1. The velocity of money is determined by the central bank.
True False
2. A multiple increase in GNP could result from an initial increase in the stock of money.
True False
3. It is primarily the central bank that determines the size and the structure of Ml, that is, how much of that total will be in demand deposits and how much in currency.
True False
4. Money may be tight if the money supply grows at a faster rate than the demand for money.
True False
5. Inflation is defined as an increase in the general level of prices for goods and services.
True False
6. A provision for loan loss results in less net income for a bank on a bank's income statement.
True False
7. One of the important factors leading to the growth of financial intermediaries has been the decreased cost of information and analysis of direct securities.
True False
8. Financial intermediaries are financial institutions that issue claims against themselves and use the proceeds to acquire financial claims against others.
True False
9. Unlike commercial banks, other depository financial intermediaries do not have to be much concerned with excess withdrawals of their deposits since they do not have to pay on demand by a depositor.
True False
10. An example of a non-depository financial intermediary is an insurance company.来 True False
11. Bond market prices and interest rates are directly related.
True False
12. In its open market operations, the Federal Reserve deals exclusively with commercial banks.
True False
13. Investors of bonds are quite clear about the exact amount of cash they will get back, provided they hold these securities until maturity.
True False
14. The stock price of a company is its value.
True False
15. Buying a mutual fund based solely on its past performance is a good strategy.
True False
16. Return of an investment takes two forms: income and capital gain.
True False
17. Corporate bonds that include a call provision can be exchanged into common stocks of the company that has issued them. This exchange is made at a predetermined price.
True False
18. The return stockholders will receive on their investment will depend on future dividend payments and expected stock price appreciation. Their investment is risky, because future cash dividends are variable and capital gains are uncertain.
True False
19. Common stockholders get a fixed dividend and they are entitled to it before preferred stockholders receive any dividend.
True False
20. Revenue bonds are usually of higher quality than general obligation bonds, because they are issued to finance specific projects and are fully backed by the income these projects will generate in the future.
True False
2. A multiple increase in GNP could result from an initial increase in the stock of money.
True False
3. It is primarily the central bank that determines the size and the structure of Ml, that is, how much of that total will be in demand deposits and how much in currency.
True False
4. Money may be tight if the money supply grows at a faster rate than the demand for money.
True False
5. Inflation is defined as an increase in the general level of prices for goods and services.
True False
6. A provision for loan loss results in less net income for a bank on a bank's income statement.
True False
7. One of the important factors leading to the growth of financial intermediaries has been the decreased cost of information and analysis of direct securities.
True False
8. Financial intermediaries are financial institutions that issue claims against themselves and use the proceeds to acquire financial claims against others.
True False
9. Unlike commercial banks, other depository financial intermediaries do not have to be much concerned with excess withdrawals of their deposits since they do not have to pay on demand by a depositor.
True False
10. An example of a non-depository financial intermediary is an insurance company.来 True False
11. Bond market prices and interest rates are directly related.
True False
12. In its open market operations, the Federal Reserve deals exclusively with commercial banks.
True False
13. Investors of bonds are quite clear about the exact amount of cash they will get back, provided they hold these securities until maturity.
True False
14. The stock price of a company is its value.
True False
15. Buying a mutual fund based solely on its past performance is a good strategy.
True False
16. Return of an investment takes two forms: income and capital gain.
True False
17. Corporate bonds that include a call provision can be exchanged into common stocks of the company that has issued them. This exchange is made at a predetermined price.
True False
18. The return stockholders will receive on their investment will depend on future dividend payments and expected stock price appreciation. Their investment is risky, because future cash dividends are variable and capital gains are uncertain.
True False
19. Common stockholders get a fixed dividend and they are entitled to it before preferred stockholders receive any dividend.
True False
20. Revenue bonds are usually of higher quality than general obligation bonds, because they are issued to finance specific projects and are fully backed by the income these projects will generate in the future.
