chapter 1 test bankchapter 1 test bank.docxVIP

Chapter 01Investments: Background and Issues?Multiple Choice Questions?1.Financial assets represent _____ of total assets of U.S. households.??A.?over 60%B.?over 90%C.?under 10%D.?about 30%?2.Real assets in the economy include all but which one of the following???A.?LandB.?BuildingsC.?Consumer durablesD.?Common stock?3.Net worth represents _____ of the liabilities and net worth of commercial banks.??A.?about 51%B.?about 91%C.?about 11%D.?about 31%?4.According to the Flow of Funds Accounts of the United States, the largest single asset of U.S. households is ___.??A.?mutual fund sharesB.?real estateC.?pension reservesD.?corporate equity?5.According to the Flow of Funds Accounts of the United States, the largest liability of U.S. households is ________.??A.?mortgagesB.?consumer creditC.?bank loansD.?gambling debts?6.____ is not a derivative security.??A.?A share of common stockB.?A call optionC.?A futures contractD.?None of these options (All of the answers are derivative securities.)?7.According to the Flow of Funds Accounts of the United States, the largest financial asset of U.S. households is ____.??A.?mutual fund sharesB.?corporate equityC.?pension reservesD.?personal trusts?8.Active trading in markets and competition among securities analysts helps ensure that:I. Security prices approach informational efficiencyII. Riskier securities are priced to offer higher potential returnsIII. Investors are unlikely to be able to consistently find under- or overvalued securities??A.?I onlyB.?I and II onlyC.?II and III onlyD.?I, II, and III?9.The material wealth of society is determined by the economys _________, which is a function of the economys _________.??A.?investment bankers; financial assetsB.?investment bankers; real assetsC.?productive capacity; financial assetsD.?productive capacity; real assets?10.Which of the following is not a money market security???A.?U.S. Treasury billB.?6-month maturity certificate of depositC.?Common stockD.?Bankers acceptance?11.__________