金融市场与机构 9.docx

1、金融市场与机构 91Chapter 9The Money Markets1nMultiple Choice Questions1. Activity in money markets increased significantly in the late 1970s and early 1980s because of(a) rising short-term interest rates.(b) regulations that limited what banks could pay for deposits.(c) both (a) and (b).(d) neither (a) nor

2、 (b).Answer: C2. Money market securities have all the following characteristics except they are not(a) short term.(b) money.(c) low risk.(d) very liquid.Answer: B3. Money market instruments(a) are usually sold in large denominations.(b) have low default risk.(c) mature in one year or less.(d) are ch

3、aracterized by all of the above.(e) are characterized by only (a) and (b) of the above.Answer: D4. The banking industry(a) should have an efficiency advantage in gathering information that would eliminate the need for the money markets.(b) exists primarily to mediate the asymmetric information probl

4、em between saver-lenders and borrower-spenders.(c) is subject to more regulations and governmental costs than are the money markets.(d) all of the above are true.(e) only (a) and (b) of the above are true.Answer: D5. In situations where asymmetric information problems are not severe,(a) the money ma

5、rkets have a distinct cost advantage over banks in providing short-term funds.(b) the money markets have a distinct cost advantage over banks in providing long-term funds.(c) banks have a distinct cost advantage over the money markets in providing short-term funds.(d) the money markets cannot alloca

6、te short-term funds as efficiently as banks can.Answer: A6. Brokerage firms that offered money market security accounts in the 1970s had a cost advantage over banks in attracting funds because the brokerage firms(a) were not subject to deposit reserve requirements.(b) were not subject to the deposit

7、 interest rate ceilings.(c) were not limited in how much they could borrow from depositors.(d) had the advantage of all the above.(e) had the advantage of only (a) and (b) of the above.Answer: E7. Which of the following statements about the money market are true?(a) Not all commercial banks deal for

8、 their customers in the secondary market.(b) Money markets are used extensively by businesses both to warehouse surplus funds and to raise short-term funds.(c) The single most influential participant in the U.S. money market is the U.S. Treasury Department.(d) All of the above are true.(e) Only (a)

9、and (b) of the above are true.Answer: E8. Which of the following statements about the money markets are true?(a) Most money market securities do not pay interest. Instead the investor pays less for the security than it will be worth when it matures.(b) Pension funds invest a portion of their assets

10、in the money market to have sufficient liquidity to meet their obligations.(c) Unlike most participants in the money market, the U.S. Treasury Department is always a demander of money market funds and never a supplier.(d) All of the above are true.(e) Only (a) and (b) of the above are true.Answer: D

11、9. Which of the following are true statements about participants in the money markets?(a) Large banks participate in the money markets by selling large negotiable CDs.(b) The U.S. government and corporations borrow in the money markets because cash inflows and outflows are rarely synchronized.(c) Th

12、e Federal Reserve is the single most influential participant in the U.S. money market.(d) All of the above are true.(e) Only (a) and (b) of the above are true.Answer: D10. The most influential participant(s) in the U.S. money market(a) is the Federal Reserve.(b) is the U.S. Treasury Department.(c) a

13、re the large money center banks.(d) are the investment banks that underwrite securities.Answer: A11. The Fed is an active participant in money markets mainly because of its responsibility to(a) lower borrowing costs to encourage capital investment.(b) control the money supply.(c) increase the intere

14、st income of retirees holding money market instruments.(d) assist the Securities and Exchange Commission in regulating the behavior other money market participants.Answer: B12. Commercial banks are large holders of _ and are the major issuer of _.(a) negotiable certificates of deposit; U.S. governme

15、nt securities(b) U.S. government securities; negotiable certificates of deposit(c) commercial paper; Eurodollars(d) Eurodollars; commercial paperAnswer: B13. The primary function of large diversified brokerage firms in the money market is to(a) sell money market securities to the Federal Reserve for

16、 its open market operations.(b) make a market for money market securities by maintaining an inventory from which to buyor sell.(c) buy money market securities from corporations that need liquidity.(d) buy T-bills from the U.S. Treasury Department.Answer: B14. Finance companies raise funds in the mon

17、ey market by selling(a) commercial paper.(b) federal funds.(c) negotiable certificates of deposit.(d) Eurodollars.Answer: A15. Finance companies play a unique role in money markets by (a) giving consumers indirect access to money markets.(b) combining consumers investments to purchase money market s

