Ch2 Assignment

A  none of these

B  financial intermediation.

C  financial bundling.

D  financial disintermediation.

A  firms that issue securities in this market are in dire need of cash.

B  none of these.

C  it is a market where stocks are converted into money.

D  the instruments traded in this market are close substitutes for cash.

A  none of these

B  the stock market.

C  the bond market.

D  the money market.

A  A futures exchange.

B  An over-the-counter market.

C  None of these

D  An auction market.

A  A level of inflation that is higher than that anticipated at the outset of the loan.

B  A level of inflation that is lower than that anticipated at the outset of the loan.

C  A level of inflation that is exactly as anticipated at the outset of the loan.

D  No inflation at all.

A  5%.

B  6%.

C  11%.

D  12%.

A  all of these.

B  compensation for the level of international borrowing.

C  compensation for deferring consumption.

D  compensation for inflation.

A  25 percent.

B  10 percent.

C  5 percent.

D  15 percent.

A  Nominal-form efficiency.

B  Strong-form efficiency.

C  Weak-form efficiency.

D  Semistrong-form efficiency.

A  Market prices adjust quickly to new information as it becomes available.

B  All information contained in past prices of a security is reflected in its current price but that there is both public and private information that is not.

C  Market prices of securities of companies in the same industry are all same.

D  Securities have no systematic risk.

A  Semistrong-form efficiency.

B  Strong-form efficiency.

C  Nominal-form efficiency.

D  Weak-form efficiency.

A  Johnny Appleseed buying 1,000 shares of Dell through NYSE

B  MicroChip Computers selling $1,000,000 worth of bonds directly to AIG Corp.

C  IBM issuing 100,000 shares on the NYSE for the first time

D  Mary receiving dividends from IBM

A  have shorter maturities.

B  have lower default risk.

C  are not affected by inflation.

D  are less marketable.

A  companies to buy back their own previously issued shares.

B  companies to sell new securities directly to investors.

C  companies to trade the financial derivatives such as futures and options.

D  investors to sell stocks to other investors.

A  decline; rise

B  rise; stay the same

C  rise; decline

D  decline; stay the same

A  the supply and demand for money are equal.

B  the inflation rate decreases.

C  the supply of money increases.

D  the demand for money increases.

A  2.8%.

B  2.7%.

C  5.3%.

D  7.8%.

A  interest rates to remain unchanged.

B  interest rates to decrease.

C  the cost of money to remain unchanged.

D  interest rates to increase.

A  a commodity cross-index return.

B  compensation for inflation.

C  both the real rate of interest and compensation for inflation.

D  the real rate of interest.

A  A financial intermediation

B  An origination

C  An underwriting

D  An initial public offering