FINWIZ X FIC

Which of the following is an example of an "off-balance-sheet" item?

• Accounts payable 

  
  

• Property, plant,and equipment

  
  

• Operating lease obligations 

  
  

• Accumulated depreciation

  
  

Quantitative easing (QE) is often compared to a financial magic trick. But what potential consequences might be lurking up the magician's sleeve?

• Asset price bubbles - Watch as QE waves its wand and conjures up inflated asset prices! 

  
  

• Deflationary spiral - Beware of the disappearing act of prices as QE tries to fight off deflation! 

  
  

• Currency appreciation - See how QE's magic spell can make a currency stronger and more valuable! 

  
  

• Wage inflation - Marvel at the trickery of QE as it pulls higher wages out of its top hat!

  
  

1.  If a country experiences a trade deficit, what is likely to happen to its capital account?

• The capital account surplus will increase 

  
  

• The capital account surplus will decrease 

  
  

• The capital account deficit will increase 

  
  

• The capital account deficit will decrease

  
  

1. When an economy operates below its potential output, what is the likely effect on inflation and unemployment?

• Inflation decreases, and unemployment decreases 

  
  

• 1. Inflation decreases, and unemployment increases 

  
  

• Inflation increases, and unemployment decreases 

  
  

• Inflation increases, and unemployment increases

  
  

  
  

1. Central bank implements an expansionary monetary policy, what is the potential impact on inflation and economic growth?
   

• Inflation decreases, and economic growth decreases 

  
  
  

• Inflation decreases, and economic growth increases

  
  

• Inflation increases, and economic growth decreases 

  
  

• Inflation increases, and economic growth increases

  
  

1. What is the purpose of a credit default swap (CDS)?
   

• To provide insurance against credit risk 

  
  

• 
  To facilitate
  international
  currency exchange

  
  
  

• To hedge against interest rate risk 

  
  

• To speculate on changes in commodity prices

  
  

1. What is the term used to describe the difference between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept for a particular stock?

• Bid-ask spread 

  
  

• Market volatility 

  
  

• Price-to-earnings ratio 

  
  

• Liquidity ratio

  
  

1. What does the "acid-test" or "quick" ratio measure?

• A company's ability to meet its short-term obligations using its most liquid assets

  
  

• The overall profitability of a company 

  
  

• The efficiency of a company's inventory management 

  
  

• The level of debt financing used by a company

  
  

1. What is the role of central banks in managing the economy?
   

• To conduct economic wizardry – determining tax rates and subsidies to maintain balance

  
  

• To be the "traffic controllers" of the financial world – directing flows of money to keep the economy moving smoothly. 

  
  

  
  

• To throw financial parties and invite all the economic players – because managing an economy is all about networking. 

  
  

• To make sure the economy doesn't go on a roller coaster ride – keeping it stable and on a steady path.

  
  

1. Which of the following is NOT a characteristic of a perfectly competitive market?

• Many buyers and sellers

• 1. Homogeneous products

     
     

• Barriers to entry

  
  

• Perfect information