Practice_Exam_I_Part_2_ANS - Practice Midterm Exam 1 ANSWERS ECO 21000 Money and Banking 25 September 2015 Part 1 Multiple Choice(50 Points 1 Which of

Practice_Exam_I_Part_2_ANS - Practice Midterm Exam 1...

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Practice Midterm Exam 1 ANSWERS ECO 21000: Money and Banking 25 September 2015 Part 1: Multiple Choice (50 Points) 1. Which of the following can be described as involving direct finance? A)A corporation issues new shares of stock.B)People buy shares in a mutual fund.C)A pension fund manager buys a short-term corporate security in the secondary market.D)An insurance company buys shares of common stock in the over-the-counter markets.Answer:A 2. Which of the following statements about financial markets and securities is true? A)A bond is a long-term security that promises to make periodic payments called dividends to thefirms residual claimants.B)A debt instrument is intermediate term if its maturity is less than one year.C)A debt instrument is intermediate term if its maturity is ten years or longer.D)The maturity of a debt instrument is the number of years (term) to that instruments expirationdate.Answer:D
3. When I purchase, I own a portion of a firm and have the right to vote on issuesimportant to the firm and to elect its directors. A)bondsB)billsC)notesD)stock 4. Currency includes A) paper money and coins. 1
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B) paper money, coins, and checks. C) paper money and checks. D) paper money, coins, checks, and savings deposits. Answer: A
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  • Fall '15
  • eric
  • percent coupon bond, fund manager, coupon bond selling

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