MGT411 - Money and Banking ONLINE QUIZ

Quiz Start Time: 07:13 PM Time Left 72
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Question # 1 of 20 ( Start time: 07:13:59 PM ) Total Marks: 1
Financial instruments are evolved just as ____________.
Select correct option:

Currency

Stock

Bond

Commodity


Quiz Start Time: 07:13 PM Time Left 69
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Question # 2 of 20 ( Start time: 07:14:21 PM ) Total Marks: 1
The____________ are an assessment of the creditworthiness of the corporate issuer.
Select correct option:


Bond yield

Bond ratings

Bond risk

Bond price


uiz Start Time: 07:13 PM Time Left 86
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Question # 3 of 20 ( Start time: 07:14:53 PM ) Total Marks: 1
The risk premium of a bond will:
Select correct option:


Higher for investment-grade bonds than for high-yield bonds

Positive but small if the risk of default is zero

Decrease when the default risk rises

Increase when the risk of default rises


Quiz Start Time: 07:13 PM Time Left 56
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Question # 5 of 20 ( Start time: 07:16:30 PM ) Total Marks: 1
One argument for an independent central bank is:
Select correct option:


Without independence competent people would not take a position in a central bank

Successful monetary policy requires a long time horizon usually well beyond the next election of most public officials

Politicians have a long-run focus that is not well tuned to addressing economic problems

Central bankers have a short run focus that usually corrects problems faster


Quiz Start Time: 07:13 PM Time Left 80
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Question # 6 of 20 ( Start time: 07:17:08 PM ) Total Marks: 1
We need __________ to carry out day to day transactions.
Select correct option:



Money

Bonds

Stocks

Loans





Quiz Start Time: 07:13 PM Time Left 75
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Question # 7 of 20 ( Start time: 07:17:29 PM ) Total Marks: 1
If information in a financial market is asymmetric, this means:
Select correct option:



Borrowers and lenders have perfect information

Borrowers would have more information than lenders

Borrowers and lenders have the same information

Lenders lack any information





Quiz Start Time: 07:13 PM Time Left 81
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Question # 8 of 20 ( Start time: 07:17:58 PM ) Total Marks: 1
If YTM equals the coupon rate the price of the bond is __________.
Select correct option:



Greater than its face value

Lower than its face value

Equals to its face value

Insufficient information





Quiz Start Time: 07:13 PM Time Left 68
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Question # 9 of 20 ( Start time: 07:18:26 PM ) Total Marks: 1
An increase in the expected inflation shifts the bond demand to the _________.
Select correct option:



Right

Left

No change

All of the given options





Quiz Start Time: 07:13 PM Time Left 84
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Question # 10 of 20 ( Start time: 07:18:51 PM ) Total Marks: 1
Requiring a large deductible on the part of an insured is one way insurers treat the problem of:
Select correct option:



Free-riding

Moral hazard

Adverse selection

The Lemons market





Quiz Start Time: 07:13 PM Time Left 81
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Question # 11 of 20 ( Start time: 07:19:29 PM ) Total Marks: 1
Mark borrows $8,000 and then repays $8,600 to ABC bank. What is the amount of interest in this payment?
Select correct option:



$600

$500

$400

$100





Quiz Start Time: 07:13 PM Time Left 84
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Question # 12 of 20 ( Start time: 07:19:52 PM ) Total Marks: 1
Which one of the following is the narrowest definition of money?
Select correct option:



C

M1

M2

M3





Quiz Start Time: 07:13 PM Time Left 73
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Question # 13 of 20 ( Start time: 07:20:07 PM ) Total Marks: 1
The default premium:
Select correct option:



Is positive for a U.S. Treasury bond

Must always be less than 0 (zero)

Is also known as the risk spread

Is assigned by a bond rating agency





Quiz Start Time: 07:13 PM Time Left 85
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Question # 15 of 20 ( Start time: 07:22:30 PM ) Total Marks: 1
The return on holding a bond till its maturity is called:
Select correct option:



Coupon rate

Yield to maturity

Current yield

Internal rate of return





Quiz Start Time: 07:13 PM Time Left 74
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Question # 16 of 20 ( Start time: 07:22:47 PM ) Total Marks: 1
The Fed lacks complete control over the money supply because it cannot perfectly predict:
Select correct option:



Discount borrowing by the banks

Shifts from deposits to currency

Excess reserves held by banks

Any of the above





Quiz Start Time: 07:13 PM Time Left 32
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Question # 17 of 20 ( Start time: 07:23:38 PM ) Total Marks: 1
___________ is the strategy of reducing overall risk by making two investments with opposing risks.
Select correct option:



Spreading the risk

Standard deviation

Hedging the risk

Variance





Quiz Start Time: 07:13 PM Time Left 63
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Question # 18 of 20 ( Start time: 07:24:39 PM ) Total Marks: 1
An index number is a valuable tool because:
Select correct option:



The number by itself provides all of the useful information needed

The index provides a meaningful measurement scale to calculate percentage changes

The index is more stable than the data it reflects

It does not require any calculations to compute percentage changes