不甘寂寞，特奉献125220 test 2(99-04)

囚犯

TEST TWO
(28 September 2004)
125.220 – FINANCIAL INSTITUTIONS, MARKETS, AND

Part A 10 questions – 4 points each
1. Which statement is not true about Treasury bills?
A) They have maturities less than one year.
B) Most are sold by "book-entry" method.
C) They are sold at a discount.
D) They are about as marketable as commercial paper.
2. Which of the following statements is not true about repurchase agreements?
A) These are a form of secured borrowing by a bank.
B) These involve a transaction between the Treasury Department and another party.
C) These are seldom used by the Federal Reserve in conducting monetary policy.
D) Treasury securities are often used in this type of transaction.
3. Securitization of loan portfolios, such as credit card loans and mortgage loans, will
occur if
A) the financial market will pay more for the loan portfolio than the issued asset-backed
securities.
B) a financial guarantee is obtained from a commercial bank.
C) the financial market will pay more for the issued asset-backed securities than the loan
portfolio.
D) the borrowers permit their loan to be securitized.
4. Investors in U.S. Treasury STRIPS are primarily interested in eliminating
which of the following bond investor risks?
A) default risk
B) price risk
C) reinvestment risk
D) foreign exchange risk
2
5. A stock purchased at $40 at the beginning of the year paid $10 in dividends and was
sold for a net price of $42 at the end of the year. The total annual return is
A) 25%
B) 30%
C) 100%
D) 28.6%
6. In a board of directors election for five directors and straight voting, a majority group of
shareholders will elect
A) four directors.
B) five directors.
C) four or five depending on how the cumulative voters vote.
D) the same proportional share of directors as their ownership share.
7. If a corporation wanted to guarantee its long-term costs of financing an investment
project, it could
A) sell T-bond futures for when the funds were needed.
B) buy T-bond futures for when the funds were needed.
C) sell T-bill futures for when the funds were needed.
D) buy T-bill futures for when the funds were needed.
8. If purchasing power parity holds,
A) foreign exchange rates remain constant.
B) foreign exchange rates adjust to reflect inflation differential across countries.
C) prices of goods and services will cost the same in terms of local currencies anywhere in
the world.
D) prices of foreign exchange will be the same anywhere in the world markets.
9. Suppose the current spot rate for the euro is NZ$ 1.8416. A call option with an exercise
price of NZ$ 1.8562 for one euro is said to be
A) in-the-money.
B) out-of-the-money
C) at-the-money
D) past breakeven
3
Part B 6 questions – 10 points each
11. Calculate the effective annual yield (this is, the bond equivalent yield) on a 52-day
T-bill selling for 98.555% of its face value.
A) 10.00%
B) 10.75%
C) 10.54%
D) 10.29%
12. The following table shows the annually compounded, spot interest rates of a sample of
strips of UK gilts (government bonds) in December 1998. Each strip has a face value of
₤100.
Maturity Spot interest rate (%)
December 2000 4.93
December 2005 4.48
December 2006 4.52
December 2007 4.41
December 2028 4.17
Calculate the price of December 2006 strip in December 1998.
A) ₤70.201
B) ₤90.826
C) ₤29.334
D) ₤73.565
13. A British bank enters into a ₤66.67 million five-year swap. It agrees to pay company A
each year a fixed rate of 6 percent and to receive in return LIBOR. The first payment on
the swap occurs at the end of year 1 and is based on the starting LIBOR rate of 5
percent. Calculate the net payment from the bank’s perspective.
A) $4 million
B) -$4 million
C) $0.67 million
D) -$0.67 million
10. A bank with a high positive maturity GAP can hedge its balance sheet by
A) buying call options on financial futures.
B) buying put options on financial futures.
C) reducing its rate-sensitive liabilities.
D) swapping fixed-rate interest income for variable-rate interest income.
4
14. Company Z’s earnings and dividends per share are expected to grow for four years by 5
percent a year. Its growth will stop after year 4. In year 5 and afterward, it will pay all
earnings as dividends. Forecasted earnings per share at year 5 are $18.23. If the first
year’s dividend is $10 and the market capitalization rate (this is, the discount rate) is 8
percent, what is the current stock price?
