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Permalink Reply by Yasmeen(S.admin) on December 20, 2011 at 1:04pm

Question # 1 of 15 ( Start time: 01:05:54 PM ) Total Marks: 1

If the required reserve ratio is equal to 10%, a single bank can increase its loans up to a maximum amount equal to:

Select correct option

10% of its excess reserves

Its excess reserves

10 times its excess reserves

Its total reserves

 

Question # 2 of 15 ( Start time: 01:06:45 PM ) Total Marks: 1

One argument for an independent central bank is:

Select correct option

Without independence competent people would not take a position in a central bank

Successful monetary policy requires a long time horizon usually well beyond the next election of most public officials

Politicians have a long-run focus that is not well tuned to addressing economic problems

Central bankers have a short run focus that usually corrects problems faster

 

Question # 3 of 15 ( Start time: 01:07:29 PM ) Total Marks: 1

If YTM equals the coupon rate the price of the bond is ________.

Select correct option:

Greater than its face value

Lower than its face value

Equals to its face value

Insufficient information

 

Question # 4 of 15 ( Start time: 01:08:07 PM ) Total Marks: 1

Home loans and car loans are the example of which one of the following?

Select correct option

Mortgage loans

Pledge

Fixed Payment Loans

Ordinary loan

 

Question # 5 of 15 ( Start time: 01:08:43 PM ) Total Marks: 1

At which money aggregate definitions relation is stronger with inflation and growth

Select correct option

M1

M2

M3

None of above

 

Question # 6 of 15 ( Start time: 01:09:28 PM ) Total Marks: 1

The shape of the yield curve is usually:

Select correct option

Upward sloping

Downward sloping

Upward sloping for shorter maturities and downward sloping for longer maturities

Flat

 

Question # 7 of 15 ( Start time: 01:09:52 PM ) Total Marks: 1

It arises when banks make additional profit by using derivatives

Select correct option

It arises when loan is not repaid

It arises because of sudden demands of funds

It arises when two sides of the balance sheet do not match up

It arises when banks make additional profit by using derivatives

 

Question # 8 of 15 ( Start time: 01:10:52 PM ) Total Marks: 1

Securities are sometimes called as _________.

Select correct option

Secondary reserves

Primary reserve

Excessive reserve

Extra reserve

 

Question # 9 of 15 ( Start time: 01:12:27 PM ) Total Marks: 1

If the required reserve ratio is 20%, the simple deposit multiplier is:

Select correct option

5.0

2.5

4.0

10.0

 

Question # 10 of 15 ( Start time: 01:13:02 PM ) Total Marks: 1

What is true relationship between return and risk?

Select correct option

Lower the risk greater the return

Greater the risk greater the return

Greater the risk the return will remain constant

No relationship between them

 

Question # 11 of 15 ( Start time: 01:13:36 PM ) Total Marks: 1

If information in a financial market is asymmetric, this means:

Select correct option

Borrowers and lenders have perfect information

Borrowers would have more information than lenders

Borrowers and lenders have the same information

Lenders lack any information

 

Question # 12 of 15 ( Start time: 01:14:12 PM ) Total Marks: 1

Of the four players in the money supply process, most observers agree that in the simple money supply model the most important player is:

Select correct option

Banks

Borrowers

Depositors

The Federal Reserve System

 

Question # 13 of 15 ( Start time: 01:14:49 PM ) Total Marks: 1

Which of the following type/s of transaction/s affect the balance sheets of both the central bank and the banking system?

Select correct option

An open market operation

A foreign exchange intervention

Central bank’s extension of a discount loan

All of the given options

 

Question # 14 of 15 ( Start time: 01:15:23 PM ) Total Marks: 1

Which one of the following agencies assesses the default risk of different issuers?

Select correct option

Insurance companies

Bond issuing

Credit rating

Recruitment agencies

 

Question # 15 of 15 ( Start time: 01:15:55 PM ) Total Marks: 1

Which of the following are the primary uses of funds of depositror institution?

Select correct option

Cash, loans, securities

Corporate bonds, Government bonds, Stocks

Commercial paper, Bonds, Mortgages

Mortgages, Consumer loans, Business loans

 

Permalink Reply by Yasmeen(S.admin) on December 20, 2011 at 1:08pm

Question # 1 of 15 ( Start time: 01:21:19 PM ) Total Marks: 1

Which of the following is a role of a financial institution acting as a financial intermediary?

