Fall 2010 Midterm

Fall 2010 Midterm - Fin 353, First Midterm Fall 2010...

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Fin 353, First Midterm Fall 2010 Instructor: Deniz K. Tudor You have one hour for this exam. Each question is worth 1 point. 1. Provisions of the Glass-Steagall Act of 1933 that prohibit a bank holding company from owning other financial companies were repealed by Reigle-Neal Act in 1994. a) True b) False 2. Which one of the following is not a function of the financial system? a) Payments system b) Resource transfer across time and space c) Risk management d) Connectedness 3. If the FOMC wished to generate faster economic growth, they could issue a policy directive to the Federal Reserve Board Trading desk to sell U.S. government securities. a) True b) False 4. Revenue economies of scale are cost reductions that occur as banks add related product lines. a) True b) False 5. One of the disadvantages of using discount rates as a monetary policy tool is that the direct effect of change on the money supply will be uncertain with this method. a) True b) False 6. Federal Reserve System is charged with a) Regulating securities exchanges b) Conducting monetary policy c) Providing payment and other services to a variety of institutions d) Setting bank prime rates e) Both B and C 7. Before 2003 the target fed funds rate was a) below the discount window loan rate b) above the discount window loan rate c) equal to the discount window loan rate 8. A greater degree of convexity is thought of as desirable in bonds. a) True b) False 9. If the Federal Reserve were to sell dollars by buying yen the result would be to _____ the supply of 1
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U.S. dollars and _____ the exchange rate in terms of the number of yen per U.S. dollar. a) Increase, lower
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Fall 2010 Midterm - Fin 353, First Midterm Fall 2010...

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