FINANCIAL MARKETS AND INSTITUTIONS 10TH
EDITION BY FREDERIC S MISHKIN
TESTBANK CHAPTERS 1-13
, FINANCIAL MARKETS AND
INSTITUTIONS 10TH EDITION BY
FREDERIC S MISHKIN
TESTBANK CHAPTERS 1-13
, Chapter 1
Why Study Financial Markets and Institutions?
!Multiple Choice Questions
Financial markets and institutions
involve the movement of huge quantities of money.
affect the profits of businesses.
affect the types of goods and services produced in an economy.
do all of the above.
do only (a) and (b) of the above. Answer: D
Financial market activities affect
personal wealth.
spending decisions by individuals and business firms.
the economy’s location in the business cycle.
all of the above.
Answer: D
Markets in which funds are transferred from those who have excess funds available to those who have a
shortage of available funds are called
commodity markets.
funds markets.
derivative exchange markets.
financial markets.
Answer: D
The price paid for the rental of borrowed funds (usually expressed as a percentage of the rental of $100
per year) is commonly referred to as the
inflation rate.
exchange rate.
interest rate.
aggregate price level.
, Answer: C
The bond markets are important because
they are easily the most widely followed financial markets in the United States.
they are the markets where interest rates are determined.
they are the markets where foreign exchange rates are determined.
all of the above.
Answer: B
Interest rates are important to financial institutions since an interest rate increase
the cost of acquiring funds and the income from assets.
decreases; decreases
increases; increases
decreases; increases
increases; decreases Answer: B
Typically, increasing interest rates
discourage individuals from saving.
discourage corporate investments.
encourage corporate expansion.
encourage corporate borrowing.
none of the above.
Answer: B
Compared to interest rates on long-term U.S. government bonds, interest rates on
fluctuate more and are lower on average.
medium-quality corporate bonds
low-quality corporate bonds
high-quality corporate bonds
three-month Treasury bills
none of the above Answer: D
EDITION BY FREDERIC S MISHKIN
TESTBANK CHAPTERS 1-13
, FINANCIAL MARKETS AND
INSTITUTIONS 10TH EDITION BY
FREDERIC S MISHKIN
TESTBANK CHAPTERS 1-13
, Chapter 1
Why Study Financial Markets and Institutions?
!Multiple Choice Questions
Financial markets and institutions
involve the movement of huge quantities of money.
affect the profits of businesses.
affect the types of goods and services produced in an economy.
do all of the above.
do only (a) and (b) of the above. Answer: D
Financial market activities affect
personal wealth.
spending decisions by individuals and business firms.
the economy’s location in the business cycle.
all of the above.
Answer: D
Markets in which funds are transferred from those who have excess funds available to those who have a
shortage of available funds are called
commodity markets.
funds markets.
derivative exchange markets.
financial markets.
Answer: D
The price paid for the rental of borrowed funds (usually expressed as a percentage of the rental of $100
per year) is commonly referred to as the
inflation rate.
exchange rate.
interest rate.
aggregate price level.
, Answer: C
The bond markets are important because
they are easily the most widely followed financial markets in the United States.
they are the markets where interest rates are determined.
they are the markets where foreign exchange rates are determined.
all of the above.
Answer: B
Interest rates are important to financial institutions since an interest rate increase
the cost of acquiring funds and the income from assets.
decreases; decreases
increases; increases
decreases; increases
increases; decreases Answer: B
Typically, increasing interest rates
discourage individuals from saving.
discourage corporate investments.
encourage corporate expansion.
encourage corporate borrowing.
none of the above.
Answer: B
Compared to interest rates on long-term U.S. government bonds, interest rates on
fluctuate more and are lower on average.
medium-quality corporate bonds
low-quality corporate bonds
high-quality corporate bonds
three-month Treasury bills
none of the above Answer: D
