金融市场与机构(第六版)测试银行ch094368.pdf

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1、1 Financial Markets and Institutions,6e(Mishkin/Eakins)Chapter 9 The Money Markets 9.1 Multiple Choice 1)Activity in money markets increased significantly in the late 1970s and early 1980s because of A)rising short-term interest rates.B)regulations that limited what banks could pay for deposits.C)bo

2、th A and B.D)neither(a)nor(b).Answer:C Question Status:Previous Edition 2)Money market securities have all the following characteristics except they are not A)short term.B)money.C)low risk.D)very liquid.Answer:B Question Status:Previous Edition 3)Money market instruments A)are usually sold in large

3、denominations.B)have low default risk.C)mature in one year or less.D)are characterized by all of the above.E)are characterized by only A and B of the above.Answer:D Question Status:Previous Edition 4)The banking industry A)should have an efficiency advantage in gathering information that would elimi

4、nate the need for the money markets.B)exists primarily to mediate the asymmetric information problem between saver-lenders and borrower-spenders.C)is subject to more regulations and governmental costs than are the money markets.D)all of the above are true.E)only A and B of the above are true.Answer:

5、D Question Status:Previous Edition 2 5)In situations where asymmetric information problems are not severe,A)the money markets have a distinct cost advantage over banks in providing short-term funds.B)the money markets have a distinct cost advantage over banks in providing long-term funds.C)banks hav

6、e a distinct cost advantage over the money markets in providing short-term funds.D)the money markets cannot allocate short-term funds as efficiently as banks can.Answer:A Question Status:Previous Edition 6)Brokerage firms that offered money market security accounts in the 1970s had a cost advantage

7、over banks in attracting funds because the brokerage firms A)were not subject to deposit reserve requirements.B)were not subject to the deposit interest rate ceilings.C)were not limited in how much they could borrow from depositors.D)had the advantage of all the above.E)had the advantage of only A a

8、nd B of the above.Answer:E Question Status:Previous Edition 7)Which of the following statements about the money markets are true?A)Not all commercial banks deal for their customers in the secondary market.B)Money markets are used extensively by businesses both to warehouse surplus funds and to raise

9、 short-term funds.C)The single most influential participant in the U.S.money market is the U.S.Treasury Department.D)All of the above are true.E)Only A and B of the above are true.Answer:E Question Status:Previous Edition 8)Which of the following statements about the money markets are true?A)Most mo

10、ney market securities do not pay interest.Instead the investor pays less for the security than it will be worth when it matures.B)Pension funds invest a portion of their assets in the money market to have sufficient liquidity to meet their obligations.C)Unlike most participants in the money market,t

11、he U.S.Treasury Department is always a demander of money market funds and never a supplier.D)All of the above are true.E)Only A and B of the above are true.Answer:D Question Status:Previous Edition 3 9)Which of the following are true statements about participants in the money markets?A)Large banks p

12、articipate in the money markets by selling large negotiable CDs.B)The U.S.government and corporations borrow in the money markets because cash inflows and outflows are rarely synchronized.C)The Federal Reserve is the single most influential participant in the U.S.money market.D)All of the above are

13、true.E)Only A and B of the above are true.Answer:D Question Status:Previous Edition 10)The most influential participant(s)in the U.S.money market A)is the Federal Reserve.B)is the U.S.Treasury Department.C)are the large money center banks.D)are the investment banks that underwrite securities.Answer:

14、A Question Status:Previous Edition 11)The Fed is an active participant in money markets mainly because of its responsibility to A)lower borrowing costs to encourage capital investment.B)control the money supply.C)increase the interest income of retirees holding money market instruments.D)assist the

15、Securities and Exchange Commission in regulating the behavior other money market participants.Answer:B Question Status:Previous Edition 12)Commercial banks are large holders of _ and are the major issuer of _.A)negotiable certificates of deposit;U.S.government securities B)U.S.government securities;

16、negotiable certificates of deposit C)commercial paper;Eurodollars D)Eurodollars;commercial paper Answer:B Question Status:Previous Edition 13)The primary function of large diversified brokerage firms in the money market is to A)sell money market securities to the Federal Reserve for its open market

17、operations.B)make a market for money market securities by maintaining an inventory from which to buy or sell.C)buy money market securities from corporations that need liquidity.D)buy T-bills from the U.S.Treasury Department.Answer:B Question Status:Previous Edition 14)Finance companies raise funds i

