FINANCE 301
FINANCE 301 EXAM QUESTIONS AND ANSWERS %
CORRECT.
True or false- In a loan participation agreement, normally all of the participating
banks are exposed to credit (default) risk answer >>>> True
The main use of bank funds is for answer >>>> loans
Transaction deposits do not include answer >>>> NCDs
According to pure expectations theory, short-term rates will exceed long-term
rates whenever market participants expect short-term rates to increase in the
future answer >>>> false
Investors can sell exchange-traded funds short.
a. True
b. False answer >>>> true
Because money market funds contain instruments with short-term maturities,
their market values are not very sensitive to movements in market interest rates.
answer >>>> True
, FINANCE 301
Hedge funds are more heavily regulated than mutual funds answer >>>> false
focus on a group of companies sharing a particular characteristic answer >>>>
specialty
When an investor purchases a six month (182 day) T-bill with a $10,000 par value
for $9,700 the T-bill discount is ______ percent answer >>>> ______
Freeman Corp., a large corporation, plans to issue 45-day commercial paper with
a par value of $3,000,000. Freeman expects to sell the commercial paper for
$2,947,000. Freeman's annualized cost of borrowing is estimated to be ____
percent. answer >>>> ____
True or false: A bonds price decreases when its yield to maturity falls answer >>>>
False
True or false: A stop-loss order is a particular type of limit order whereby the
investor specifies a selling price that is below the current market price of the
stock answer >>>> True
A____ from broker requires the investor to put up additional collateral answer
>>>> margin call
_____ is/are least likely to be used as a method of reducing interest rate risk
answer >>>> stock options
____________ is not a method used to assess interest rate risk answer >>>>
Efficiency analysis
FINANCE 301 EXAM QUESTIONS AND ANSWERS %
CORRECT.
True or false- In a loan participation agreement, normally all of the participating
banks are exposed to credit (default) risk answer >>>> True
The main use of bank funds is for answer >>>> loans
Transaction deposits do not include answer >>>> NCDs
According to pure expectations theory, short-term rates will exceed long-term
rates whenever market participants expect short-term rates to increase in the
future answer >>>> false
Investors can sell exchange-traded funds short.
a. True
b. False answer >>>> true
Because money market funds contain instruments with short-term maturities,
their market values are not very sensitive to movements in market interest rates.
answer >>>> True
, FINANCE 301
Hedge funds are more heavily regulated than mutual funds answer >>>> false
focus on a group of companies sharing a particular characteristic answer >>>>
specialty
When an investor purchases a six month (182 day) T-bill with a $10,000 par value
for $9,700 the T-bill discount is ______ percent answer >>>> ______
Freeman Corp., a large corporation, plans to issue 45-day commercial paper with
a par value of $3,000,000. Freeman expects to sell the commercial paper for
$2,947,000. Freeman's annualized cost of borrowing is estimated to be ____
percent. answer >>>> ____
True or false: A bonds price decreases when its yield to maturity falls answer >>>>
False
True or false: A stop-loss order is a particular type of limit order whereby the
investor specifies a selling price that is below the current market price of the
stock answer >>>> True
A____ from broker requires the investor to put up additional collateral answer
>>>> margin call
_____ is/are least likely to be used as a method of reducing interest rate risk
answer >>>> stock options
____________ is not a method used to assess interest rate risk answer >>>>
Efficiency analysis
