QUESTION Short-term financing is typically needed when a company decides to make a major investment. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Short-term financing can help a company meet current operating needs, but long-term financing is typically needed when a company decides to make a major investment, such as […]
QUESTION What is the name given to the overall business function of obtaining funds for a company and managing them to accomplish the company’s objectives? A) finance B) forecasting C) budgeting D) asset collection E) capital expenditure ANSWER Answer: A Explanation: A) Finance is the business function of obtaining funds for a company and […]
QUESTION Both government-issued coins and paper money are referred to as currency. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: Government-issued coins and paper money are both referred to as currency.
QUESTION Currency represents roughly 3/4 of all media of exchange in the United States. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Currency represents only about 1/3 of all media of exchange in the United States.
QUESTION Although the Federal Reserve is the central bank of the United States, it does not control the U.S. money supply. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: The Federal Reserve is the central bank of the United States and it DOES control the U.S. money supply.
QUESTION The only government organization that offers financial protection for money in banks, savings and loans, and credit unions is the FDIC. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Three different government organizations, the FDIC, SAIF, and NCUA, offer financial protection for money in banks, savings and loans, and […]
QUESTION All commercial banks are chartered. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: All commercial banks are chartered, meaning they have received government permission to operate.
QUESTION The Federal Reserve helps get money to commercial banks by making currency available and by making loans available. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: The Federal Reserve helps get money to commercial banks by making currency available and by making loans available.
QUESTION When the Fed raises the discount rate, banks are more motivated to borrow from it. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: When the Fed raises the discount rate, banks are less motivated to borrow from it.
QUESTION Insurance companies typically invest any excess funds in stocks, real estate, and other assets. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: Because many insurance companies collect more in premiums than they pay out in insured claims or operating expenses, they typically invest any excess funds in stocks, real […]
