I. Money likely to be needed within six months
II. Money to be set aside for college in 10 years
III. Money to provide supplemental retirement income
IV. Money to be used to provide for children in the event of death
1. Depository institutions
2. Insurer
3. Pension fund
4. Stocks or bonds
2, 3, 4, 1
1, 4, 2, 3
3, 2, 1, 4
1, 4, 3, 2
4, 2, 1, 3
References
Multiple Choice Difficulty: 2 Medium
As of 2019, which one of the following derivatives instruments had the greatest amount of notional
principal outstanding?
Futures
Swaps
Options
Bonds
Forwards
References
Multiple Choice Difficulty: 1 Easy
29.
Award: 10.00 points
30.
Award: 10.00 points
Which of the following is/are money market instrument(s)?
Negotiable CDs
Common stock
T-bonds
4-year maturity corporate bond
Negotiable CDs, common stock, and T-bonds
References
Multiple Choice Difficulty: 1 Easy
The Securities Exchange Commission (SEC) does not:
decide whether a public issue is fairly priced.
decide whether a firm making a public issue has provided enough information for investors
to decide whether the issue is fairly priced.
require exchanges to monitor trading to prevent insider trading.
attempt to reduce excessive price fluctuations.
monitor the major securities exchanges.
References
Multiple Choice Difficulty: 2 Medium
31.
Award: 10.00 points
32.
Award: 10.00 points
The most diversified type of depository institutions is:
credit unions.
savings associations.
commercial banks.
finance companies.
mutual funds.
References
Multiple Choice Difficulty: 2 Medium
Insolvency risk at a financial intermediary (FI) is the risk:
that promised cash flows from loans and securities held by FIs may not be paid in full.
incurred by an FI when the maturities of its assets and liabilities do not match.
that a sudden surge in liability withdrawals may require an FI to liquidate assets quickly at
fire sale prices.
incurred by an FI when its investments in technology do not result in cost savings or
revenue growth.
that an FI may not have enough capital to offset a sudden decline in the value of its assets.
References
Multiple Choice Difficulty: 2 Medium
33.
Award: 10.00 points
34.
Award: 10.00 points
Depository institutions (DIs) play an important role in the transmission of monetary policy from the
Federal Reserve to the rest of the economy because:
loans to corporations are part of the money supply.
bank and thrift loans are tightly regulated.
U.S. DIs compete with foreign financial institutions.
DI deposits are a major portion of the money supply.
thrifts provide a large amount of credit to finance residential real estate.
References
Multiple Choice Difficulty: 2 Medium
Liquidity risk at a financial intermediary (FI) is the risk:
that promised cash flows from loans and securities held by FIs may not be paid in full.
incurred by an FI when the maturities of its assets and liabilities do not match.
that a sudden surge in liability withdrawals may require an FI to liquidate assets quickly at
fire sale prices.
incurred by an FI when its investments in technology do not result in cost savings or
revenue growth.
that an FI may not have enough capital to offset a sudden decline in the value of its assets.
References
Multiple Choice Difficulty: 2 Medium
35.
Award: 10.00 points
36.
Award: 10.00 points
Money markets trade securities that:
I. mature in one year or less.
II. have little chance of loss of principal.
III. must be guaranteed by the federal government.
I only
II only
I and II only
I and III only
I, II, and III
References
Multiple Choice Difficulty: 1 Easy
Which of the following are capital market instruments?
10-year corporate bonds
30-year mortgages
20-year Treasury bonds
15-year U.S. government agency bonds
All of these choices are correct.
References
Multiple Choice Difficulty: 1 Easy
37.
Award: 10.00 points
38.
Award: 10.00 points
Commercial paper is a: