3634045
Descripción
Test por Angie Koslowski, actualizado hace más de 1 año
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Creado por Angie Koslowski
hace más de 8 años
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Pregunta 1
Pregunta
The nominal rate of interest does not take into account a risk premium
Respuesta
- True
- False
Pregunta 2
Pregunta
The market segmentation theory states that borrowers want long term loans, while lenders want to make short-term loans
Respuesta
- True
- False
Pregunta 3
Pregunta
The cost of borrowing funds is most commonly called the interest rate
Respuesta
- True
- False
Pregunta 4
Pregunta
A normal yield curve slopes upward to reflect the higher long-term borrowing costs
Respuesta
- True
- False
Pregunta 5
Pregunta
A farmer recently sold 2 of his chicken farms and farm equipment to reduce his financial risk (sorry guys but this is a very bizarre question!!)
Respuesta
- True
- False
Pregunta 6
Pregunta
As the market interest rate increases, the price of a bond decreases
Respuesta
- True
- False
Pregunta 7
Pregunta
The pure expectations theory explains why the yield curve would normally be upward sloping
Respuesta
- True
- False
Pregunta 8
Pregunta
The cost of borrowing funds is most commonly called the interest rate
Respuesta
- True
- False
Pregunta 9
Pregunta
If corporate profits increase in the aggregate, interest rates will rise
Respuesta
- True
- False
Pregunta 10
Pregunta
The real rate of return is the compensation you require delaying consumption
Respuesta
- True
- False
Pregunta 11
Pregunta
If the Federal Reserve tightens the money supply, other things held constant, short-term interest rates will be pushed upward, and this increase will probably be greater than the increase in rates in the long-term market
Respuesta
- True
- False
Pregunta 12
Pregunta
Long-term interest rates reflect expectations about future inflation. Inflation has varied significantly from year to year during the last 10 years, and, as a result, long-term rates have fluctuated more than short-term rates.
Respuesta
- True
- False
Pregunta 13
Pregunta
If you have information that a recession is ending, and the economy is about to enter a boom, and your firm needs to borrow money, it should probably issue long-term rather than short-term debt.
Respuesta
- True
- False
Pregunta 14
Pregunta
During or near peaks of business activity, yield curves that are flat or downward sloping (possible with humps) are often prevalent.
Respuesta
- True
- False
Pregunta 15
Pregunta
If the liquidity preference theory of the term structure is correct, we would expect the size of the maturity risk premium to increase with maturity. Thus, we might observe an upward sloping yield curve, even if future short-term rates are expected to decrease.
Respuesta
- True
- False
Pregunta 16
Pregunta
The __________ rate of interest is typically the required rate of return on a 3 month US Treasury Bill
Respuesta
-
real
-
risk-free
-
premium
-
nominal
Pregunta 17
Pregunta
A(n) ________ yield curve would indicate that investors believe interest rates may increase in the future.
Respuesta
-
negative
-
downward sloping
-
flat
-
upward sloping
Pregunta 18
Pregunta
The ________ rate of interest has been adjusted for inflation and risk
Respuesta
-
long-term
-
nominal
-
real
-
required
Pregunta 19
Pregunta
The possibility that the issuer of debt will not pay the principle is scheduled as
Respuesta
-
default risk
-
maturity risk
-
liquidity risk
-
contractual risk
Pregunta 20
Pregunta
The nominal rate is ________, if r=2%, inflation is 1.5%, the LP is 1.2%, the DRP is 3% and the MRP is 2%.
Respuesta
-
7.7%
-
9.7%
-
8.2%
-
3.5%
Pregunta 21
Pregunta
Historically, what has had the greatest effect on interest rates?
Respuesta
-
business risk
-
corporate bonds
-
Treasury notes
-
inflation
Pregunta 22
Pregunta
A(n) ______ explains to the borrower different conditions of the loan
Respuesta
-
business plan
-
indenture
-
portfolio
-
return policy
Pregunta 23
Pregunta
Historically, what is the recurrence of a business cycle?
Respuesta
-
1-3 years
-
5-10 years
-
10-20 years
-
every 30 years
Pregunta 24
Pregunta
The degree of ________ risk decreases as the amount of debt held by a firm decreases
Respuesta
-
financial
-
firm
-
business
-
industry
Pregunta 25
Pregunta
The ______ is a graphical representation of the term structure of interest rates
Respuesta
-
security market line
-
yield curve
-
demand curve
-
inflation curve
Pregunta 26
Pregunta
If the yield curve is downward sloping, what is the yield to maturity on a 10-year Treasury coupon bond, relative to that on a 1-year T-bond?
Respuesta
-
the yield on the 10 year bond is less than that of the 1 year bond
-
the yield on the 1 year bond is less than that of the 10 year bond
-
the yields on the two bonds are equal
-
Impossible to tell without knowing the coupon rates of the bonds
Pregunta 27
Pregunta
If the expectations theory of the term structure of interest rates is correct, and if the other term structure theories are invalid, and we observe a downward sloping yield curve, which of the following is a true statement?
Respuesta
-
investors expect short-term rates to be constant over time
-
investors expect short-term rates to increase in the future
-
investors expect short term rates to decrease in the future
-
the maturity risk premium must be positive
Pregunta 28
Pregunta
According to the Fisher equation, nominal interest rate equals to the real rate plus
Respuesta
-
liquidity premium
-
maturity risk premium
-
expected rate of interest
-
broker profit rate
Pregunta 29
Pregunta
Inflation, recession, and high interest rates are economic events which are characterized as
Respuesta
-
diversified company specific risk
-
market risk
-
diversified system risk
-
diversifiable risk
Pregunta 30
Pregunta
the degree of _____ is how cash flows from operations fluctuate over time
Respuesta
-
financial risk
-
default risk
-
interest rate risk
-
business risk
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