week 5 midterm exam

 

Question 1

 

 

The Federal Reserve creates money by

 

Question 2

 

 

During the 2000s, banks became complacent about making mortgage loans because

 

Question 3

 

 

The policymaking institution that determines the money supply, sets the rules for how checks are cleared and how banks obtain new currency, and determines what activities banks may or may not engage in and whether banks are operating in a prudent fashion is the

 

Question 4

 

 

Economists who try to predict recessions find that recessions are

 

Question 5

 

 

Maturity is

 

Question 6

 

 

A financial intermediary specializes in knowing about people who apply for loans. The intermediary knows how to evaluate credit histories and the probabilities that borrowers will repay. These facts are examples of which of the following functions of financial intermediaries?

 

Question 7

 

 

Dividends are

 

Question 8

 

 

In the 1980s, the United States suffered one of its worst financial crises when ____ began to fail in large numbers.

 

Question 9

 

 

Inflation affects money because

 

Question 10

 

 

M1 consists of

 

Question 11

 

 

Outside money is

 

Question 12

 

 

U.S. currency is currently

 

Question 13

 

 

A perpetuity is a debt security

 

Question 14

 

 

A debt security with just one payment is called a

 

Question 15

 

 

The amount of money you would need to invest today to yield a given future amount is called

 

Question 16

 

 

A fixed-payment security is a debt security

 

Question 17

 

 

What does a flat yield curve imply, according to the expectations theory of the term structure of interest rates?

 

Question 18

 

 

Usually in recessions, short-term interest rates ____ and long-term interest rates ____.

 

Question 19

 

 

The ten-year bond that was the most recently issued is known as the

 

Question 20

 

 

According to the expectations theory of the term structure of interest rates,

 

Question 21

 

 

The nominal interest rate adjusted for expected inflation is the

 

Question 22

 

 

The hypothesis that an increase in the expected inflation rate will cause the nominal interest rate to rise and the real interest rate to remain unchanged is the

 

Question 23

 

 

In recessions, the long-term expected real interest rate usually

 

Question 24

 

 

Another name for the realized real interest rate is the

 

Question 25

 

 

In the CAPM, the risk to a stock's return that is attributable to the fluctuations in the overall stock market

 

Question 26

 

 

Fundamental value is the ________ value of expected earnings of a company or of all companies in the stock market as a whole.

 

Question 27

 

 

A theory that investors do not have rational expectations is called ________ expectations.

 

Question 28

 

 

In the CAPM, systematic risk

 

Question 29

 

 

The risk that market interest rates may change, affecting the value of a bank's assets and liabilities, is known as

 

Question 30

 

 

The discount rate is the interest rate on

 

Question 31

 

 

A bank offers credit cards with a 25 percent interest rate, when its competitors' cards have just a 15 percent interest rate. Despite the high rate, the bank finds itself losing money because many of its customers fail to repay the balances on their cards. The bank's losses are most likely to have occurred because of

 

Question 32

 

 

Which size category of banks generally has the largest spread?

 

 

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Status NEW Posted 18 Jan 2019 03:01 PM My Price 10.00

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