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ECO Ten Multiple Choice Questions Quiz




Question;Question 1.1. Short-term loans between banks are called (Points: 1)A) federal funds.B) repurchase agreements.C) repos.D) discount loans.Question 2.2. In which of the following assets are commercial banks in the United States NOT allowed to invest checkable deposits? (Points: 1)A) home mortgagesB) corporate bondsC) municipal bondsD) U.S. Treasury bondsQuestion 3.3. If you have a checking account at First National Bank, the account is (Points: 1)A) an asset to both you and First National.B) a liability to both you and First National.C) an asset to First National and a liability to you.D) an asset to you and a liability to First National.Question 4.4. An most important service provided by underwriters is (Points: 1)A) lowering of information costs.B) dealing with problems of moral hazard.C) insuring firms against loss from fire.D) insuring firms against loss from employee theft.Question 5.5. The development of new financial securities or investment strategies using sophisticated models is known as (Points: 1)A) underwriting.B) factoring.C) financial engineering.D) hedging.Question 6.6. When investment banks buy or sell securities on their own account, it's called (Points: 1)A) financial engineering.B) proprietary trading.C) underwriting.D) factoring.Question 7.7. The difference between a savings deposit and a time deposit is (Points: 1)A) time deposits pay no interest.B) savings deposits pay no interest.C) time deposits have specified maturities.D) savings deposits have specified maturities.Question 8.8. Credit risk is the risk that (Points: 1)A) an insufficient number of borrowers will apply for loans or credit.B) interest rates will rise after a loan has been granted.C) interest rates will fall after a loan has been granted.D) borrowers might default on their loans.Question 9.9. Securities that banks sell and agree to repurchase are known as (Points: 1)A) federal funds.B) discount loans.C) repurchase agreements.D) NOW accounts.Question 10.10. What percentage of bank assets were in loans in 2012? (Points: 1)A) 8%B) 20%C) 37%D) 60%


Paper#56400 | Written in 18-Jul-2015

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