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1、精选优质文档-倾情为你奉上Tutorial 2Due on 28th, Nov, 2016 Part I: Choose the best answer 1) Financial markets promote economic efficiency by A) channeling funds from investors to savers. B) creating inflation. C) channeling funds from savers to investors. D) reducing investment. 2) A common stock is a claim on
2、a corporationsA) debt B) liabilities C) expensesD) earnings and assets3) Countries that experience very high rates of inflation have A) balanced budgets. B) rapidly growing money supplies.C) falling money supplies. D) constant money supplies. 4) An important financial institution that assists in the
3、 initial sale of securities in the primary market is the A) investment bank. B) commercial bank. C) stock exchange. D) brokerage house. 5) Which of the following can be described as involving indirect finance? A) You make a loan to your neighbor. B) You buy shares in a mutual fund. C) You buy a U.S.
4、 Treasury bill from the U.S. Treasury. D) A corporation buys a short-term security issued by another corporation in the primary market. 6) Which of the following can be described as direct finance? A) You take out a mortgage from your local bank. B) You borrow $2500 from a friend. C) You buy shares
5、of common stock in the secondary market. D) You buy shares in a mutual fund. 7) You can borrow $5000 to finance a new business venture. This new venture will generate annual earnings of $251. The maximum interest rate that you would pay on the borrowed funds and still increase your income is A) 25%.
6、 B) 12.5%.C) 10%D) 5% 8) With _ finance, borrowers obtain funds from lenders by selling them securities in the financial markets. A) active B) determined C) indirect D) direct9) Which of the following statements about the characteristics of debt and equity is false?A) They can both be long-term fina
7、ncial instruments. B) They can both be short-term financial instruments.C) They both involve a claim on the issuers incomeD)They both enable a corporation to raise funds 10)Secondary markets make financial instruments more A) solid. B) vapid. C) liquid. D) risky11) The higher a securitys price in th
8、e secondary market the _ funds a firm can raise by selling securities in the _ market. A) more; primary B) more; secondary C) less; primary D) less; secondary 12) An important financial institution that assists in the initial sale of securities in the primary market is the A) investment bank. B) com
9、mercial bank. C) stock exchange. D) brokerage house 13) Equity holders are a corporations _. That means the corporation must pay all of its debt holders before it pays its equity holders. A) debtors B) brokers C) residual claimants D) underwriters 14) Which of the following statements uses the econo
10、mists definition of money? A) I plan to earn a lot of money over the summer. B) Betsy is rich，she has a lot of money. C) I hope that I have enough money to buy my lunch today. D) The job with New Company gave me the opportunity to earn more money.15)When compared to exchange systems that rely on mon
11、ey, disadvantages of the barter system include: A) the requirement of a double coincidence of wants. B) lowering the cost of exchanging goods over time. C) lowering the cost of exchange to those who would specialize. D) encouraging specialization and the division of labor16) When money prices are us
12、ed to facilitate comparisons of value, money is said to function as a A) unit of account. B) medium of exchange. C) store of value. D) payments-system ruler17) Patrick places his pocket change into his savings bank on his desk each evening. By his actions, Patrick indicates that he believes that mon
13、ey has a _ function. A) medium of exchange B) unit of account C) store of value D) specialization18) People hold money even during inflationary episodes when other assets prove to be better stores of value. This can be explained by the fact that money isA) extremely liquid. B) a unique good for whic
14、h there are no substitutes. C) the only thing accepted in economic exchange. D) backed by gold19) In explaining the evolution of money A) government regulation is the most important factor. B) commodity money, because it is valued more highly, tends to drive out paper money. C) new forms of money ev
15、olve to lower transaction costs. D) paper money is always backed by gold and therefore more desirable than checks. 20) During the past two decades an important characteristic of the modern payments system has been the rapidly increasing use of _A) checks and decreasing use of currency.B) electronic
16、fund transfers. C) commodity monies. D) fiat money 21)Which of the following is not virtual money ? A) Q coin (QQ) B) bitcoin C) Litecoin D)e-cash 22) If an individual moves money from a demand deposit account to a money market deposit accountA) M1 decreases and M2 stays the same. B) M1 stays the sa
