PT Ch21

PT Ch21 - Exam Name_ MULTIPLE CHOICE. Choose the one...

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Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the below statements is FALSE? 1) A) Investing in bankers acceptances exposes the investor to credit risk. B) The Federal Reserve imposes a reserve requirement on funds raised via bankers acceptances that are ineligible. C) An accepting bank that has decided to retain a bankers acceptance in its portfolio may be able to use it as collateral for a loan at the discount window of the Federal Reserve. D) The Federal Reserve imposes no limit on the amount of eligible bankers acceptances that may be issued by a bank. 2) ________ is an interest rate that changes periodically in accordance with a predetermined formula that indicates the spread (or margin) above some index at which the rate will reset periodically. 2) A) A domestic CD B) A floating - rate CD C) A fixed - rate CD D) An Eurodollar CD 3) CDs can be classified into four types, according to the issuing institution. Which of the below is NOT on of these four types? 3) A) CDs issued by domestic banks B) Economy CDs C) Eurodollar CDs D) Yankee CD 4) A depository institution that keeps federal funds in excess of the amount required incurs ________, which is the loss of interest income that could be earned on the excess reserves. 4) A) an opportunity cost B) an interest income cost C) a federal funds cost D) None of these 5) Through its ________ that lower or raise the level of excess reserves in the banking system, the Fed will often change the fed funds rate as part of its effort to change the rate of activity in the country's economy. 5)
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PT Ch21 - Exam Name_ MULTIPLE CHOICE. Choose the one...

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