FIN 300 EXAM QUESTIONS WITH
100% CORRECT ANSWERS
GUARANTEED PASS
The economy is experiencing strong economic growth. The Fed will most likely:
A. sell Treasury securities
B. buy Treasury securities
C. decrease the required reserve ratio
D. decrease the fed funds rate - Answer- A. sell Treasury securities
National commercial banks are examined primarily by:
A. the Comptroller of the Currency
B. the FDIC
C. the Federal Reserve
D. The state banking authorities - Answer- A. the Comptroller of the Currency
4. Commercial banks that are state member banks are examined primarily by:
A. the Comptroller of the Currency
B. the FDIC
C. the Federal Reserve
D. The state banking authorities - Answer- C. the Federal Reserve
Primary Reserves:
A. include marketable securities
B. include vault cash and deposits held at the Federal reserves
C. provide all the liquidity commercial banks need
D. include only Treasury securities - Answer- B. include vault cash and deposits held at
the Federal reserves
A bank needs ______ before it opens for business
A. a charter
B. permission from the President
C. permission from the Chairman of the Federal Reserve
D. permission from its regional Federal Reserve Bank - Answer- A. a charter
Open market operations:
A. cannot be conducted by the Federal Reserve as a matter of law
, B. are used in an attempt to manipulate the economy through changes in short-term
interest rates and the money supply
C. refers to raising and lowering of the Federal Reserve discount rate
D. are conducted quarterly by the Federal Reserve - Answer- B. are used in an attempt
to manipulate the economy through changes in short-term interest rates and the money
supply
The Fed makes loans to financial institutions:
A. in Washington DC
B. only if these institutions are member banks
C. at the discount window
D. never - Answer- C. at the discount window
The income statement:
A.is a financial statement that shows the firm's financial position at a particular point in
time.
B. is a financial statement that summarizes a firm's revenues and expenses over a
period of time.
C. is a financial statement that summarizes a firm's revenues and expenses at a
particular point in time.
D. details the firm's assets and liabilities over a period of time. - Answer- B. is a
financial statement that summarizes a firm's revenues and expenses over a period of
time.
Which of the following is a use of cash that would appear on the statement of cash
flows?
A. accumulated depreciation
B. purchase of marketable securities
C. receipt of interest payments
D. decrease in accounts receivable - Answer- B. purchase of marketable securities
According to accounting principles:
A. current assets should equal current liabilities
B. net working capital should equal zero
C. operating expenses during the year are tied to revenues they helped to generate
D. depreciation is a cash expense - Answer- C. operating expenses during the year are
tied to revenues they helped to generate
Which of the following equations best describes net working capital?
A. total assets - total liabilities
B. total assets - fixed assets - current liabilities
C. cash + inventory-accounts payables
D. fixed assets - long-term liabilities - Answer- B. total assets - fixed assets - current
liabilities
100% CORRECT ANSWERS
GUARANTEED PASS
The economy is experiencing strong economic growth. The Fed will most likely:
A. sell Treasury securities
B. buy Treasury securities
C. decrease the required reserve ratio
D. decrease the fed funds rate - Answer- A. sell Treasury securities
National commercial banks are examined primarily by:
A. the Comptroller of the Currency
B. the FDIC
C. the Federal Reserve
D. The state banking authorities - Answer- A. the Comptroller of the Currency
4. Commercial banks that are state member banks are examined primarily by:
A. the Comptroller of the Currency
B. the FDIC
C. the Federal Reserve
D. The state banking authorities - Answer- C. the Federal Reserve
Primary Reserves:
A. include marketable securities
B. include vault cash and deposits held at the Federal reserves
C. provide all the liquidity commercial banks need
D. include only Treasury securities - Answer- B. include vault cash and deposits held at
the Federal reserves
A bank needs ______ before it opens for business
A. a charter
B. permission from the President
C. permission from the Chairman of the Federal Reserve
D. permission from its regional Federal Reserve Bank - Answer- A. a charter
Open market operations:
A. cannot be conducted by the Federal Reserve as a matter of law
, B. are used in an attempt to manipulate the economy through changes in short-term
interest rates and the money supply
C. refers to raising and lowering of the Federal Reserve discount rate
D. are conducted quarterly by the Federal Reserve - Answer- B. are used in an attempt
to manipulate the economy through changes in short-term interest rates and the money
supply
The Fed makes loans to financial institutions:
A. in Washington DC
B. only if these institutions are member banks
C. at the discount window
D. never - Answer- C. at the discount window
The income statement:
A.is a financial statement that shows the firm's financial position at a particular point in
time.
B. is a financial statement that summarizes a firm's revenues and expenses over a
period of time.
C. is a financial statement that summarizes a firm's revenues and expenses at a
particular point in time.
D. details the firm's assets and liabilities over a period of time. - Answer- B. is a
financial statement that summarizes a firm's revenues and expenses over a period of
time.
Which of the following is a use of cash that would appear on the statement of cash
flows?
A. accumulated depreciation
B. purchase of marketable securities
C. receipt of interest payments
D. decrease in accounts receivable - Answer- B. purchase of marketable securities
According to accounting principles:
A. current assets should equal current liabilities
B. net working capital should equal zero
C. operating expenses during the year are tied to revenues they helped to generate
D. depreciation is a cash expense - Answer- C. operating expenses during the year are
tied to revenues they helped to generate
Which of the following equations best describes net working capital?
A. total assets - total liabilities
B. total assets - fixed assets - current liabilities
C. cash + inventory-accounts payables
D. fixed assets - long-term liabilities - Answer- B. total assets - fixed assets - current
liabilities
