought of transferring
funds to the time he actually transferred the funds
c. the time value of money and the implications for interest rate on the time value of money and
financing decisions
d. the time value of money and the implication of profit maximization - answer✔✔c.* the time
value of money and the implications for interest rate on the time value of money and financing
decisions
More so than economics, finance focuses on:
a. profit
b. cash flows
c. both A and B
d. neither A nor B - answer✔✔b. cash flows
The risk-return tradeoff:
a. is the same as risk
b. is the possibility that the actual result of the investment will differ from the
expected outcome
c. states that investors require additional expected returns for taking on additional risk
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d. doesn't need to be considered when analyzing a potential investment - answer✔✔c.* states
that investors require additional expected returns for taking on additional risk
Risk:
a. is the same as risk-return tradeoff
b. is the possibility that the actual result will differ from the expected outcome
c. states that investors require additional expected returns for taking on additional risk
d. doesn't need to be considered when analyzing a potential investment - answer✔✔b.* is the
possibility that the actual result will differ from the expected outcome
The definition of real property includes:
a. only that property that can be seen and touched
b. all of the rights and privileges of the use of real estate
c. only land and buildings, the rights and privileges cannot be included
d. a and c - answer✔✔b.* all of the rights and privileges of the use of real estate
For the economy the concept that the amount of savings equals the total amount that is invested
is referred to as:
a. the debt-equity ratio
b. not important to potential creditors because there are better methods of measuring credit
worthiness
c. the savings-investment cycle
d. cash flow - answer✔✔c.* the savings-investment cycle
Intermediaries:
a. are financial institutions that channel funds from the surplus income units to deficit income
units
b. channel funds from deficit income units to surplus income units
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c. are not controlled by government regulations
d. help consumers obtain funds but do not assume risk - answer✔✔a.* are financial institutions
that channel funds from the surplus income units to deficit income units
Savings and Loan Associations and Mutual Savings Banks:
a. have the same form of ownership—both are stock companies
b. differ in their form of ownership—one is a cooperative, the other is a stock company are also
called thrifts
c. a and c
d. none of the above - answer✔✔b.* differ in their form of ownership—one is a cooperative, the
other is a stock company are also called thrifts
The secondary mortgage market:
a. is called secondary because it is less important than the primary mortgage market
b. is where an investor goes after the primary mortgage market has turned down his request for
credit
c. increases liquidity risk due to its inefficiency
d. purchases and sells mortgages that have been previously originated by other lenders -
answer✔✔d.* purchases and sells mortgages that have been previously originated by other
lenders
Financial markets can be partitioned into two categories:
a. primary and secondary
b. liquid and non-liquid securities
c. long-term and temporary instruments
d. money markets and capital markets - answer✔✔d.* money markets and capital markets
Money markets:
a. deal strictly in cash or checks
REE4204 1 Exam Questions With Revised
Answers
Intertemporal transfer of funds means:
a. interest that accrues from the beginning of the contract negotiations to consummation of the
proceedings
b. literally "between the time," translated—from the time that the person thought of transferring
funds to the time he actually transferred the funds
c. the time value of money and the implications for interest rate on the time value of money and
financing decisions
d. the time value of money and the implication of profit maximization - answer✔✔c.* the time
value of money and the implications for interest rate on the time value of money and financing
decisions
More so than economics, finance focuses on:
a. profit
b. cash flows
c. both A and B
d. neither A nor B - answer✔✔b. cash flows
The risk-return tradeoff:
a. is the same as risk
b. is the possibility that the actual result of the investment will differ from the
expected outcome
c. states that investors require additional expected returns for taking on additional risk
, ©THEBRIGHTSTARS 2024
d. doesn't need to be considered when analyzing a potential investment - answer✔✔c.* states
that investors require additional expected returns for taking on additional risk
Risk:
a. is the same as risk-return tradeoff
b. is the possibility that the actual result will differ from the expected outcome
c. states that investors require additional expected returns for taking on additional risk
d. doesn't need to be considered when analyzing a potential investment - answer✔✔b.* is the
possibility that the actual result will differ from the expected outcome
The definition of real property includes:
a. only that property that can be seen and touched
b. all of the rights and privileges of the use of real estate
c. only land and buildings, the rights and privileges cannot be included
d. a and c - answer✔✔b.* all of the rights and privileges of the use of real estate
For the economy the concept that the amount of savings equals the total amount that is invested
is referred to as:
a. the debt-equity ratio
b. not important to potential creditors because there are better methods of measuring credit
worthiness
c. the savings-investment cycle
d. cash flow - answer✔✔c.* the savings-investment cycle
Intermediaries:
a. are financial institutions that channel funds from the surplus income units to deficit income
units
b. channel funds from deficit income units to surplus income units
, ©THEBRIGHTSTARS 2024
c. are not controlled by government regulations
d. help consumers obtain funds but do not assume risk - answer✔✔a.* are financial institutions
that channel funds from the surplus income units to deficit income units
Savings and Loan Associations and Mutual Savings Banks:
a. have the same form of ownership—both are stock companies
b. differ in their form of ownership—one is a cooperative, the other is a stock company are also
called thrifts
c. a and c
d. none of the above - answer✔✔b.* differ in their form of ownership—one is a cooperative, the
other is a stock company are also called thrifts
The secondary mortgage market:
a. is called secondary because it is less important than the primary mortgage market
b. is where an investor goes after the primary mortgage market has turned down his request for
credit
c. increases liquidity risk due to its inefficiency
d. purchases and sells mortgages that have been previously originated by other lenders -
answer✔✔d.* purchases and sells mortgages that have been previously originated by other
lenders
Financial markets can be partitioned into two categories:
a. primary and secondary
b. liquid and non-liquid securities
c. long-term and temporary instruments
d. money markets and capital markets - answer✔✔d.* money markets and capital markets
Money markets:
a. deal strictly in cash or checks
