Financial Markets, Saving, and Investment MCQs
Financial Markets, Saving, and Investment MCQs
Our experts have gathered these Financial Markets, Saving, and Investment MCQs through research, and we hope that you will be able to see how much knowledge base you have for the subject of Financial Markets, Saving, and Investment by answering these multiple-choice questions.
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1: Bonds are obligations issued by the corporation that promise the holder to receive fixed annual interest payments and payment of the principal upon maturity
A. True
B. False
2: Residual claimants of corporate resources who receive a proportion of profits based upon the ratio of shares held is called
A. Preferred stock
B. Common stock
C. Main stock
D. All of these
3: The theory that government borrowing drives up the interest rate, lowering consumption by households and investment spending by firms is called
A. Multiplier effect
B. Crowding out effect
C. Single effect
D. None of these
4: A stock that pays fixed, regular dividend payments that do not vary with the profits of the corporation is called
A. Preferred stock
B. Common stock
C. Main stock
D. All of these
5: The practice of using corporate profits for capital investment rather than dividend payouts is called
A. Positive earnings
B. Retaining earnings
C. Negative earnings
D. All of these
6: Stocks and bonds are securities
A. True
B. False
7: Entities that hold shares of stock in a corporation are called
A. Business man
B. Stakeholders
C. Demanders
D. All of these
8: Entities that hold shares of stock in a corporation are called ______.
A. Stockholders
B. Stock indexes
C. Stockbrokers
D. Stock issuers
9: A stock that pays fixed, regular dividend payments that do not vary with the profits of the corporation is known as ______.
A. Common stock
B. Preferred stock
C. Public stock
D. Market stock
10: Stocks and bonds are often referred to as ______.
A. Real estate
B. Commodities
C. Money markets
D. Securities
11: Financial institutions that accept funds from households and make them available to firms are known as ______.
A. Preferred stocks
B. Shareholders
C. Financial intermediaries
D. Common stocks
12: If Company Q were to go bankrupt, the owners of Company Q’s ______ would be most exposed to risk.
A. Bonds
B. Common stock
C. Preferred stock
D. Loanable funds
13: The relationship between saving and investment for an entire economy is represented by the equation ______.
A. S = I
B. S < I
C. S > I
D. S + I = 0
14: The sum of private saving and public saving in an economy is known as its ______ saving.
A. International
B. National
C. Closed
D. Open
15: Vera is studying the national budget of her country. She has found that, for her nation, T > G + TR. Vera’s country has ______.
A. Net exports
B. High interest rates
C. A budget surplus
D. Low household investment
16: The supply of loanable funds curve is ______.
A. Flat
B. Vertical
C. Negatively sloped
D. Positively sloped
17: The theory that government borrowing drives up the interest rate, lowering consumption by households and investment spending by firms is known as ______.
A. The Gini coefficient
B. The crowding-out effect
C. A budget deficit
D. A budget surplus
18: Fed policy after the 2001 recession ______.
A. Created high interest rates
B. Created low interest rates
C. Left interest rates unchanged
D. Had little effect on interest rates
19: Many of the people who took out subprime loans early in the 21st century ______.
A. Had well-established credit
B. Had nearly perfect credit scores
C. Had already been accepted for traditional loans
D. Were ineligible for traditional loans
20: In 2005–2006, the Fed ______.
A. Raised interest rates
B. Lowered interest rates
C. Set negative interest rates
D. Froze interest rates
21: Quickly buying and selling houses is known as ______.
A. Dumping
B. Flipping
C. Securing
D. Backing
22: One of the main reasons that Lehman Brothers failed is that it ______.
A. Issued a large number of loans to people with poor credit
B. Missed out on the housing boom of the early twenty-first century
C. Underestimated the risk of mortgage-backed securities
D. Was penalized for violating the terms of the Dodd-Frank Act
23: Money market securities are sometimes referred to as cash equivalents because _____.
A. They are safe and marketable.
B. They are not liquid.
C. An investor in a T-bill earns interest
D. None of these
24: Economic investment refers to _____.
A. Buying a financial asset for a gain.
B. Selling a financial asset for a gain.
C. Postponing purchases of goods and services.
D. Making new additions to a firm’s stock of capital.
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Financial Markets, Saving, and Investment MCQs