17、me and M2 increases. C) M1 stays the same and M2 stays the same. D) M1 increase and M2 decrease专心-专注-专业23)If a security pays $110 next year and $121 the year after that, what is its yield to maturity if it sells for $200? A) percent : B) 10 perc ent C)11 percent D)12 percent 24) Which of the followi
18、ng bonds would you prefer to be buying? A) A $10,000 face-value security with a 10 percent coupon selling for $9,000 B) A $10,000 face-value security with a 7 percent coupon selling for $10,000 C)A $10,000 face-value security with a 9 percent coupon selling for $11,000 D)A $10,000 face-value securit
19、y with a 10 percent coupon selling for $10,00025) A discount bond selling for $15,000 with a face value of $20,000 in one year has a yield to maturity of A)3 percent. B)20 percent. C)25 percent. D)33.3 percent.26) Suppose you are holding a 5 percent coupon bond maturing in one year with a yield to m
20、aturity of 15 percent. If the interest rate on one-year bonds rises from 15 percent to 20 percent over the course of the year, what is the yearly return on the bond you are holding? A)5 percent B)10 percent C)15 percent D)20 percent 27) Prices and returns for _ bonds are more volatile than those for
21、 _ bonds, everything else held constant. A)long-term; long-term B)long-term; short-term C)short-term; long-term D)short-term; short-term 28)Everything else held constant, if the expected return on U.S. Treasury bonds falls from 8 to 7 percent and the expected return on corporate bonds falls from 10
22、to 8 percent, then the expected return of corporate bonds _ relative to U.S. Treasury bonds and the demand for corporate bonds _. A)rises; risesB) rises; falls C)falls; risesD)falls; fall29)If the price of gold becomes less volatile, then, other things equal, the demand for stocks will _ and the dem
23、and for antiques will _. A) increase; increase B) increase; decrease C)decrease; decrease D)decrease; increase 30)Everything else held constant, if interest rates are expected to fall in the future, the demand for long-term bonds today _ and the demand curve shifts to the _. A) rises; right B) rises
24、; left C)falls; right D)falls; left31)When the inflation rate is expected to increase, the _ for bonds falls, while the _ curve shifts to the right, everything else held constant. A) demand; demand B) demand; supply C)supply; demand D)supply; supply 32)When the government has a surplus, as occurred
25、in the late 1990s, the _ curve of bonds shifts to the _, everything else held constant. A) supply; right B) supply; left C)demand; right D)demand; left 33)In the figure above, the price of bonds would fall from P1 to P2 A) inflation is expected to increase in the future. B) interest rates are expect
26、ed to fall in the future. C)the expected return on bonds relative to other assets is expected to increase in the future. D)the riskiness of bonds falls relative to other assets. 34)During the Great Depression years 1930-1933 there was a very high rate of business failures and defaults, we would expe
27、ct the risk premium for _ bonds to be very high. A) U.S. Treasury B) corporate Aaa C)municipal D)corporate Baa35)If the expected path of 1-year interest rates over the next five years is 2 percent, 4 percent, 1 percent, 4 percent, and 3 percent, the expectations theory predicts that the bond with th
28、e lowest interest rate today is the one with a maturity of A) one year. B) two years.C)three years. D)four years. 36)If 1-year interest rates for the next three years are expected to be 4, 2, and 3 percent, and the 3-year term premium is 1 percent, then the 3-year bond rate will be A) 1 percent. B)
29、2 percent. C)3 percent. D)4 percent. 37) According to expectation theory ,The U-shaped yield curve in the figure indicates that short-term interest rates are expected to A) rise in the near-term and fall later on. B) fall sharply in the near-term and rise later on. C)fall moderately in the near-term
30、 and rise later on. D)remain unchanged in the near-term and rise later on38)According to liquidity premium theory ,The inverted U-shaped yield curve in the figure indicates that the inflation rate is expected to A) rise sharply in the near-term and fall later on. B) fall moderately in the near-term
31、and rise later on. C)rise moderately in the near-term and fall later on. D)remain unchanged in the future .39) If a security pays $55 in one year and $133 in three years, its present value is $150 if the interest rate is A) 5 percent. B) 10 percent. C) 12.5 percent. D) 15 percent. 40)If a consol has
