3634045
Descrição
Quiz por Angie Koslowski, atualizado more than 1 year ago
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Criado por Angie Koslowski
quase 9 anos atrás
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Questão 1
Questão
The nominal rate of interest does not take into account a risk premium
Responda
- True
- False
Questão 2
Questão
The market segmentation theory states that borrowers want long term loans, while lenders want to make short-term loans
Responda
- True
- False
Questão 3
Questão
The cost of borrowing funds is most commonly called the interest rate
Responda
- True
- False
Questão 4
Questão
A normal yield curve slopes upward to reflect the higher long-term borrowing costs
Responda
- True
- False
Questão 5
Questão
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!!)
Responda
- True
- False
Questão 6
Questão
As the market interest rate increases, the price of a bond decreases
Responda
- True
- False
Questão 7
Questão
The pure expectations theory explains why the yield curve would normally be upward sloping
Responda
- True
- False
Questão 8
Questão
The cost of borrowing funds is most commonly called the interest rate
Responda
- True
- False
Questão 9
Questão
If corporate profits increase in the aggregate, interest rates will rise
Responda
- True
- False
Questão 10
Questão
The real rate of return is the compensation you require delaying consumption
Responda
- True
- False
Questão 11
Questão
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
Responda
- True
- False
Questão 12
Questão
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.
Responda
- True
- False
Questão 13
Questão
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.
Responda
- True
- False
Questão 14
Questão
During or near peaks of business activity, yield curves that are flat or downward sloping (possible with humps) are often prevalent.
Responda
- True
- False
Questão 15
Questão
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.
Responda
- True
- False
Questão 16
Questão
The __________ rate of interest is typically the required rate of return on a 3 month US Treasury Bill
Responda
-
real
-
risk-free
-
premium
-
nominal
Questão 17
Questão
A(n) ________ yield curve would indicate that investors believe interest rates may increase in the future.
Responda
-
negative
-
downward sloping
-
flat
-
upward sloping
Questão 18
Questão
The ________ rate of interest has been adjusted for inflation and risk
Responda
-
long-term
-
nominal
-
real
-
required
Questão 19
Questão
The possibility that the issuer of debt will not pay the principle is scheduled as
Responda
-
default risk
-
maturity risk
-
liquidity risk
-
contractual risk
Questão 20
Questão
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%.
Responda
-
7.7%
-
9.7%
-
8.2%
-
3.5%
Questão 21
Questão
Historically, what has had the greatest effect on interest rates?
Responda
-
business risk
-
corporate bonds
-
Treasury notes
-
inflation
Questão 22
Questão
A(n) ______ explains to the borrower different conditions of the loan
Responda
-
business plan
-
indenture
-
portfolio
-
return policy
Questão 23
Questão
Historically, what is the recurrence of a business cycle?
Responda
-
1-3 years
-
5-10 years
-
10-20 years
-
every 30 years
Questão 24
Questão
The degree of ________ risk decreases as the amount of debt held by a firm decreases
Responda
-
financial
-
firm
-
business
-
industry
Questão 25
Questão
The ______ is a graphical representation of the term structure of interest rates
Responda
-
security market line
-
yield curve
-
demand curve
-
inflation curve
Questão 26
Questão
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?
Responda
-
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
Questão 27
Questão
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?
Responda
-
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
Questão 28
Questão
According to the Fisher equation, nominal interest rate equals to the real rate plus
Responda
-
liquidity premium
-
maturity risk premium
-
expected rate of interest
-
broker profit rate
Questão 29
Questão
Inflation, recession, and high interest rates are economic events which are characterized as
Responda
-
diversified company specific risk
-
market risk
-
diversified system risk
-
diversifiable risk
Questão 30
Questão
the degree of _____ is how cash flows from operations fluctuate over time
Responda
-
financial risk
-
default risk
-
interest rate risk
-
business risk
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