Question 3 (3 points) The difference between the Money and Capital markets is: Q

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Question 3 (3 points) The difference between the Money and Capital markets is: Question 3 options:

Money market assets mature in one year or less while capital market assets have a longer duration (over 1 year).

The money market refers to stock options in the money and the capital market to debt assets.

Money market assets mature in one year or less while the capital market refers to physical infrastructure.

The money market refers to paper currency and the capital market covers stocks and bonds.

Question 4 (3 points) Question 4 Unsaved When economists refer to the role of money as a unit of account, they mean that: Prices are quoted in terms of money .

Money is a generally accepted means of payment for settlement of trade in goods and services .

The inflation rate is determined by the money supply .

Currency may be exchanged for gold .

Question 5 (3 points) Question 5 Unsaved Which of the following is a secondary market financial transaction :

The purchase of a used car.

A stock IPO.

An individual sells her shares of Apple.

A company CEO is awarded stock shares of the company that he manages as part of his compensation.

Question 6 (3 points) Question 6 Unsaved The primary cause of hyperinflation is:

An appreciation of the domestic currency.

The speculation in cryptocurrencies.

Printing money by the domestic government.

Rising prices of imports.

Question 7 (3 points) Question 7 Unsaved In order to function as a medium of exchange used in the transaction of goods and services, money must: Question 7 options:

Have a value that is indexed to the inflation rate.

Maintain a relatively constant value over an extended period of time.

Be in the form of a precious metal such as gold.

Have a fixed value in foreign exchange markets.

Question 8 (3 points) Question 8 Unsaved A mutual fund is best described by: Question 8 options:

A form of indirect finance where savers put their money in bank savings accounts.

A form of indirect finance where savers do not pick the specific assets (e.g. Apple stock) that are purchased.

A form of direct finance where the saver’s money goes directly to the company that is selling stocks or bonds.

A form of direct finance where mortgage loans are created from mutual fund shares.

Question 9 (3 points) Question 9 Unsaved Assume that you have $10,000 in savings. You have a choice of Mutual Fund A or Mutual Fund B. Fund A has a load of 3% and a 1% management fee. Fund B is a no load with a 1% management fee. Assume that after 1 year you have made no money or lost any money with your fund shares with the exception of load and management fees. After 1 year the value of your mutual fund shares will equal about: Question 9 options:

Fund A = $9,600, Fund B = $9,900.

$10,000 for both Fund A and Fund B.

$9,900 for both Fund A and Fund B.

Fund A = $9,900, Fund B = $9,600.

Question 10 (3 points) Question 10 Unsaved Bitcoins are created by: Question 10 options:

The Federal Reserve.

Below ground gold mining operations in Arizona.

The U.S. Treasury.

A computer algorithm.

Question 11 (3 points) Question 11 Unsaved For Bitcoins to be considered as money it would need to satisfy all of the following except:

Bitcoins would need to be used to compare prices for everyday goods and services.

Bitcoins would need to be used for daily transactions.

Savings can be measured in Bitcoins.

Bitcoins would need to be exchanged for gold.

Question 12 (4 points) Question 12 Unsaved Twitter had their IPO in 2013. Which of the following is not accurate:

The lockup refers to a portion of the IPO shares that cannot be sold in secondary market until months after the IPO date.

Twitter’s IPO share price is set before shares of Twitter open for trading on secondary markets.

The amount of money that Twitter received from the IPO is determined by the number of IPO shares and the market price of those shares when Twitter shares closed for trading on the IPO day.

Buyers of Twitter’s stock become partial owners of the company.

Question 13 (3 points) Question 13 Unsaved Which of the following is not accurate in regards to a stock IPO:

A lockup expiration will increase the number of shares available in the market .

The underwriter is an investment bank that handles the logistics of IPO creation .

The typical IPO underperforms the market as a whole (S&P 500) during the first year after the IPO date .

The total number of shares available over time is limited to the shares available on the IPO date

Explanation / Answer

Ans 3 Option C is correct answer Money Market means maturity of leaa than or equals to 1 year

Money market assets mature in one year or less while the capital market refers to physical infrastructure.

Ans 4 Option A is correct response

Prices are quoted in terms of money .

Ans 5 Option C is correct answer

An individual sells her shares of Apple.

A company CEO is awarded stock shares of the company that he manages as part of his compensation.

Ans 6 Option C is correct answer

Printing money by the domestic government.

Ans 7 Option A to facilitate transaction of good and services

Ans 8 A mutual fund is best described by

A form of indirect finance where savers do not pick the specific assets (e.g. Apple stock) that are purchased.

Ans 9  

Fund A = $9,600, Fund B = $9,900.

Ans 10 Bitcoins are created by

A computer algorithm.

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