Select correct option:

Pooling the resources of small savers

Formulating oversight regulations

Sending out free calendars at the holidays

Lobbying legislators

 

Question # 2 of 15 ( Start time: 01:21:50 PM ) Total Marks: 1

High-powered money less reserves equals:

Select correct option

Required reserves

Currency in circulation

The monetary base

The non-borrowed monetary base

 

Question # 3 of 15 ( Start time: 01:22:36 PM ) Total Marks: 1

In which of the following bonds we may ignore the default risk?

Select correct option

Privately issued bonds

Government issued bonds

Bonds issued by Corporate

All of the given options

 

Question # 4 of 15 ( Start time: 01:23:03 PM ) Total Marks: 1

You start with a $1000 portfolio; it loses 40% over the next year, the following year it gains 50% in value; At the end of two years the worth of your portfolio will be:

Select correct option

$900

$600

$1000

$1100

 

Question # 5 of 15 ( Start time: 01:23:37 PM ) Total Marks: 1

Liquidity is the risk that is arises as a result of which one of the following consequences?

Select correct option

It arises when loan is not repaid

It arises because of sudden demands of funds

It arises when two sides of the balance sheet do not match up

It arises when banks make additional profit by using derivatives

 

Question # 6 of 15 ( Start time: 01:24:20 PM ) Total Marks: 1

Which of the following best describes default risk?

Select correct option

The chance the issuer will be unable to make interest payments or repay principal

The chance the issuer will retire the debt earlyThe chance the issuing firm will be sold to another firm

The chance the issuer will sell more debt

 

Question # 7 of 15 ( Start time: 01:24:43 PM ) Total Marks: 1

Which of the following expresses 6.5%?

Select correct option

0.0065

6.50

0.650

0.0650

 

Question # 8 of 15 ( Start time: 01:26:43 PM ) Total Marks: 1

Which of the following type/s of transaction/s affect the balance sheets of both the central bank and the banking system?

Select correct option

An open market operation

A foreign exchange intervention

Central bank’s extension of a discount loan

All of the given options

 

Question # 9 of 15 ( Start time: 01:25:46 PM ) Total Marks: 1

A risk-averse investor will:

Select correct option

Always prefer an investment with a lower expected return

Always prefer an investment with a certain return to one with the same expected return but any amount of uncertainty

Always require a certain return

Always focus exclusively on the expected return

 

Question # 10 of 15 ( Start time: 01:26:21 PM ) Total Marks: 1

What is true about the relationship between standard deviation and risk?

Select correct option

Greater the standard deviation greater will be the risk

Greater the standard deviation lower will be the risk

Greater the standard deviation risk remains the same

No relation between them

 

Question # 11 of 15 ( Start time: 01:26:50 PM ) Total Marks: 1

With direct finance we mean which of the following?

Select correct option

Individuals (or firms) borrow directly from the savers

Individuals (or firms) borrow directly from banks.

Individuals deposit savings directly in banks.

Firms deposit savings directly in banks.

 

Question # 12 of 15 ( Start time: 01:27:24 PM ) Total Marks: 1

Which of the following NOT true for financial institutions?

Select correct option

It reduces the transaction cost

It reduce the information costIt reduces the asymmetric information

It doesn’t make long term loans

 

Question # 13 of 15 ( Start time: 01:28:07 PM ) Total Marks: 1

The broad class of securities firms includes which of the following?

Select correct option

Brokerages

Investment banks

Mutual fund companies

All of the given options

 

Question # 14 of 15 ( Start time: 01:28:50 PM ) Total Marks: 1

You receive a check for $100 two years from today. The discounted present value of this $100 is:

Select correct option

$100/(1+i)

$100*(1+i)2

$100*(1+i)

$100/(1+i)2

 

Question # 15 of 15 ( Start time: 01:29:22 PM ) Total Marks: 1

_________ include savings and time deposits and account for nearly two-thirds of all commercial

bank liabilities.

Select correct option

Non transactions Deposits

Borrowings

Checkable Deposits

Discount loans