Spring 2010 Midterm

Spring 2010 Midterm - Fin 353 Midterm Questions Spring 2010...

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Fin 353 Midterm Questions Spring 2010 Instructor: Deniz K. Tudor 1. In US, the discount rate has been set to be higher than the federal funds rate since 2003, emphasizing the lender of last resort function of the Federal Reserve. a) True b) False 2. Both the assets and liabilities of Federal Reserve Bank will increase if the reserve requirement increases from 10% to 15%. a) True b) False 3. The balance sheets of financial firms have deposits on the liabilities side. a) True b) False 4. When the Fed follows an expansionary policy one of the probable effects on the economy is that interest rates increase. a) True b) False 5. When the Fed follows an expansionary policy one of the possible effects on the economy is that inflation increases. a) True b) False 6. The forward rate for a two-period loan that matures at time 12 if yield_12=6.5% and yield_10=5.5% is=? a) 10.6% b) 11.6% c) 12.6% d) 13.6% 7. Which one of the following is not a utility based theory of term structure of interest rates? a) Pure Expectations Theory b) Market Segmentation Theory c) Liquidity Preference Theory d) Arbitrage Pricing Theory 8. Which one of the following is not on the assets side of the current Federal Reserve Balance Sheet? a) Treasury Currency b) SDR Certificates c) Reverse Repurchase Agreements 1
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d) US Treasury Securities e) Maiden Lane I 9. Which one of the following is not on the liabilities side of the Federal Reserve Balance Sheet? a) Depository Institution Reserves
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This note was uploaded on 11/18/2011 for the course FIN 353 taught by Professor Cobus during the Fall '08 term at S.F. State.

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Spring 2010 Midterm - Fin 353 Midterm Questions Spring 2010...

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