A) $35.53
B) $227.91
C) $198.54
D) $203.05
15. Charlotte Insurance Company plans to satisfy cash needs in three months by selling its
nine-month U.S. Treasury bill holdings. (Note: the maturity of the T-bills will be six
months in three-month time.) It is concerned that interest rates might increase over the
next three months, which would reduce the market value of bills by the time they are
sold. To hedge against this possibility, Charlotte sells six-month U.S. Treasury bill
futures with a par value of $5 million at the prevailing price of 98.5. The futures
contract calls for delivery of six-month Treasury bills in three months time. If the price
of the futures contract declines to 94.5 in three-month time, what is the change in the
value of the short futures position? Hint: start with calculating the value of 1 percent
interest on $5 million T-bills for six months.
A) $50,000
B) -$50,000
C) $100,000
D) -$100,000
16. Suppose that in August 2003, two-year interest rate was 3.65 percent p.a. in the United
States. The dollar spot exchange rate was 120.70 yen. One year later, one-year interest
rate is 3 percent p.a. in the United sates, while the value of the dollar in terms of yen has
depreciated to 115.00 yen. Madame Butterfly from Osaka (Japan) invested in a U.S.
$1,000 face value two-year zero-coupon bond in August 2003 (after converting her yen
into dollars) and sold the bond in August 2004. What was her rate of return in yen?
A) 0.6%
B) -0.6%
C) 4.3%
D) -4.3%
answer:dbccb babba daddc b


ASSIGNMENT TWO - TEST

2003/125.220
125.220 Financial Institutions, Markets and Money
Assignment 2 - Test - Consists of 45 Multiple Choice Questions
1. The money market is generally an example of:
A. An auction market.
B. A brokered market.
C. A dealer market.
D. A direct search market.
E. None of the above.
2. Which of the following is true?
A. New Zealand Treasury bills are issued on tap as required.
B. Commercial paper has the same rates as T-bills.
C. Promissory notes and certificates of deposits typically have the lowest yields in
the money market.
D. Money markets involve a greater variety of investors than borrowers.
E. The money market instruments are discount securities.
3. Which of the following is NOT a characteristic of a money market instrument?
A. Liquidity.
B. Marketability.
C. Long maturity.
D. Inclusion of a liquidity premium.
E. C and D.
4. All of the following are correct regarding the money markets EXCEPT:
A. The secondary market for bank bills is very liquid.
B. The margin on yields between Crown and non-Crown money market securities
is in the order of four per cent.
C. Treasury bills are generally issued with maturity of one to three months.
D. The yield on bank bills is slightly above Treasury bills due to the good credit
rating of New Zealand’s banks.
E. The market for 90-day bank bill futures allows investors to hedge with the
instrument.
5: What is the discount rate of a 120-day bank bill with a face value of $100,000 and
currently selling for $95,234 with the full 120 days to run?
A. 13.93 per cent.
B. 14.50 per cent.
C. 15.22 per cent
D. 16.58 per cent
E. None of these
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6. All of the following are CORRECT regarding commercial paper EXCEPT:
A. Commercial paper is a security issued under the borrower’s own name.
B. A major cost associated with issuing commercial papers is the premium above
bank bill rate that must be offered to sell them.
C. The premium above bank bill rate that must be offered to sell commercial paper
ranges from 50- 100 basis points.
D. The bank bill market is more liquid than commercial paper in New Zealand.
E. The issue of commercial paper is usually underwritten by financial institutions.
7. A company issues a 90-day bill with a face value of $100,000, yielding 7.65% per
annum. What amount would the company raise on the issue?
A. $84,130.46.
B. $92,350.21.
C. $98,123.39.
D. $98,148.62.
E. $100,000.
8. All of the following are CORRECT regarding the New Zealand bond market
EXCEPT:
A. A large proportion of bonds issued by banks are to meet capital requirements.
B. Certificates of deposits are used by banks for short-term funding.
C. There are two forms of certificates of deposits that reflect the method for
ownership transfer.
