Capital Market Quiz
• Question 1
1 out of 1 points When a depository institution offers a loan, it is acting as a creditor. Answer Selected Answer: Correct Answer: True True
• Question 2
0 out of 1 points Assume that today, the annualized two-year interest rate is 12 percent, and the one-year interest rate is 9 percent. A three-year security has an annualized interest rate of 14 percent. What is the one-year forward rate two years from now? Answer Selected Answer: Correct Answer: a. 12.67 percent e. none of the above
• Question 3
0 out of 1 points If markets are ____, investors could use available information ignored by the market to earn abnormally high returns. Answer Selected Answer: Correct Answer: a. in equilibrium b. inefficient
• Question 4
1 out of 1 points If a security is undervalued, some investors would capitalize from this by purchasing that security. As a result, the security's price will ____, resulting in a ____ return for those investors.
Answer Selected Answer: Correct Answer: a. rise; higher a. rise; higher
• Question 5
1 out of 1 points Which of the following is a money market security? Answer Selected Answer: Correct Answer: a. commercial paper a. commercial paper
• Question 6
1 out of 1 points Interest income from municipal bonds is exempt from state taxes but is subject to federal taxes. Answer Selected Answer: Correct Answer: False False
• Question 7
0 out of 1 points The Securities Exchange Commission (SEC) was established by the Answer Selected Answer: Correct Answer: a. Federal Reserve Act. c. Securities Exchange Act of 1934.
• Question 8
1 out of 1 points Common types of capital market securities include Treasury bills and commercial paper. Answer Selected Answer: Correct Answer: False False
• Question 9
0 out of 1 points Commercial banks in aggregate have a lower value of assets than savings institutions. Answer Selected Answer: Correct Answer: True False
• Question 10
1 out of 1 points When security prices fully
1 out of 1 points When a depository institution offers a loan, it is acting as a creditor. Answer Selected Answer: Correct Answer: True True
• Question 2
0 out of 1 points Assume that today, the annualized two-year interest rate is 12 percent, and the one-year interest rate is 9 percent. A three-year security has an annualized interest rate of 14 percent. What is the one-year forward rate two years from now? Answer Selected Answer: Correct Answer: a. 12.67 percent e. none of the above
• Question 3
0 out of 1 points If markets are ____, investors could use available information ignored by the market to earn abnormally high returns. Answer Selected Answer: Correct Answer: a. in equilibrium b. inefficient
• Question 4
1 out of 1 points If a security is undervalued, some investors would capitalize from this by purchasing that security. As a result, the security's price will ____, resulting in a ____ return for those investors.
Answer Selected Answer: Correct Answer: a. rise; higher a. rise; higher
• Question 5
1 out of 1 points Which of the following is a money market security? Answer Selected Answer: Correct Answer: a. commercial paper a. commercial paper
• Question 6
1 out of 1 points Interest income from municipal bonds is exempt from state taxes but is subject to federal taxes. Answer Selected Answer: Correct Answer: False False
• Question 7
0 out of 1 points The Securities Exchange Commission (SEC) was established by the Answer Selected Answer: Correct Answer: a. Federal Reserve Act. c. Securities Exchange Act of 1934.
• Question 8
1 out of 1 points Common types of capital market securities include Treasury bills and commercial paper. Answer Selected Answer: Correct Answer: False False
• Question 9
0 out of 1 points Commercial banks in aggregate have a lower value of assets than savings institutions. Answer Selected Answer: Correct Answer: True False
• Question 10
1 out of 1 points When security prices fully