Devry FIN 364 Week 1 Homework Latest

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Devry FIN 364 Week 1 Homework Latest

1. 1.Question : (TCO 1) An SSU’s

income and expenditures for the period are equal.

income for the period exceeds expenditures.

expenditures for the period exceed receipts.

spending is entirely financed by credit cards.

Question 2. Question : (TCO 1) An efficient financial system

eliminates search and transactions costs.

is a mere theoretical possibility.

promotes economic growth and social progress.

depends on high volumes of “direct” transactions.

Question 3. Question : (TCO 1) Which of the following are economic units?

Households

Businesses

Governments

All of the above

Points Received: 3 of 3

Comments:

Question 4. Question : (TCO 1) Profitability of financial intermediaries derives from all of the following except

government regulation of interest rates.

economies of scale.

ability to manage credit risk.

control of transactions costs.

Question 5. Question : (TCO 1) Money market mutual funds are a strong competitor for

depository institutions.

contractual savings institutions.

finance companies.

the real estate market.

Question 6. Question : (TCO 1) In direct financing, the lender

trades a financial claim for money.

trades money for a financial claim issued by a financial institution.

trades money with a broker who owns the financial claims of a borrower.

trades money for the financial claim of the borrower.

Question 7. Question : (TCO 1) ______ merely execute buy or sell orders for their clients; _______ make markets.

Dealers; brokers

Brokers; investment bankers

Dealers; financial institutions

Brokers; dealers

Question 8. Question : (TCO 1) The only deposit-type institutions that do not operate for profit are

thrift institutions.

credit unions.

pension funds.

commercial banks.

Question 9. Question : (TCO 1) Money market instruments and capital market instruments differ appreciably in

maturity.

liquidity.

availability to ordinary individual investors.

All of the above

Question 10. Question : (TCO 1) The best synonym for financial intermediation is

direct finance.

investment banking.

market making.

transformation of claims.

Question 11. Question : (TCO 1) Corporations list their securities on exchanges in order to

pay an annual listing fee and disclose important information.

enhance the liquidity of their securities for investors.

sell more securities.

increase the size of the firm.

Question 12. Question : (TCO 1) The money market is important because

it is the world’s liquidity market.

it is the market in which the Fed conducts monetary policy.

the federal government finances most of its credit needs in the money market.

All of the above

Question 13. Question : (TCO 1) Federal Funds are typically

treasury deposits.

Federal Reserve assets.

commercial bank deposits at the Federal Reserve.

Federal Reserve deposits.

Question 14. Question : (TCO 1) An S & L taking short-term deposits and financing local land development is engaging in

speculation.

maturity intermediation.

denomination intermediation.

currency transformation.

Question 15. Question : (TCO 1) Potential fluctuations in exchange rates and the currency value of one country relative to another represent

credit risk.

liquidity risk.

foreign exchange risk.

interest rate risk.

 

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Devry FIN 364 Week 1 Homework Latest