1. A financial instrument in which a borrower obtains resources from a lender immediately in exchange for a promised set of payments in the future is called as ___________?
b) Bank Loan
c) Home Mortgage
d) Futures Contract
2. Which one of the following is a component of wealth that is held in a readily spendable form?
3. The return on the bond is equal to which of the following?
a) Coupon rate + rate of capital gains
b) Current yield + rate of capital gains
c) Coupon rate – rate of capital gains
d) Current yield – rate of capital gains
4. A loan that is used to purchase the real estate is known as
a) Real estate loan
b) Mortgages loan
c) Fixed payment loan
d) Home loan
5. When a bond becomes more liquid relative to its alternatives, the demand curve for bonds shifts to _____
c) No change
d) None of the given options
6. Consumer Price Index (CPI) measures the
a) Changes in the quantity
b) Changes in the prices
c) Changes in the cost
d) Changes in the profit
7. A risk-averse investor will
a) Always prefer an investment with a lower expected return
b) Always prefer an investment with a certain return to one with the same expected return but any amount of uncertainty
c) Always require a certain return
d) Always focus exclusively on the expected return
8. Which of the following best represent the true relationships between interest rates and bond prices?
a) Move in the same direction
b) Move in opposite direction
c) Sometimes move in the same direction, some times in opposite direction
d) Have no relationship with each other (i.e. they are independent)
9. Time affects the value of which of the following?
a) Financial Instruments
b) Financial Markets
c) Financial Institutions
d) Central Banks