金融市场有金融机构 试题 双语课程.doc

ASSIGNMENT 2 MULTIPLE CHOICE 1) The price paid for the rental of borrowed funds (usually expressed as a percentage of the rental of $100 per year) is commonly referred to as the A) inflation rate. B) exchange rate. C) interest rate. D) aggregate price level. Answer: C 2) Financial markets and institutions A) involve the movement of huge quantities of money. B) affect the profits of businesses. C) affect the types of goods and services produced in an economy. D) do all of the above. E) do only (A) and (B) of the above. Answer: D 3) Which of the following can be described as involving direct finance? A) A corporation?s stock is traded in an over-the-counter market. B) People buy shares in a mutual fund. C) A pension fund manager buys commercial paper in the secondary market. D) An insurance company buys shares of common stock in the over-the-counter markets. E) None of the above. Answer: E 4) The purpose of diversification is to A) reduce the volatility of a portfolio?s return. B) raise the volatility of a portfolio?s return. C) reduce the average return on a portfolio. D) raise the average return on a portfolio. Answer: A 5) When the interest rate on a bond is _________ the equilibrium interest rate, there is excess_________ in the bond market and the interest rate will _________. A) below; demand; rise B) below; demand; fall C) below; supply; rise D) above; supply; fall Answer: C 6) In a recession when income and wealth are falling, the demand for bonds _________ and the demand curve shifts to the _________. A) falls; right B) falls; left C) rises; right D) rises; left Answer: B 7) When people begin to expect a large stock market decline, the demand curve for bonds shifts to the _________ and the interest rate _________. A) right; falls B) right; rises C) left; falls D) left; rises Answer: A 8) The spread between interest rates on low quality corporate bonds and U.S. government bonds _________ during the Great Depression. A) was reversed B) narrowed significantly C)