ECO 320 MIDTERM EXAM 2023 Business Finance
2023 Question 1 5 out of 5 points Which of the following
· Question 1
5 out of 5 points
Which of the following is an example of a financial market?
· Question 2
5 out of 5 points
Identify which item is not one of the six parts of the financial system.
· Question 3
5 out of 5 points
“When an individual obtains a car loan and makes all of the regular monthly payments, the sum of the payments made will exceed the purchase price of the car. This is due primarily to the core principle:”
· Question 4
The future value of $100 that earns 10% annually for n years is best expressed by which of the following?
· Question 5
5 out of 5 points
The future value of $100 at a 5% per year interest rate at the end of one year is:
· Question 6
5 out of 5 points
Which of the following best expresses the proceeds a lender receives from a one-year simple loan when the annual interest rate equals i?
· Question 7
5 out of 5 points
The shorter the time until a payment the:
· Question 8
5 out of 5 points
As a company issues more debt:
· Question 9
5 out of 5 points
People who claim to have the ability to accurately predict the future prices of stocks:
· Question 10
“As the corporation uses more debt financing, which of the following holds true for the stockholders?”
· Question 11
5 out of 5 points
Which of the following could cause a stock market bubble?
· Question 12
5 out of 5 points
A primary financial market is:
· Question 13
5 out of 5 points
A futures contract is an example of:
· Question 14
5 out of 5 points
The fundamental characteristics influencing the value of a financial instrument include each of the following except:
· Question 15
“If Americans develop a greater appreciation for Mexican-made goods, we should observe the following change in the dollar-peso market:”
· Question 16
If the Japanese yen appreciates against the U.S. dollar:
· Question 17
The nominal exchange rate:
· Question 18
5 out of 5 points
An American traveling to Europe will find it easier to make purchases now because:
· Question 19
5 out of 5 points
When the yield curve is downward sloping:
· Question 20
5 out of 5 points
A flight to quality refers to a move by investors:
· Question 21
If the Federal Reserve surprises investors by announcing an easing of monetary policy:
· Question 22
5 out of 5 points
Under the liquidity premium theory a flat yield curve implies:
· Question 23
“The primary difference in certificates of deposit (CDs) that are equal to or less than $100,000 and those over $100,000 (other than the amount) is:”
· Question 24
5 out of 5 points
“Considering the balance sheet for all commercial banks in the U.S., the largest category of assets is:”
· Question 25
5 out of 5 points
Repurchase agreements are usually used by banks that:
· Question 26
5 out of 5 points
“If the probability of an outcome equals one, the outcome:”
· Question 27
5 out of 5 points
“All other factors held constant, an investment:”
· Question 28
5 out of 5 points
“If an investment has a 20% (0.20) probability of returning $1,000; a 30% (0.30) probability of returning $1,500; and a 50% (0.50) probability of returning $1,800; the expected value of the investment is:”
· Question 29
5 out of 5 points
Diversification is the principle of:
· Question 30
Which best describes money as a means of payment?
· Question 31
5 out of 5 points
U.S. currency is
· Question 32
5 out of 5 points
To say an asset is liquid implies that:
· Question 33
5 out of 5 points
The purchasing power of money:
· Question 34
“As general business conditions improve, we would witness the following in the bond market:”
· Question 35
5 out of 5 points
When the price of a bond is above face value the yield to maturity:
· Question 36
“If the purchase price of a bond exceeds the face value, the yield to maturity:”
· Question 37
5 out of 5 points
“A 10-year Treasury note as a face value of $1,000, price of $1,200, and a 7.5% coupon rate. Based on this information, we know the:”
· Question 38
5 out of 5 points
“Mary Jones is the president of a local bank. She knows that half of the loan applicants in town she would classify as high risk and the other half as low risk. She observes that the other banks in town charge two different interest rates, a lower rate for low risk borrowers and the higher rate for high risk borrowers. She decides that to have an advantage over the other banks she will offer an average rate to everyone. The likely result will be:”
· Question 39
5 out of 5 points
Two problems that arise from asymmetric information are:
· Question 40
Most individuals save at banks rather than lend directly because:
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