18、n the money market by selling A)commercial paper.B)federal funds.C)negotiable certificates of deposit.D)Eurodollars.Answer:A Question Status:Previous Edition 4 15)Finance companies play a unique role in money markets by A)giving consumers indirect access to money markets.B)combining consumers invest

19、ments to purchase money market securities on their behalf.C)borrowing in capital markets to finance purchases of money market securities.D)assisting the government in its sales of U.S.Treasury securities.Answer:A Question Status:Previous Edition 16)When inflation rose in the late 1970s,A)consumers m

20、oved money out of money market mutual funds because their returns did not keep pace with inflation.B)banks solidified their advantage over money markets by offering higher deposit rates.C)brokerage houses introduced highly popular money market mutual funds,which drew significant amounts of money out

21、 of bank deposits.D)consumers were unable to take advantage of higher rates in money markets because of the requirement of large transaction sizes.Answer:C Question Status:Previous Edition 17)Which of the following is the largest borrower in the money markets?A)commercial banks B)large corporations

22、C)the U.S.Treasury D)U.S.firms engaged in foreign trade Answer:C Question Status:Previous Edition 18)Money market instruments issued by the U.S.Treasury are called A)Treasury bills.B)Treasury notes.C)Treasury bonds.D)Treasury strips.Answer:A Question Status:Previous Edition 19)The Treasury auctions

23、91-day and 182-day Treasury bills once a week.It auctions 52-week bills A)once a month.B)once every 13 weeks.C)once a year.D)every two weeks.Answer:A Question Status:Previous Edition 5 20)Which of the following statements are true of Treasury bills?A)The market for Treasury bills is extremely deep a

24、nd liquid.B)Occasionally,investors find that earnings on T-bills do not compensate them for changes in purchasing power due to inflation.C)By volume,most Treasury bills are sold to individuals who submit noncompetitive bids.D)All of the above are true.E)Only A and B of the above are true.Answer:E Qu

25、estion Status:Previous Edition 21)Suppose that you purchase a 91-day Treasury bill for$9,850 that is worth$10,000 when it matures.The securitys annualized yield if held to maturity is about A)4 percent.B)5 percent.C)6 percent.D)7 percent.Answer:C Question Status:Previous Edition 22)Suppose that you

26、purchase a 182-day Treasury bill for$9,850 that is worth$10,000 when it matures.The securitys annualized yield if held to maturity is about A)1.5%.B)2%.C)3%.D)6%.Answer:C Question Status:Previous Edition 23)Treasury bills do not A)pay interest.B)have a maturity date.C)have a face amount.D)have an ac

27、tive secondary market.Answer:A Question Status:Previous Edition 24)If your competitive bid for a Treasury bill is successful,then you will A)certainly pay less than if you had submitted a noncompetitive bid.B)probably pay more than if you had submitted a noncompetitive bid.C)pay the average of price

28、s offered in other successful competitive bids.D)pay the same as other successful competitive bidders.Answer:B Question Status:Previous Edition 6 25)If your noncompetitive bid for a Treasury bill is successful,then you will A)certainly pay less than if you had submitted a competitive bid.B)certainly

29、 pay more than if you had submitted a competitive bid.C)pay the average of prices offered in other noncompetitive bids.D)pay the same as other successful noncompetitive bidders.Answer:D Question Status:Previous Edition 26)Federal funds A)are short-term funds transferred between financial institution

30、s,usually for a period of one day.B)actually have nothing to do with the federal government.C)provide banks with an immediate infusion of reserves.D)are all of the above.E)are only A and B of the above.Answer:D Question Status:Previous Edition 27)Federal funds are A)usually overnight investments.B)b

31、orrowed by banks that have a deficit of reserves.C)lent by banks that have an excess of reserves.D)all of the above.E)only A and B of the above.Answer:D Question Status:Previous Edition 28)The Fed can influence the federal funds interest rate by adjusting the level of reserves available to banks.The

32、 Fed can A)lower the federal funds interest rate by adding reserves.B)raise the federal funds interest rate by removing reserves.C)remove reserves by selling securities.D)do all of the above.E)do only A and B of the above.Answer:D Question Status:Previous Edition 29)The Federal Reserve can influence

33、 the federal funds interest rate by buying securities,which _ reserves,thereby _ the federal funds rate.A)adds;raising B)removes;lowering C)adds;lowering D)removes;raising Answer:C Question Status:Previous Edition 7 30)The Fed can lower the federal funds interest rate by _ securities,thereby _ reser

