Financial Markets & Institutions Chapter 1 Exam Review Questions
And Answers 100% Verified!!!
1. Financial markets and institutions D) do all of the above
A) involve the movement of huge quantities of money.
B) affect the profits of businesses.
C) affect the types of goods and services produced in
an economy.
D) do all of the above.
E) do only A and B.
2. Financial market activities affect D) all of the above
A) personal wealth
B) spending decisions by individuals and business
firms.
C) the economy's location in the business cycle.
D) all of the above.
3. Markets in which funds are transferred from those D) financial markets
who have excess funds available to those who have a
shortage of available funds are called
A) commodity markets
B) funds market
C) derivative exchange markets
D) financial markets
4. The price paid for the rental of borrowed funds (usually C) interest rate
expressed as a percentage of the rental of $100 per
year) is commonly referred to as the
A) inflation rate
B) exchange rate
C) interest rate
D) aggregate price level
, Financial Markets & Institutions Chapter 1 Exam Review Questions
And Answers 100% Verified!!!
5. The bond markets are important because B) they are markets where
A) they are easily the most widely followed financial interest rates are deter-
markets in the US mined
B) they are markets where interest rates are deter-
mined
C) they are the markets where foreign exchange rates
are determined
D) all of the above
6. Interest rates are important to financial institutions B) increases; increases
since an interest rate the cost of acquiring
funds and the income from assets.
A) decreases; decreases
B) increases; increases
C) decreases; increases
D) increases; decreases
7. Typically, increasing interest rates B) discourages corporate
A) discourage individuals from saving investments
B) discourages corporate investments
C) encourages corporate expansion
D) encourages corporate borrowing
E) none of the above
8. Compared to interest rates on long-term US govern- D) three-month Treasury
ment bonds, interest rates on fluctuate bills
more and are lower on average.
A) medium-quality corporate bonds
B) low-quality corporate bonds
C) high-quality corporate bonds
And Answers 100% Verified!!!
1. Financial markets and institutions D) do all of the above
A) involve the movement of huge quantities of money.
B) affect the profits of businesses.
C) affect the types of goods and services produced in
an economy.
D) do all of the above.
E) do only A and B.
2. Financial market activities affect D) all of the above
A) personal wealth
B) spending decisions by individuals and business
firms.
C) the economy's location in the business cycle.
D) all of the above.
3. Markets in which funds are transferred from those D) financial markets
who have excess funds available to those who have a
shortage of available funds are called
A) commodity markets
B) funds market
C) derivative exchange markets
D) financial markets
4. The price paid for the rental of borrowed funds (usually C) interest rate
expressed as a percentage of the rental of $100 per
year) is commonly referred to as the
A) inflation rate
B) exchange rate
C) interest rate
D) aggregate price level
, Financial Markets & Institutions Chapter 1 Exam Review Questions
And Answers 100% Verified!!!
5. The bond markets are important because B) they are markets where
A) they are easily the most widely followed financial interest rates are deter-
markets in the US mined
B) they are markets where interest rates are deter-
mined
C) they are the markets where foreign exchange rates
are determined
D) all of the above
6. Interest rates are important to financial institutions B) increases; increases
since an interest rate the cost of acquiring
funds and the income from assets.
A) decreases; decreases
B) increases; increases
C) decreases; increases
D) increases; decreases
7. Typically, increasing interest rates B) discourages corporate
A) discourage individuals from saving investments
B) discourages corporate investments
C) encourages corporate expansion
D) encourages corporate borrowing
E) none of the above
8. Compared to interest rates on long-term US govern- D) three-month Treasury
ment bonds, interest rates on fluctuate bills
more and are lower on average.
A) medium-quality corporate bonds
B) low-quality corporate bonds
C) high-quality corporate bonds
