Chapter 04 - Savings and Payment Services
Savings and Payment Services
True / False Questions
1. (p. 108) When Flo says she's going to "the bank," she may be implying that she is visiting a
credit union or stopping at an ATM.
CHAPTER 9: THE CAPITAL ASSET PRICING MODEL
1. What must be the beta of a portfolio with E(rP) = 18%, if rf = 6% and E(rM) = 14%?
E(rP = rf + P [E(rM ) rf ]
E(rP rf = P [E(rM ) rf ]
P = [E(rP rf ]/[E(rM ) rf ] = [0.18 0.06]/[0.14 0.06] = 0.12/0.08 = 1.
Practice Multiple Choice Questions
Chapter 3: Resources and Trade- The Heckscher-Ohlin
In the 2-factor, 2 good Heckscher-Ohlin model, an influx of workers from across the border
move the point of production along the production possibili
Practice Questions on Chapter 4: Money and Inflation
Assume that the questions are all about the long run.
Name: _ Date: _
1. Economists use the term money to refer to:
C) assets commonly used for transactions.
D) income earned from
1. Which of the following choices best completes the following statement? Explain. An
investor with a higher degree of risk aversion, compared to one with a lower degree, will
prefer investment portfolios
(e) None of the above is true.
CHAPTER 8: INDEX MODELS
1. What are the advantages of the index model compared to the Markowitz procedure for
obtaining an efficiently diversified portfolio? What are its disadvantages?
The Markowitz procedure and the Separation Property is what we used t
BKM CHAPTER 7
1. Which of the following factors reflect pure market risk for a given corporation?
a. Increased short-term interest rates
b. Fire in the corporate warehouse
c. Increased insurance costs
d. Death of the CEO, e. Increased labor costs)
BKM CHAPTER 5
1. The Fisher equation tells us that the real interest rate approximately equals the nominal rate
minus the inflation rate. Suppose the (expected or realized) inflation rate increases from 3% to 5%.
Does the Fisher equation imply that this i
Chapter 4 (6th edition) , Problem 4, 5
In the Ricardian model, labor gains from trade through an increase in its purchasing power. This
result does not support labor union demands for limits on imports from less affluent countries.
Labor may ga
ECON 103- Assignment 1
1. What are the key elements of the scientific method? Define them in my own words.
There are four steps to the scientific method. The first step is to identify the question and define
relevant variables. This st
Which of the following groups is a craft union?
decreasing labor supply
collective bargaining to fix the wage above the competitive level
has not been hired to do the job
teaching a college economics course
Russias economy has been limited due to the fall of the U.S.S.R in the early 1990s and the rapid and
almost instant economic change that occurred in the days, months, and years following the collapse.
Poland however, had a completely different story. Unli
Using supply and demand analysis, describe the effect of each of the following events on the
market for cigarettes: (Your description should include which curve shifts, supply or demand, which way
the curve shifts, left or right, if the equilibrium pri
I personally dont believe happiness can be measured. However, I do believe whether happiness can or
cannot be measured is a very opinionated topic. First of all, everyone has their own definition of
happiness whether it be spending all their moments with
A large chain store such as Wal-Mart could have many advantages as well as many disadvantages to a
small local community. The construction of a large retailer often ushers in many two-sided arguments on
whether or not the store will be good for the commun
Cut and paste this assignment into a Word file. Complete the assignment in that file.
Submit the completed assignment to Blackboard as an attached Word file. Please do
not cut and paste your work into the text box. I will only give credit to assignments
The United States Department of Labors Bureau of Labor Statistics Occupational
Outlook Handbook, offers outlooks on the vast majority of jobs throughout the country. Job
outlooks are basically a summary of the job and inf
The scientific method is a frame for investigating phenomena and determining new
knowledge and/or improving previous knowledge. The scientific method is the process of
making observations, asking questions, using those q
We have been using the same set of data (Data Set One) in the notes to illustrate production and costs. I
have provided Data Set One in both tables below. When costs were calculated in the notes, fixed costs
were $200. By using the term fixed costs econom
Chapter 10 - Arbitrage Pricing Theory and Multifactor Models of Risk and Return
Arbitrage Pricing Theory and Multifactor Models of Risk and Return
Multiple Choice Questions
1. _ a relationship between expected return and risk.
A. APT stipulates
Chapter 05 - Learning about Return and Risk from the Historical Record
Learning about Return and Risk from the Historical Record
Multiple Choice Questions
1. Over the past year you earned a nominal rate of interest of 10 percent on your money.
Practice Multiple Choice Questions
Chapters 5 and 6:
Increasing Returns to Scale in
Production and International Trade
Internal economies of scale arise when the cost per unit
rises as the industry grows larger.
falls as the industry grows larger
Chapter 14 Theory of Financial Structure
14.1 Multiple Choice Questions
1) Of the following sources of external finance for American nonfinancial businesses,
the least important is
A) loans from banks.
C) bonds and commercial paper.
D) loans fr
Chapter 11 The Mortgage Markets
11.1 Multiple Choice
1) Which of the following are important ways in which mortgage markets differ from
the stock and bond markets?
A) The usual borrowers in the capital markets are government entities and
Chapter 16 Commercial Banking Industry:
Structure and Competition
16.1 Multiple Choice
1) The modern commercial banking system began in America when the
A) Bank of United States was chartered in New York in 1801.
B) Bank of North America was chartered in
Chapter 19 Insurance Companies and Pension Funds
19.1 Multiple Choice
1) The earliest form of insurance was _ insurance.
D) property and casualty
2) Adverse selection occurs when those _ likely to get _ insurance
Chapter 21 Investment Banks, Brokerage Firms, and Mutual Funds
21.1 Multiple Choice
1) An investment bank is a financial institution that
A) bundles small deposits into larger loans.
B) helps corporations raise funds.
C) holds most of its assets in commer
Chapter 22 Risk Management in Financial Institutions 22.1 Multiple Choice
1) Banks face the problem of _ in loan markets because bad credit risks are the ones most likely to seek bank loans. A) adverse selection B) moral hazard C) moral suasion D) intenti
Chapter 23 Hedging with Financial Derivatives
23.1 Multiple Choice
1) Financial derivatives include
D) none of the above.
2) Financial derivatives include
C) forward contracts.
D) both (A) an