1. Which source of short-term funds for banks is typically considered a “last resort”?
A) Borrowing through the use of Repo Agreements
B) Borrowing from other banks at the Fed Funds Rate
C) Borrowing from the Discount Window at the Primary Credit Rate
D) Taking on large, short-term customer deposits
2. The purchase of longer-term Treasuries and Mortgage Backed Securities – beyond the typical purchases used in Monetary Policy – by the Fed which ended late in 2014 was known as:
a) Reverse Repurchase Agreement
b) Quantitative Easing 3
c) Operation Shift
d) Accelerated Monetary Growth
3. What is the net present value of a project that has an initial cash outflow of $-14,500, at time 0, and the following cash flows for years 1-4 The required return is 10.0%.
Year Cash Flows
1 $-2,500
2 $8,000
3 $8,000
4 $8,000