Test bank- Mid Exam - Test bank questions for mid exam.
Financial Markets (FINS5512)
Test bank- Mid Exam - Test bank questions for mid exam.
Financial Markets (FINS5512)
,Test bank- Mid Exam - Test bank questions for mid exam.
Financial Markets (FINS5512)
16 1
Test bank- Mid Exam - Test bank questions for mid exam.
Financial Markets (FINS5512)
,Test bank- Mid Exam - Test bank questions for mid exam.
Financial Markets (FINS5512)
Chapter 01 A modern financial system: An overview
1: The exchange of goods and services is made more efficient by:
A: barter
B*: money
C: governments
D: some combination of government transfer and barter
2: A nation state that has only a barter system has high transaction costs because:
A: the difficulties of trade result in high legal costs because of the contracts required
B*: traders must spend quite a bit of time looking for trading partners
C: taxes under this system consume a large amount of output
D: the difficulties of trade require high insurance premiums
3: The term ‘medium of exchange’ for money refers to its use as:
A: coinage
B: currency
C*: anything that is widely accepted as payment for goods and services
D: any standard of value that prices can be expressed in
4: The role of money as a store of value refers to:
A: the value of money falling only when the money supply falls
B: the value of money falling only when the money supply increases
C*: the fact that money allows worth to be stored readily
D: the fact that money never loses its value compared with other assets
5: Money increases economic growth by assisting transfers from:
A: consumers to investors
B*: savers to borrowers
C: businesses to consumers
D: borrowers to investors
6: Financial markets have developed to facilitate the exchange of money between
savers and borrowers. Which of the following is NOT a function of money?
A: a store of value
B: a medium of exchange for settling economic transactions
C*: a claim to future cash flows
D: short-term protection against inflation
16 1
, Test bank- Mid Exam - Test bank questions for mid exam.
Financial Markets (FINS5512)
7: Buyers of financial claims lend their excess funds as they:
A: expect to borrow extra funds in the future
B*: want surplus funds in the future
C: want to invest in the future
D: want to increase their costs relative to their incomes
8: Sellers of financial claims promise to pay back borrowed funds:
A: by borrowing extra funds in the future
B*: based on their expectation of having surplus funds in the future
C: by selling other assets
D: by reducing their costs relative to their incomes
9: A savings-surplus unit is one:
A: that needs to borrow funds from a surplus unit
B*: whose income exceeds its spending
C: whose spending exceeds its income
D: that generally is a company
10: The process of facilitating the flow of funds between borrowers and lenders
performed by the financial system:
A: is hindered by the problem of ‘double coincidence of wants’
B: greatly reduces the probability of inflation
C*: increases the rate of economic growth of a country
D: occurs only through financial intermediaries
11: Both real and financial assets have four principal attributes that are significant
factors in the investment decision process. These are:
I. liquidity
II. capital gain
III. risk
IV. return or yield
V. time pattern of future cash flows
VI. price and cash flow volatility
A: I, II, III, IV
B*: I, III, IV, V
C: I, III, IV, VI
D: II, III, IV, V
16 1
Financial Markets (FINS5512)
Test bank- Mid Exam - Test bank questions for mid exam.
Financial Markets (FINS5512)
,Test bank- Mid Exam - Test bank questions for mid exam.
Financial Markets (FINS5512)
16 1
Test bank- Mid Exam - Test bank questions for mid exam.
Financial Markets (FINS5512)
,Test bank- Mid Exam - Test bank questions for mid exam.
Financial Markets (FINS5512)
Chapter 01 A modern financial system: An overview
1: The exchange of goods and services is made more efficient by:
A: barter
B*: money
C: governments
D: some combination of government transfer and barter
2: A nation state that has only a barter system has high transaction costs because:
A: the difficulties of trade result in high legal costs because of the contracts required
B*: traders must spend quite a bit of time looking for trading partners
C: taxes under this system consume a large amount of output
D: the difficulties of trade require high insurance premiums
3: The term ‘medium of exchange’ for money refers to its use as:
A: coinage
B: currency
C*: anything that is widely accepted as payment for goods and services
D: any standard of value that prices can be expressed in
4: The role of money as a store of value refers to:
A: the value of money falling only when the money supply falls
B: the value of money falling only when the money supply increases
C*: the fact that money allows worth to be stored readily
D: the fact that money never loses its value compared with other assets
5: Money increases economic growth by assisting transfers from:
A: consumers to investors
B*: savers to borrowers
C: businesses to consumers
D: borrowers to investors
6: Financial markets have developed to facilitate the exchange of money between
savers and borrowers. Which of the following is NOT a function of money?
A: a store of value
B: a medium of exchange for settling economic transactions
C*: a claim to future cash flows
D: short-term protection against inflation
16 1
, Test bank- Mid Exam - Test bank questions for mid exam.
Financial Markets (FINS5512)
7: Buyers of financial claims lend their excess funds as they:
A: expect to borrow extra funds in the future
B*: want surplus funds in the future
C: want to invest in the future
D: want to increase their costs relative to their incomes
8: Sellers of financial claims promise to pay back borrowed funds:
A: by borrowing extra funds in the future
B*: based on their expectation of having surplus funds in the future
C: by selling other assets
D: by reducing their costs relative to their incomes
9: A savings-surplus unit is one:
A: that needs to borrow funds from a surplus unit
B*: whose income exceeds its spending
C: whose spending exceeds its income
D: that generally is a company
10: The process of facilitating the flow of funds between borrowers and lenders
performed by the financial system:
A: is hindered by the problem of ‘double coincidence of wants’
B: greatly reduces the probability of inflation
C*: increases the rate of economic growth of a country
D: occurs only through financial intermediaries
11: Both real and financial assets have four principal attributes that are significant
factors in the investment decision process. These are:
I. liquidity
II. capital gain
III. risk
IV. return or yield
V. time pattern of future cash flows
VI. price and cash flow volatility
A: I, II, III, IV
B*: I, III, IV, V
C: I, III, IV, VI
D: II, III, IV, V
16 1