18、ecurities on their behalf.(c) borrowing in capital markets to finance purchases of money market securities.(d) assisting the government in its sales of U.S. Treasury securities.Answer: A16. When inflation rose in the late 1970s,(a) consumers moved money out of money market mutual funds because their

19、 returns did not keep pace with inflation.(b) banks solidified their advantage over money markets by offering higher deposit rates.(c) brokerage houses introduced highly popular money market mutual funds, which drew significant amounts of money out of bank deposits.(d) consumers were unable to take

20、advantage of higher rates in money markets because of the requirement of large transaction sizes.Answer: C17. Which of the following is the largest borrower in the money markets?(a) commercial banks(b) large corporations(c) the U.S. Treasury(d) U.S. firms engaged in foreign tradeAnswer: C18. Money m

21、arket instruments issued by the U.S. Treasury are called(a) Treasury bills.(b) Treasury notes.(c) Treasury bonds.(d) Treasury strips.Answer: A19. The Treasury auctions 91-day and 182-day Treasury bills once a week. It auctions 52-week bills(a) once a month.(b) once every 13 weeks.(c) once a year.(d)

22、 every two weeks.Answer: A20. Which of the following statements are true of Treasury bills?(a) The market for Treasury bills is extremely deep and liquid.(b) Occasionally, investors find that earnings on T-bills do not compensate them for changes in purchasing power due to inflation.(c) By volume, m

23、ost Treasury bills are sold to individuals who submit noncompetitive bids.(d) All of the above are true.(e) Only (a) and (b) of the above are true.Answer: E21. Suppose that you purchase a 91-day Treasury bill for $9,850 that is worth $10,000 when it matures. The securitys annualized yield if held to

24、 maturity is about(a) 4 percent.(b) 5 percent.(c) 6 percent.(d) 7 percent.Answer: C22. Suppose that you purchase a 182-day Treasury bill for $9,850 that is worth $10,000 when it matures. The securitys annualized yield if held to maturity is about(a) 1.5%(b) 2%(c) 3%(d) 6%Answer: C23. Treasury bills

25、do not(a) pay interest.(b) have a maturity date.(c) have a face amount.(d) have an active secondary market.Answer: A24. If your competitive bid for a Treasury bill is successful, then you will(a) certainly pay less than if you had submitted a noncompetitive bid.(b) probably pay more than if you had

26、submitted a noncompetitive bid.(c) pay the average of prices offered in other successful competitive bids.(d) pay the same as other successful competitive bidders.Answer: B25. If your noncompetitive bid for a Treasury bill is successful, then you will(a) certainly pay less than if you had submitted

27、a competitive bid.(b) certainly pay more than if you had submitted a competitive bid.(c) pay the average of prices offered in other noncompetitive bids.(d) pay the same as other successful noncompetitive bidders.Answer: D26. Federal funds(a) are short-term funds transferred between financial institu

28、tions, usually for a period of one day.(b) actually have nothing to do with the federal government.(c) provide banks with an immediate infusion of reserves.(d) are all of the above.(e) are only (a) and (b) of the above.Answer: D27. Federal funds are(a) usually overnight investments.(b) borrowed by b

29、anks that have a deficit of reserves.(c) lent by banks that have an excess of reserves.(d) all of the above.(e) only (a) and (b) of the above.Answer: D28. The Fed can influence the federal funds interest rate by adjusting the level of reserves available to banks. The Fed can(a) lower the federal fun

30、ds interest rate by adding reserves.(b) raise the federal funds interest rate by removing reserves.(c) remove reserves by selling securities.(d) do all of the above.(e) do only (a) and (b) of the above.Answer: D29. The Federal Reserve can influence the federal funds interest rate by buying securitie

31、s, which _ reserves, thereby _ the federal funds rate.(a) adds; raising(b) removes; lowering(c) adds; lowering(d) removes; raisingAnswer: C30. The Fed can lower the federal funds interest rate by _ securities, thereby _ reserves.(a) selling; adding(b) selling; lowering(c) buying; adding(d) buying; loweringAnswer: C31. If the Fed wants to lower the federal funds interest rate, it will _ the banking system by _ securities.(a) add reserves to; selling(b) add reserves to; buying(c) remove reserves from; selling(d) remove r