The life stages of an individual saver include which of the following:

Question 1
_________________________ was an international monetary system in which the U.S. dollar was valued in gold and other exchange rates were pegged to the dollar.

The gold standard

The flexible exchange rate system

The Bretton Woods System

The Taft-Hartley Act
Question 2
An importer will generally try to avoid making payment for a purchase before the goods are actually shipped by

purchasing a letter of credit.

having payment sent to a bank in the exporter's country to be held until proper shipment is made.

post-dating a check.

insisting on payment only upon delivery.
Question 3
An unconditional order for the payment of money from one person to another is called a(n)

bill of exchange.

sight draft.

time draft.

documentary draft.

Question 4
A statement by a bank guaranteeing acceptance and payment of a draft up to a stated amount is called a(n)

bill of exchange.

commercial letter of credit.

time draft.

documentary draft.
Question 5
An instrument through which a bank retains title to goods until they are paid for is called a(n)

bill of exchange.

commercial letter of credit.

trust receipt.

documentary draft.
Question 6
The personal savings rate is calculated as:

personal savings divided by personal outlays

personal savings divided by disposable personal income

disposable personal income divided by personal outlays

personal income divided by personal outlays
Question 7
Capital market securities include all of the following EXCEPT:

Corporate bond

Treasury bond

Certificate of deposit

Common Stock
Question 8
The life stages of an individual saver include which of the following:

the formative/education developing stage

the career reduction stage

the wealth depletion stage

the cost of living stage
Question 9
If personal consumption expenditures are $1 billion, government purchases are $2 billion, gross private domestic investments are $4 billion and net exports are $5 billion, then GDP is:

$12 billion

$8 billion

$7 billion

$2 billion
Question 10
If individuals believe their income will decrease in the near future, they may _____________ their spending.

Eliminate

Curtail

Increase

Double
Question 11
The basic price that equates the demand for and supply of loanable funds in the financial markets is the __________:

interest rate

yield curve

term structure

cash price
Question 12
Compensation for those financial debt instruments that cannot be easily converted to cash at prices close to estimated fair market values is termed:

liquidity premium

market risk premium

maturity premium

environmental premium
Question 13
If the nominal interest rate is 8% and the risk-free rate is 3%, the expected inflation rate must be:

3%

5%

11%

13%
Question 14
Which of the following factors does not affect the supply of loanable funds?

the volume of savings

expansion of deposits by banks

attitudes about liquidity

quantity of unissued Treasury bonds
Question 15
Which of the following factors does not directly impact the level of interest rates?

risk

marketability

maturity

cost of producing and distributing new currency
Question 16
Private placements:

are not sold to the general public

have expedited SEC scrutiny

require public disclosure of the firm's financial information

are only issued by governments
Question 17
Mary wants to purchase a 20-year bond that has a par value of $1,000 and makes semiannual interest payments of $40. If her required yield to maturity is 10%, which of the following is closest to how much should Mary be willing to pay for the bond?

$902

$925

$1000

$828
Question 18
The largest annual supply of external funds for business corporations comes from issuance of which one of the following sources?

privately placed stocks

bonds

preferred stocks

common stocks
Question 19
An example of asset securitization is:

a bond backed by credit card receivables

a debenture

a subordinated debenture

convertible bond
Question 20
A current yield on a corporate bond is calculated as:

coupon interest amount divided by par value

coupon interest rate times the par value

coupon interest amount divided by the current price

coupon interest rate times the current price