Cecchetti3e_MCQuiz_Ch03_FINAL copy

Cecchetti3e_MCQuiz_Ch03_FINAL copy - Chapter 3 Financial...

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Chapter 3 Financial Instruments, Financial Markets and Financial Institutions Multiple Choice Questions 1. Mary purchases a U.S. Treasury bond; the bond is: A. An asset of the U.S. government as well as an asset for Mary. B. A liability of the U.S. government and an asset for Mary. C. An asset for Mary but not a liability of the U.S. Government. D. An asset for the government but a liability for Mary. Ans: B Difficulty: Easy Topic: Financial Instruments 2. More detailed financial instruments tend to be: A. Less costly because all possible contingencies are covered. B. More costly because they will cost more to create. C. More desirable than less detailed ones, no matter what the price. D. Less costly because they can be standardized more easily. Ans: B Difficulty: Medium Topic: Financial Instruments 3. Asymmetric information in financial markets is a potential problem usually resulting from: A. Borrowers having more information than the lenders, and not disclosing this information. B. Lenders having more information than borrowers and not disclosing this information. C. The fact that people are basically dishonest. D. The uncertainty about Federal Reserve monetary policy.
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This document was uploaded on 10/26/2011 for the course FIN 320 at DePaul.

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Cecchetti3e_MCQuiz_Ch03_FINAL copy - Chapter 3 Financial...

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