32、 a price of $500 and an annual interest payment of $25, the interest rate is A) 2.5 percent. B) 5 percent. C) 7.5 percent. D) 10 percent. 41)The yield on a discount basis of a 180-day $1,000 Treasury bill selling for $900 is A) 10 percent. B) 20 percent. C) 25 percent. D) 40 percent.42)What is the r
33、eturn on a 5 percent coupon bond that initially sells for $1,000 and sells for $900 next year? A) 5 percent B) 10 percent C) -5 percent D) -10 percent 43) If the interest rates on all bonds rise from 5 to 6 percent over the course of the year, which bond would you prefer to have been holding? A) A b
34、ond with one year to maturity B) A bond with five years to maturity C) A bond with ten years to maturity D) A bond with twenty years to maturity 44) Which of the following are true concerning the distinction between interest rates and returns? A) The rate of return on a bond will not necessarily equ
35、al the interest rate on that bond. B) The return can be expressed as the difference between the current yield and the rate of capital gains. C) The rate of return will be greater than the interest rate when the price of the bond falls between time t and time t + 1. D)The return can be expressed as t
36、he sum of the discount yield and the rate of capital gains. 45)The riskiness of an assets return due to changes in interest rate is A)exchange rate risk B)price risk C)asset risk D) interest rate risk Part II: Calculation and Analysis 1.Calculate the rate of return1) For a coupon bond with coupon ra
37、te of 10% maturing in 2 years and selling at its face value. If the yield to maturity is 10% at the beginning of the year, and drop to 5% at the end of the year. What is the annual rate of return of this coupon bond ?2) Which investment has a higher rate of return ?According to you , which one (cons
38、ol or coupon bond) is a better investment ? Can you relate your results to the theory on interest rate risk? 2.Supply and Demand Analysis of Money Market Money supply iMsMdThe chart above shows the money demand and supply. Suppose now the Federal Reserve decides to reduce the Money supply, causing i
39、ncome level to decrease over time. Please drew the new money demand and supply curve accordingly and talk about your opinion on the new equilibrium of interest rate. (whether it goes up or down) 3. Explain why you would be more or less willing to buy gold under the following circumstancea.Gold again
40、 becomes acceptable medium of exchangeb.Price in gold market become more volatile c.You expect inflation to rise, and gold price tend to move with the aggregate price level 4. The president of the US announces in a press conference that he will fight the higher inflation rate with a new anti-inflati
41、on program . Predict what will happy to interest rate if the public believes him5. If expectations of future short-term interest rate suddenly fall, what would happy to the slope of the yield curve? Part III Essay QuestionsThe following questions are based on the attached article on Money.(1) Write
42、a summary of the article ( less than 500 words) (2) What is the advantages and disadvantages of Fiat Money ?(3) Given the definition and functions of Money , discuss whether Bitcoin (比特币) can function as real money? ANSWERPart I15 CDBAB610BDDBC1115AACCA1620ACACB2125DABAC2630CCDCA3135ABADD3640DCCBB41
43、45AAAADPart II1 (1) (100/0.05-100/0.1+100)/(100/0.1)=110%(2) (1.1F/1.05-F+0.1F)/F=14.76% I prefer coupon bond. When coupon rate of two fall, coupon bond may rise more.2iMs1Md2Md2Ms2goes down3 a I will be willing to buy gold because of the high liquidity. b I will not be willing to buy gold because o
44、f the high risk. c I will be willing to buy gold ,because gold replaces the money store of value. 4 The interest rates will fall. Peoples inflation expectations will reduce, and the nominal yield of the bond is fixed. Soit makes the real gains in the bond.5. The slope of the yield curve become small
45、er. The expected reduction in future short-term interest rates will reduce the average value of average short-term interest rates. Long-term interest rates reduce.III.(1)Money plays an essential role in our daily life nowadays. With money, we dont need to find a particular person which is difficult
46、to trade with. At this moment, all we need is just a market that is big enough in which to sell our goods or services. There was no doubt that money as a kind of medium provides a great convenience for us.Money is something that holds its value over time, can be easily translated into prices, and is
47、 widely accepted. Many different things have been used as money over the years. However, many things looked as money may change in different ways as time goes by so that they cannot be kept for a long time. But precious metals that are hard to obtain seemed to serve all three needs: a stable unit of account, a durable store of