Test Bank for Basic Finance 13th Edition Herbert B. Mayo, Michael J Lavelle
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Course
TB+SM
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TB+SM
TEST BANK FOR Basic Finance An Introduction to Financial Institutions, Investments, and Management, 11th Edition BY Herb
Test Bank for Basic Finance 13th Edition Herbert B. Mayo, Michael J Lavelle
test bank for basic finance an introduction to financial institutions
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TEST BANK FOR
Basic Finance An Introduction to Financial Institutions, Investments, and Management, 11th
Edition BY Herbert B. Mayo
TEST BANK*
Part 1 Financial Institutions
Chapter 2 The Role of Financial Markets and Financial
Intermediaries ..
Chapter 3 Investment Banking ..
Chapter 4 Securities Markets..........
Chapter 5 The Federal Reserve ..
Chapter 6 International Currency Flows................
Part 2 Financial Tools
Chapter 7 The Time Value of Money...........
Chapter 8 Risk and Its Measurement.........
Chapter 9 Analysis of Financial Statements.......
Part 3 Investments
Chapter 10 The Features of Stock..............
Chapter 11 Stock Valuation..............................
Chapter 12 The Features of Long-term Debt - Bonds
Chapter 13 Bond pricing and Yields................
Chapter 14 Preferred Stock.......
Chapter 15 Convertible Securities.........
Chapter 16 Investment Returns...........
Chapter 17 Investment Companies..........
Part 4 Corporate Finance
Chapter 18 Forms of Business and Corporate Taxation....
,Chapter 19 Break-even Analysis and the Payback Period....
Chapter 20 Leverage........
Chapter 21 Cost of Capital................................
Chapter 22 Capital Budgeting..............................
Chapter 23 Forecasting...........
Chapter 24 Cash Budgeting............
Chapter 25 Management of Current Assets..............
Chapter 26 Management of Short-term Liabilities......
Chapter 27 Intermediate-Term Debt and Leasing.........
Part 4 Derivatives
Chapter 28 Options: Puts and Calls..................
Chapter 29 Futures and Swaps.....
*Note: There are no TestBanks for Chapters 1-4 and 7
True / False
1. The power to create money is given by the Constitution to the Federal Reserve.
a. True
b. False
ANSWER: False
QUESTION TYPE: True / False
2. When commercial banks grant loans to the public, their total reserves are reduced.
a. True
b. False
ANSWER: False
QUESTION TYPE: True / False
3. When corporations retire (pay off) loans from commercial banks, excess reserves are increased.
a. True
b. False
ANSWER: True
QUESTION TYPE: True / False
4. When the general public uses money in checking accounts to purchase stock issued by corporations,
,the required reserves of banks are reduced.
a. True
b. False
ANSWER: False
QUESTION TYPE: True / False
5. Only large commercial banks are subject to the regulation of the Federal Reserve.
a. True
b. False
ANSWER: False
QUESTION TYPE: True / False
6. When the Federal Reserve sells securities that are purchased by individuals, the money supply is
increased.
a. True
b. False
ANSWER: False
QUESTION TYPE: True / False
7. When the Federal Reserve buys securities, the reserves of banks are increased.
a. True
b. False
ANSWER: True
QUESTION TYPE: True / False
8. Open market operations is a more flexible tool of monetary policy than changing the reserve
requirements.
a. True
b. False
ANSWER: True
QUESTION TYPE: True / False
9. Reserve requirements are infrequently changed to affect commercial bank lending.
a. True
b. False
ANSWER: True
QUESTION TYPE: True / False
10. The Federal Open Market Committee (FOMC) has twelve members that include the Board of
Governors.
a. True
, b. False
ANSWER: True
QUESTION TYPE: True / False
11. The presidents of the District Banks elect the Board of Governors of the Federal Reserve.
a. True
b. False
ANSWER: False
QUESTION TYPE: True / False
12. The federal funds rate is the interest rate the Federal Reserve charges banks when they borrow
reserves.
a. True
b. False
ANSWER: False
QUESTION TYPE: True / False
13. If the Treasury borrows from the Federal Reserve, the lending capacity of banks is reduced.
a. True
b. False
ANSWER: False
QUESTION TYPE: True / False
14. Deflation is a period of declining prices.
a. True
b. False
ANSWER: True
QUESTION TYPE: True / False
15. During a period of recession, the Fed sells securities.
a. True
b. False
ANSWER: False
QUESTION TYPE: True / False
16. The Consumer Price Index (CPI) is a measure of inflation.
a. True
b. False
ANSWER: True
QUESTION TYPE: True / False
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