Introduction to Corporate Finance 5th Canadian Edition by Laurence Booth test bank
Answer: a
Type: Definition
Difficulty: Easy
Learning Objective: List the major financial and real assets held by Canadians.
Section Reference: Real versus Financial Assets
Blooms: Knowledge
AACSB: Analytic
CPA: Finance
8. If Canadian households, in aggregate, own real assets with a market value of $3.194 trillion, and also own net financial assets with a market value of $2.344 trillion, the total net assets of Canadian households have a market value of
a) $3.194 trillion
b) $5.538 trillion
c) $–0.850 trillion
d) $0.850 trillion
Answer: b
Type: Calculation
Difficulty: Easy
Learning Objective: List the major financial and real assets held by Canadians.
Section Reference: Real versus Financial Assets
Feedback: $5.538 = $3.194 + $2.344
Blooms: Application
AACSB: Analytic
CPA: Finance
9. Given the following hypothetical information regarding the real and financial assets in Canada for 2022 (numbers in $ billions):
Real Assets
Net Financial Assets
Government
677
–658
Business
2,202
–1,635
Households
3,194
2,344
What is the value of the total net assets in Canada for 2022?
a) $5,842 billion
b) $6,086 billion
c) $6,124 billion
d) $6,105 billion
Answer: c
Type: Calculation
Difficulty: Medium
Learning Objective: List the major financial and real assets held by Canadians.
Section Reference: Real versus Financial Assets
Feedback: $6,124 = $677 + $2,202 + $3,194 – $658 – $1,635 + $2,344
Blooms: Application
AACSB: Analytic
CPA: Finance
10. You are provided with the following hypothetical information regarding the real and financial assets in Canada for 2022 (numbers in $ billions):
Real Assets
Net Financial Assets
Government
677
–658
Business
2,202
–1,635
Households
3,194
2,344
What is the value of the net financial assets owned by non-residents for 2022?
a) $901 billion
b) $51 billion
c) $2,293 billion
d) There is not enough information to answer the question.
Answer: b
Type: Calculation
Difficulty: Difficult
Learning Objective: List the major financial and real assets held by Canadians.
Section Reference: Real versus Financial Assets
Feedback: $51 billion = $2,344 – $658 – $1,635. The value of net financial assets held by non-residents is equal to the negative of the sum of the net financial assets of government, businesses, and households.
Blooms: Application
AACSB: Analytic
CPA: Finance
11. Which of the following sectors is NOT a user of savings in the economy?
a) business sector
b) household sector
c) government sector
d) banking sector
Answer: b
Type: Concept
Difficulty: Easy
Learning Objective: List the major financial and real assets held by Canadians.
Section Reference: Real versus Financial Assets
Blooms: Knowledge
AACSB: Analytic
CPA: Finance
12. In Canada, the primary provider of funds to business and government is (are)
a) international banks.
b) large Canadian banks.
c) the household sector.
d) market intermediaries.
Answer: c
Type: Definition
Difficulty: Easy
Learning Objective: Explain how money is transferred from lenders to borrowers and the role played by market and financial intermediaries.
Section Reference: The Financial System
Blooms: Knowledge
AACSB: Analytic
CPA: Finance
13. Entities that invest funds on behalf of others and change the nature of the transactions are called
a) brokers.
b) financial intermediaries.
c) dealers.
d) market intermediaries.
Answer: b
Type: Definition
Difficulty: Easy
Learning Objective: Explain how money is transferred from lenders to borrowers and the role played by market and financial intermediaries.
Section Reference: The Financial System
Blooms: Knowledge
AACSB: Analytic
CPA: Finance
14. Joe has just borrowed $5,000 from his aunt in order to make a down payment on a car. This borrowing transaction is an example of
a) indirect intermediation.
b) direct intermediation.
c) external intermediation.