Choose the best from Capital market.

Over time, generally, the value of stocks has:

a.steadily fallen.

b.remained constant.

c. increased smoothly

d.fluctuated substantially.

2.Countries with low inflation tend to have:

a.high money growth

b.low money growth

c. highly variable money growth

d.no money growth

3.Financial markets promote economic efficiency by

a.channeling funds from investors to savers.

b.creating inflation.

c. causing recessions.

d.channeling funds from savers to investors.

4.Transaction costs:

a.are the costs of clearing checks

b.are increased with financial intermediaries

c. are required by law.

d.are the time and money spent carrying out financial transactions.

5. Illustrate which of the following is not a depository financial institution?

a.Credit Union

b.Commercial bank

c. Life Insurance Company

d.Savings and Loan

6.Which of the following is included in M2 but not in M1?

a.NOW accounts

b.traveler's checks

c. money market deposit accounts

d.demand market deposit accounts

7.The money a bank keeps on hand due to legal requirements and to ensure it can meet customer's demands for withdrawal is known as_______.

a.vaults

b.non-loanable funds

c. cashier's check

d.reserves

8.As bond prices increase:

a.yields to maturity increase.

b.yields to maturity do not change.

c. yields to maturity can rise, fall, or not change.

d.yields to maturity decrease.

9.The real interest rate is:

a.the nominal rate minus the expected inflation rate.

b.the nominal rate plus the expected inflation rate.

c. the nominal interest rate/the CPI

d.the product of the nominal rate and the CPI.

10.The theory of asset demand tells us that

a.the higher the return on an asset, the lower the liquidity.

b.the demand for an asset will increase if the expected return on an asset rises.

c. risky assets have higher liquidity.

d.risky assets bring higher returns.