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Overview and Interest Rates

Total questions: 10

Worksheet time: 3mins

Name
Class
Date
1.

these are the people who allocate their savings to productive investment opportunities

a)

Firms

b)

Investors

c)

Government

d)

Financial Intermediaries

2.

These are the markets for short-term, highly liquid debt securities.

a)

Physical asset markets

b)

Spot markets

c)

Money markets

d)

Primary markets

3.

_____, which are also called underwriters, help companies raise capital by helping corporations design securities with features that are currently attractive to investors. They buy these securities from the corporation and resell them to savers.

a)

Investment banks

b)

Central Bank

c)

Credit unions

d)

Mutual funds

4.

The powers and functions of the Bangko Sentral shall be exercised by the Bangko Sentral _____.

a)

Monetary Board

b)

Board of Directors

c)

Incorporators

d)

Board of Bankers

5.

Bangko Sentral shall also promote and maintain _____.

a)

monetary stability and the convertibility of the peso

b)

monetary convertibility of the peso

c)

fixed foreign exchange rate of the peso

d)

fiscal stability and taxability of income

6.

The price at which the stock would sell if all investors had all knowable information about a stock.

a)

Market price

b)

Intrinsic price

c)

Equilibrium price

d)

Efficient Price

7.

The possibility that the issuer or borrower will not pay the contractual interest or principal as scheduled

a)

default risk premium

b)

liquidity premium

c)

marketability premium

d)

maturity risk premium

8.

All government issued security has a maturity risk premium

a)

TRUE

b)

FALSE

9.

Not all securities issued by the corporation have a liquidity premium component

a)

TRUE

b)

FALSE

10.

This theory says that the market for loans is segmented based on maturity and that the supply of and demand for loans within each segment determine its prevailing interest rate

a)

expectations theory

b)

liquidity preference theory

c)

market segmentation theory

d)

flat yield theory