D. Negotiable certificates of deposits have liquidity approaching that of bank bills.
E. The interest rates banks charge on their lending is not closely related to the
yields on certificates of deposits.
9. All of the following securities are capital market instruments EXCEPT?
A. Auckland City Council bonds.
B. Three-year New Zealand Government stock.
C. A Finance company debenture.
D. A 90-day New Zealand Treasury security.
E. A GPG Finance Limited capital note.
10. Which of the following is/are difference(s) between typical money market instruments
and typical bond market instruments?
A. Their sensitivity to interest rate changes.
B. Money market instruments are mainly discount securities.
C. The relative illiquidity of the bond market compared with the money market.
D. The structure of the interest repayments.
E. All of these are differences.
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11. Which of the following is CORRECT regarding a corporate bond?
A. A corporate bond with warrants gives the holder the right to exchange the
bond for a specified number of the company’s common shares.
B. A corporate debenture is an unsecured bond.
C. A corporate convertible bond gives the holder the right to exchange the bond
for a specified number of the company’s common shares.
D. Holders of corporate bonds have voting rights in the company.
E. Most corporate bonds are issued with annual coupons.
12. A bond’s price will be _______ when the coupon rate is higher than current market
interest rates, _______ when the coupon rate is equal to the current market interest
rates, _______ when the coupon rate is less than the current market interest rates
A. at a premium; equal to the face value; at a discount.
B. at a premium; at a discount; equal to the face value.
C. at a discount; at a premium; equal to the face value.
D. equal to the face value; at a discount; at a premium.
E. equal to the face value; at a premium; at a discount
13. The market price of previously issued bonds is often different from face value as:
A. The coupon rate has altered.
B. The maturity date has altered.
C. The market rate of interest has altered.
D. Previously issued bonds sell at a discount to new bonds.
E. Previously issued bonds are often subject to being recalled by the issuer.
14. A $1,000 face value bond with coupon rate of 8 per cent paid annually has five years
to maturity. If bonds of similar risk are currently earning 6 per cent, what is the current
price of the bond?
A. $920.15.
B. $1,000.
C. $1,080.
D. $1,084.25.
E None of the above.
15. Purchasing a call option on stock gives the owner:
A. The right to purchase an unlimited amount of stock at a specified price until
expiration.
B. The right to purchase a specified amount of stock at its current value until
expiration.
C. The right to purchase a specified amount of stock at the exercise price until
expiration.
D. The right to sell a specified amount of stock at the strike price until maturity..
E. The right to sell an unlimited amount of stock at a specified price until maturity.
16. An unexpected change in the relationship between the spot price and the price of the
futures contract is known as:
A. A cash position loss
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B. Basis risk.
C. A margin call.
D. Reinvestment rate risk.
E. None of the above.
17. The process of marking to market involves:
A. Rewriting futures contracts at the end of the contract period.
B. An inventory of each broker’s contracts, for tax purposes.
C. Rewriting futures contracts daily to reflect current prices.
D. The sale of futures contracts that exhibit undesirable price volatility.
E. Rewriting the contract size daily to reflect price changes.
18. You purchase one IBM call option with exercise price of $70 for a premium of $6.
Ignoring transaction costs, the breakeven price of this option is:
A. $98
B. $64
C. $76.
D. $70.
E. None of the above.
19. A call option has a price of $5 and an exercise price of $50. You buy the underlying
asset of $50, write the call and hold until expiration. What is the net profit if the
underlying security sells at $60 at expiration?
A. $5.
B. $6.
C. $10.
D. $15.
E. None of the above.
20. When an option is out of the money at expiration:
A. The spot price is less than the strike price, if the option is a put
B. The spot price exceeds the strike price, if the option is a call.
C. The spot price exceeds the strike price, if the option is a put.
D. The strike price is less than the spot price if the option is a call.
E. The strike price equals the spot price, if the option is a call.
21. To hedge a long position in New Zealand Government stock, an investor most likely
would:
A. Buy interest rate futures.
B. Sell NZSE10 futures.
C. Buy New Zealand Government stock in the spot market
D. Sell interest rate futures.
E. None of the above.
22. Duration estimates are important to financial institutions because:
A. Duration allows institutions to improve asset management while holding
liabilities constant.