34、ves.A)selling;adding B)selling;lowering C)buying;adding D)buying;lowering Answer:C Question Status:Previous Edition 31)If the Fed wants to lower the federal funds interest rate,it will _ the banking system by _ securities.A)add reserves to;selling B)add reserves to;buying C)remove reserves from;sell

35、ing D)remove reserves from;buying Answer:B Question Status:Previous Edition 32)If the Fed wants to raise the federal funds interest rate,it will _ securities to _ the banking system.A)sell;add reserves to B)sell;remove reserves from C)buy;add reserves to D)buy;remove reserves from Answer:B Question

36、Status:Previous Edition 33)Government securities dealers frequently engage in repos to A)manage liquidity.B)take advantage of anticipated changes in interest rates.C)lend or borrow for a day or two with what is essentially a collateralized loan.D)do all of the above.E)do only A and B of the above.An

37、swer:D Question Status:Previous Edition 34)Repos are A)usually low risk loans.B)usually collateralized with Treasury securities.C)low interest rate loans.D)all of the above.E)only A and B of the above.Answer:D Question Status:Previous Edition 8 35)A negotiable certificate of deposit A)is a term secu

38、rity because it has a specified maturity date.B)is a bearer instrument,meaning whoever holds the certificate at maturity receives the principal and interest.C)can be bought and sold until maturity.D)all of the above.E)only A and B of the above.Answer:D Question Status:Previous Edition 36)Negotiable

39、certificates of deposit A)are bearer instruments because their holders earn the interest and principal at maturity.B)typically have a maturity of one to four months.C)are usually denominated at$100,000.D)are all of the above.E)are only A and B of the above.Answer:E Question Status:Previous Edition 3

40、7)Commercial paper securities A)are issued only by the largest and most creditworthy corporations,as they are unsecured.B)carry an interest rate that varies according to the firms level of risk.C)never have a term to maturity that exceeds 270 days.D)all of the above.E)only A and B of the above.Answe

41、r:D Question Status:Previous Edition 38)Unlike most money market securities,commercial paper A)is not generally traded in a secondary market.B)usually has a term to maturity that is longer than a year.C)is not popular with most money market investors because of the high default risk.D)all of the abo

42、ve.E)only A and B of the above.Answer:A Question Status:Previous Edition 39)A bankers acceptance is A)used to finance goods that have not yet been transferred from the seller to the buyer.B)an order to pay a specified amount of money to the bearer on a given date.C)a relatively new money market secu

43、rity that arose in the 1960s as international trade expanded.D)all of the above.E)only A and B of the above.Answer:E Question Status:Previous Edition 9 40)Bankers acceptances A)can be bought and sold until they mature.B)are issued only by large money center banks.C)carry low interest rates because o

44、f the very low default risk.D)are all of the above.E)are only A and B of the above.Answer:D Question Status:Previous Edition 41)Eurodollars A)are time deposits with fixed maturities and are,therefore,somewhat illiquid.B)may offer the borrower a lower interest rate than can be received in the domesti

45、c market.C)are limited to London banks.D)are all of the above.E)are only A and B of the above.Answer:E Question Status:Previous Edition 42)Which of the following statements about money market securities are true?A)The interest rates on all money market instruments move very closely together over tim

46、e.B)The secondary market for Treasury bills is extensive and well developed.C)There is no well-developed secondary market for commercial paper.D)All of the above are true.E)Only A and B of the above are true.Answer:D Question Status:Previous Edition 43)Money market transactions A)do not take place i

47、n any one particular location or building.B)are usually arranged purchases and sales between participants over the phone by traders and completed electronically.C)both(a)and(b).D)none the the above.Answer:C Question Status:New 44)Two important characteristics of any financial market are flexibility

48、and A)risk.B)innovation.C)tolerance.D)capital.Answer:B Question Status:New 10 45)The main role of investment companies in the money market is to A)trade on behalf of commercial accounts.B)to mediate the symmetric information problem between server-lender and borrower-spenders.C)both(a)and(b).D)neith

49、er(a)nor(b).Answer:A Question Status:New 46)Which of the following is not an advantage a bankers acceptance?A)The exporter is paid immediately.B)The exporter is shielded from foreign exchange risk because the local bank pays in domestic funds.C)The exporter has to asses the creditworthiness of the i

50、mporter because the importers bank guarantees payment.D)All of the above are advantages.Answer:C Question Status:New 47)In a direct placement A)the issuer bypasses the dealer and sells indirectly to the end investor.B)the dealer sells directly to the end investor.C)the issuer bypasses the dealer and