2. selecting appropriate salary levels for financial employees.

Size: px

Start display at page:

Download "2. selecting appropriate salary levels for financial employees."

Phoebe Woods
5 years ago
Views:

1 Prac Module 1 Question 1 3 The role of financial markets is to: 1. produce goods and services.. conduct fiscal policy. 3. record statistics for official use. 4. transfer funds from lenders to borrowers. The correct answer is: transfer funds from lenders to borrowers. Question 0 qaid= &qu 0 The allocative role of financial markets involves: 1. distributing currency through banks branch networks.. selecting appropriate salary levels for financial employees.

2 3. efficiently distributing scarce funds between competing uses. 4. addressing the needs of the poor and disadvantaged. The correct answer is: efficiently distributing scarce funds between competing uses. Question 3 0 qaid=634679&qu 0 A surplus economic unit is one that: 1. saves less than the national average.. saves more than it invests. 3. saves less than it invests. 4. saves more than the national average. The correct answer is: saves more than it invests. Question 4

3 0 qaid= &qu 0 An example of direct financing is: 1. Chad buying a surfboard using his credit card.. Qantas buying aviation fuel using a bank overdraft. 3. Telstra taking out a corporate loan from a bank. 4. Woolworths making a share issue through the stock exchange. The correct answer is: Woolworths making a share issue through the stock exchange. Question 5 0 qaid= &qu 0 The secondary market is where:

4 1. second-hand goods like cars and antiques are exchanged.. banks provide top-up loans to customers with a first loan. 3. investors exchange their financial securities with other investors. 4. none of the above. The correct answer is: investors exchange their financial securities with other investors. Question 6 0 qaid= &qu 0 Which of the following is NOT true of a financial market dealer? 1. Can be an individual or company.. Trades only on behalf of others, never on their own account. 3. Acts as a market maker. 4. Quotes two-way prices. The correct answer is: Trades only on behalf of others, never on their own account. Question 7

5 0 qaid= &qu 0 Which of the following is true? 1. Interest earnings of brokers are not taxed.. Dealers quote to buy or sell, while brokers only sell. 3. Brokers locate buyers for sellers and vice versa. 4. Both (1) and (3) are true. The correct answer is: Brokers locate buyers for sellers and vice versa. Question 8 0 qaid= &qu 0

6 The term short-selling refers to: 1. borrowing by promising to repay a security rather than a sum of money.. dissaving by selling shares. 3. disintermediation using the primary market. 4. borrowing without a bank. The correct answer is: borrowing by promising to repay a security rather than a sum of money. Question 9 0 qaid= &qu 0 Which of the following is an example of an exchange-traded market? 1. Stock exchange.. Foreign exchange. 3. Bank loans. 4. Interest rate swaps.

7 The correct answer is: Stock exchange. Question 10 0 qaid= &qu 0 Which of the following institutions is NOT responsible for the prudential regulation of banks and depositors protection? 1. ACCC.. ASIC. 3. APRA. 4. RBA. The correct answer is: RBA. Question 11 0 qaid= &qu 0

8 In financial markets, interest rates are normally quoted in terms. 1. half-yearly compound. daily simple 3. annual nominal 4. quarterly effective The correct answer is: annual nominal Question 1 0 qaid= &qu 0 The return actually earned on an investment over a year is known as the rate. 1. simple. real 3. effective

9 4. nominal The correct answer is: effective Question 13 0 qaid=634680&qu 0 An Australian 90-day bank bill with nominal interest rate of 6% per annum will have a 90-day rate of return equal to: %.. 1.5% %. 4. none of the above. The correct answer is: 1.48%. Question 14

10 0 qaid= &qu 0 An investor buys a 180-day bank bill with face value of $100,000 for $98,000. The yield to maturity is: %.. 8.8% % %. The correct answer is: 4.14%. Question 15 0 qaid= &qu 0 Which of the following is NOT needed to calculate the yield on a discount security?

11 1. The face value.. The maturity. 3. The dollar value of quarterly coupon payments. 4. The purchase price. The correct answer is: The dollar value of quarterly coupon payments. Question 16 0 qaid= &qu 0 Consider a five-year zero-coupon bond which has face value of $500,000 and a yield of 5% compounded semi-annually. The purchase price is: 1. $398,1.. $354, $390, $375,604. The correct answer is: $390,599.

12 Question 17 0 qaid= &qu 0 An instrument that provides the same payment every period but no face value at the end of its life is called a/an : 1. insurance bond.. annuity. 3. zero-coupon bond. 4. discount security. The correct answer is: annuity. Question 18 0 qaid= &qu 0

13 What is the coupon rate of a bond with face value $100,000 and cash payments per half year of $000? 1. %.. 4%. 3. 0%. 4. We cannot answer without knowing the maturity of the bond. The correct answer is: 4%. Question 19 0 qaid= &qu 0 In mortgage payments: 1. the interest and principal always move in opposite trends.. as the principal declines, the interest component plays an increasing role. 3. the roles of both interest and principal are constant throughout because of the straight line method used.

14 4. as the principal declines, the interest component plays a diminishing role. The correct answer is: as the principal declines, the interest component plays a diminishing role. Question 0 0 qaid= &qu 0 Suppose you purchase a two-bedroom apartment in Adelaide for $350,000 and you were able to provide $35,000 in deposit and successfully secured a 0-year home loan at 7% for the remaining balance. What are your monthly payments? The correct answer is: con6onkcw d

BFF1001 Week 1 Topic 1: What is finance

BFF1001 Week 1 Topic 1: What is finance Definitions Deficit A deficit unit saves less money than it invests A deficit unit needs funds If saving is less than investment, a deficit occurs Surplus A surplus