QUESTION What is the name given to the rate of return a firm must earn to meet the lenders’ and shareholders’ expectations? A) collateral rate B) secured rate C) tax rate D) cost of capital E) venture capital ANSWER Answer: D Explanation: D) A financial manager must pay attention to the cost of capital, […]
Date: September 3rd, 2020
QUESTION Which of the following is TRUE of most traditional checking accounts? A) They are a place to deposit money and then make purchases against those deposits. B) They generally pay higher interest than savings accounts. C) They usually charge fees for falling below a minimum balance. D) They generally do not require a monthly […]
Date: September 3rd, 2020
QUESTION Which of the following is NOT an example of money? A) two dimes B) a ten-dollar bill C) a check for $50 D) a baseball card worth $10 E) an American Express credit card ANSWER Answer: D Explanation: D) Gold or precious stones might also be used as money. More commonly, though, people […]
Date: September 3rd, 2020
QUESTION Which type of banking account offers interest rates competitive with those of brokerage firm funds? A) standard checking account B) Super-NOW account C) savings account D) money market accounts E) certificates of deposit ANSWER Answer: D Explanation: D) Money market accounts are bank accounts that offer interest rates competitive with those of brokerage […]
Date: September 3rd, 2020
QUESTION How is a revolving credit agreement different from a line of credit? A) Only in a revolving credit agreement does the bank guarantee the loan and is the bank obligated to loan funds up to the credit limit. B) Only in a revolving credit agreement does the bank specify how much it is willing […]
Date: September 3rd, 2020
QUESTION Capital One Trust is a commercial bank. Which of the following is NOT one of the ways that it makes money? A) charging interest on loans B) charging fees for account maintenance C) charging fees as forms of penalties D) issuing government bonds E) offering life insurance ANSWER Answer: D Explanation: D) Banks […]
Date: September 3rd, 2020
QUESTION If Sam, owner of a bicycle repair shop, repairs Jim’s bicycle in exchange for a dinner at Jim’s restaurant, what has just occurred? A) a barter B) a financial leverage C) a private placement D) an indenture term E) a term-loan agreement ANSWER Answer: A Explanation: A) Bartering is the trading of goods […]
Date: September 3rd, 2020
QUESTION Which type of bank account requires an even higher minimum balance than NOW accounts (such as $5,000 compared to $1,000)? A) standard checking account B) Super-NOW account C) savings account D) money market account E) certificate of deposit ANSWER Answer: B Explanation: B) An account requiring an even higher minimum balance than a […]
Date: September 3rd, 2020
QUESTION Which of the following is NOT one of the policy tools through which the Fed controls the money supply? A) the reserve requirement B) open-market operations C) the discount rate D) the consumer price index E) the federal funds rate ANSWER Answer: D Explanation: D) The Fed controls the money supply through three […]
Date: September 3rd, 2020
QUESTION Which of the following is NOT a common advantage of using money in an economic transaction? A) Money is often used as a form of collateral. B) Money is a store of wealth. C) Money is stable, in the sense that it has the same value to everyone. D) Money is not easily copied […]
Date: September 3rd, 2020
