Chapter 1 - MCQs
Chapter 1 - MCQs
Chapter 1 - MCQs
TRUE/FALSE QUESTIONS
1. The purpose of the financial system is to bring savers and borrowers together.
3.. Investment bankers help DSUs bring new primary security issues to market.
7. Financial claims or securities are written for the mutual benefit of both SSU and DSU.
8. DSUs and SSUs always have some contact with each other in financial markets.
1. An SSU’s
a. Business
b. Government
c. Foreign
d. Household
a. households b .businesses
5. All of the following are terms for or examples of financial claims except
a. bonds.
b. money.
c. loans.
d. commodities.
a. lenders. b. borrowers.
8. During 2008, Bob and Nancy Gutierrez expect total income of about $225,000 and are budgeting total
expenditures of about $180,000. For this budget period, the Gutierrez family is most specifically a(n)
a. DSU b. business
c. SSU d. household
a. Taking deposits.
c. Underwriting securities.
d. Completing regulatory paperwork and rendering advice.
10. Most of the financial claims issued by U.S. financial intermediaries are purchased by
11. The household sector is the largest surplus sector and invests in the capital market
c. a source of funding.
I. how suppliers will be paid. II. the appropriate level of debt for a firm.
III. which projects a firm should undertake. IV. how to invest the firm's cash.
a. I and II only
b. mixture of short-term and long-term debt a firm uses to finance its operations.
c. amount of long-term debt and equity a firm uses.
15. Capital budgeting is the process of:a. determining how to raise the money required to fund a project.