1. The long term financial market is also called :
a) the capital market
b) the money market
c) the speculative market
d) the intermediate market
2. Which of the following actions taken by the central bank is expansionary?
a) increasing the reverse requirement
b) the purchase of government bonds
c) increasing its policy rate
3. Which of the following government actions will most likely lead to an increase in the level of aggregate demand? A reduction in :
a) transfer payments
b) public spending on social goods and infrastructure
c) the capital gains tax
3. the interest rate charged on loans made by the federal reserve is called the:
a. fed funds rate
b. LIBOR rate
c. discount rate
d. prime rate
4. Joe smith ( like Warren buffet) was lucky enough to buy 400 shares of Coca Cola in 1984 at a price equivalent to $22. The price today is $60. During this time there were two, 2-for-1 splits. What is the dollar amount of return?
a. cannot determine from the data given
b. $35, 200
c. $87,200
d. $71,200
e. $11,200
5. INTC has a current price of 18, an expected dividend per share of $.50, and expected dividend growth of 5 % per year. According to the Discounted Dividend Value Model. INTC is undervalued if investors have a risk adjusted return of:
a. 9.78%
b. 8.22%
c. 7.78%
d. 6.21%
6. margin is :
a. the minimum down payment ( equity deposit) required
b. the maximum down payment (equity deposit) required
c. the stuff you put on toast in the morning.
d. the maximum amount that can be borrowed.
e. the minimum amount that can be borrowed
7. when the margin requirements are 60%, and the stock sells for $20, an investor with $1200:
a. can purchase a total of 100 shares using margin.
b. cannot purchase more than 120 shares with margin
c. can purchase a total of 50 shares without margin
d. impossible to calculate given the information above.