70. Why is the failure of a large bank more detrimental to the economy than the failure of a large steel
manufacturer?
A. The bank failure usually leads to a government bailout.
B. There are fewer steel manufacturers than there are banks.
C. The large bank failure reduces credit availability throughout the economy.
D. Since the steel company's assets are tangible, they are more easily reallocated than the intangible bank assets.
E. Everyone needs money, but not everyone needs steel.
71. Why do households prefer to use FIs as intermediaries to invest their surplus funds?
A. Transaction costs are low to the household since FIs are more efficient in monitoring and gathering investment information.
B. To receive the benefits of diversification that households may not be able to achieve on their own.
C. The FI has can benefit from combining funds and negotiating lower asset prices and transactions costs.
D. The FI can provide insurance at relatively low cost that will protect funds under management.
E. All of the above.
72. Financial intermediaries are
A. funds surplus units, because they exist to make money.
B. funds deficit units, because they must pay heavy regulatory fees and taxes.
C. funds surplus units, because they hold large portfolios of financial securities.
D. funds deficit units, because they must comply with minimum capital requirements.
E. neither funds surplus nor deficit units.
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73. Which of the following observations is true?
A. Central bank directly controls both inside and outside money.
B. Outside money is that part of the money supply produced by the private banking system.
C. Inside money refers to the quantity of notes and coin in the economy.
D. Bulk of the money supply consists of inside money.
E. Central banks cannot vary the quantity of outside money.
74. Net regulatory burden for FIs is higher because regulators may require the FI to
A. hold more capital than what would be held without regulation.
B. produce less information than would be produced without regulation.
C. hold more debt than what would be held without regulation.
D. hold fewer reserves than they would without regulation.
E. All of the above.
75. What distinguishes financial intermediaries from industrial firms?
A. FI balance sheets are almost totally comprised of financial assets while commercial firms hold substantial amounts of real assets.
B. Industrial firms are the customers of FIs, but FIs cannot be customers of industrial firms.
C. FIs deal exclusively in primary securities, but industrial firms specialize in secondary securities.
D. Industrial firms produce real goods or services while FIs only produce money.
E. Industrial firms are unregulated while FIs are heavily regulated.
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76. The origination of a home mortgage loan is considered to be a
A. primarysecurity, because this is the FI's primary source of business.
B. secondary security, because mortgages are typically resold in the secondary market.
C. primary security, because the mortgage note is a newly created security.
D. secondary security if the sale is for an existing home and a primary security if it is for a new home.
E. derivative security because the value of the mortgage note depends on the underlying value of the home.
77. How have the innovations of global financial networks and computerized money and information
transfer systems changed financial intermediation?
A. Financial intermediation has become riskier because it is more difficult to stay informed about worldwide events.
B. Financial intermediation has become more costly because it is necessary to invest in high cost technology.
C. Financial intermediation has been unaffected.
D. Financial intermediation has become more costly as global firms exploit economies of scale and scope.
E. Financial intermediation has become less risky as firms become adept at maintaining zero gap positions.
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78. The charter values of FIs will be higher if regulators
A. increase the cost of entry by requiring more capital.
B. restrict the number of activities permitted by FIs, thereby increasing potential profits.
C. restrict the number of FIs that can operate in a given market.
D. Answers A and B.
E. Answers A and C.
79. In a world without FIs, households will be less willing to invest in corporate securities because
they
A. are not able to monitor the activities of the corporation more closely than FIs.
B. tend to prefer shorter, more liquid securities.
C. are subject to price risk when corporate securities are sold.
D. may not have enough funds to purchase corporate securities.
E. All of the above.
80. FIs perform their intermediary function in two ways
A. they specialize as brokers between savers and users.
B. they serve as asset transformers by purchasing primary securities and issuing secondary securities.
C. they serve as asset transformers by purchasing secondary securities and issuing primary securities.
D. Answers A and B.
E. Answers A and C.
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81. Which of the following is true of secondary securities?
A. They include equities, bonds, and other debt claims.
B. They are backed by the real assets of corporations issuing them.
C. They are securities that back primary securities.
D. They are securities issued by FIs.
E. They must be placed in a separate account on order for primary securities to be offered.
82. Each of the following is a special function performed by FIs at a macro level EXCEPT
A. transmission of monetary policy.
B. credit allocation.
C. intergenerational wealth transfers or time intermediation.
D. denomination intermediation.
E. interbank lending and investing.
83. Which of the following is closely associated with credit allocation regulation?
A. Support the FI's lending to socially important sectors.
B. Transmission of monetary policy from the Federal Reserve to the economy.
C. Ensure the safety and soundness of the FI.
D. Prevent discrimination in lending on the basis of age, race, sex, or income.
E. Protect investors against abuses.
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金融风险管理练习选择题1
