Which account should NOT be included in the asset section of a central bank balance sheet? A) currency in circulation B) official international reserves C) domestic credit D) government bonds ANSWER Answer: A
Date: September 19th, 2020
The ________ on an asset is the expected return on the asset in excess of the return on a risk-free asset. A) risk premium B) covariance C) systematic risk D) beta ANSWER Answer: A
Date: September 19th, 2020
Official international reserves consist of three major components EXCEPT: A) gold reserves. B) foreign exchange reserves. C) deposits of private financial institutions. D) IMF-related reserves assets. ANSWER Answer: C
Date: September 19th, 2020
The special drawing rights of the IMF and the European currency unit are two examples of ________. A) currency boards B) floating exchange rates C) target zones D) baskets of currencies ANSWER Answer: D
Date: September 19th, 2020
What is the name for the set of regulations pertaining to flows of capital into and out of a country? A) capital controls B) target zone system C) crawling peg D) lead-lag operations ANSWER Answer: A
Date: September 19th, 2020
What is the name for the composite currency that consists of various units of other currencies? A) pegged currency B) seignorage C) basket of currency D) special drawing rights ANSWER Answer: C
Date: September 19th, 2020
What is the firm’s marginal profit contribution from sales under the proposed plan of initiating the cash discount? (See Table 14.7) A) $22,500 B) $40,000 C) $62,500 D) $100,000 ANSWER C
Date: September 19th, 2020
The exchange rate system in which a country allows the value of the currency to be determined by the market forces of supply and demand is known as a A) currency board. B) floating exchange rate. C) target zone. D) pegged exchange rate system. ANSWER Answer: B
Date: September 19th, 2020
In the ________ exchange rate system, the currency has limited flexibility and the rate is kept within a fixed band. A) currency board B) floating exchange rate C) target zone D) pegged exchange rate system ANSWER Answer: C
Date: September 19th, 2020
What is the name of the account in which many central banks require their banks to hold a percentage of the deposits as reserves at the central bank? A) retained earnings B) excess reserves C) margin account D) required reserves ANSWER Answer: D
Date: September 19th, 2020