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B. Duration allows institutions to maximize the impact of interest rate variability
on their portfolios.
C. Duration allows institutions the potential to compare interest rate risk exposure
of the financial instruments, regardless of characteristics.
D. All of the above.
E. None of the above.
23. If the maturity of a bank’s assets is longer than the maturity of the bank’s liabilities, the
bank.
A. Is in a reinvestment position.
B. Is in a refinance position.
C. Has a positive funding gap.
D. Has a negative funding gap.
E. Faces default risk.
24. Which of the following methods would NOT typically aid a bank in reducing interest
rate risk?
A. Matching maturities of assets and liabilities.
B. Issuing more floating rate loans.
C. Decreasing the average maturity of assets.
D. Decreasing the average maturity of liabilities.
E. None of the above.
25. As a bank’s duration gap approaches zero, the bank:
A. Is less reliant on outside funding of new assets.
B. Becomes immune to the default risk of borrowers.
C. Has its value less affected by interest rate changes.
D. Has its profitability approach zero.
E. Has all liabilities with the same maturity.
Figure 1
Premier National Bank
Assets Liabilities
Interest-sensitive $60 million $90 million
Fixed-rate $70 million $40 million
26. Referring to the above figure 1 Premier National bank has a repricing gap of:
A. +50
B. +30
C. +10
D. 0
E. -30
27. Referring to Figure 1, if interest rates rise by 500 basis points, then bank profits
(measured using repricing gap analysis) will:
A. Fall by $0.5 million.
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B. Fall by $1.5 million.
C. Fall by $3 million
D. Increase by $0.5 million.
E. Increase by $1.5 million
28: If the average duration of a bank’s assets is 2.90 years, then if market interest rates rise
from 5 to 7 per cent, what is the change in market value if its total asset value is $100
million?
A. Falls by 5.42 million
B. Falls by 5.52 million.
C. Falls by 18.97 million
D. Falls by 19.33 million
E. None of these.
29: If a bank has more rate-sensitive liabilities than rate-sensitive assets a fall in interest
rates will ________ the net interest margin and income.
A. reduce.
B. raise.
C. not affect
D. reduce considerably
E. None of these.
30. Which of the following statements are correct?
A. FOMC policy directives are released immediately to the public after each
meeting
B. Independence of the Fed allows policy to be set from a long-run perspective.
C. Access to the Fed’s discount window is restricted to banks with federal
charters.
D. The Fed’s discount window is available only to banks in very sound financial
position.
E. None of the above.
31. Which of the following is an INCORRECT statement about the Federal Open Market
Committee (FOMC).
A. The FOMC issues a directive which sets the Fed discount rate.
B. The voting members of the FOMC are the 7 governors, the President of the NY
Fed, and the four other district presidents on a rotating basis.
C. The FOMC meets about every six weeks to review economic conditions.
D. The FOMC policy decision is forwarded to the trading desk of the NY Fed.
E. None of the above.
32. Which of the following is a CORRECT statement?
A. The Federal Reserve discount rate is adjusted daily as money market conditions
change.
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B. The Fed’s discount window is available only to banks that are members of the
Federal Reserve System.
C. The closely watched Federal funds interest rate is one of the most stable rates
in the financial markets.
D. The FOMC’s policy directive is set in the form of a target range.
E. None of the above.
33. If the FOMC decided to reduce the amount of reserves available to banks, it could:
A. Purchase government securities
B. Sell government securities.
C. Reverse repos government securities.
D. Lower the rate on loans from the discount window.
E. Auction a new issue of U.S. government securities.
34. All of the following U.S. institutions are subject to reserve requirements EXCEPT:
A. Savings and Loans
B. Credit Unions.
C. Branches of foreign banks in the U.S.
D. Insurance companies with an internet bank division.
E. All of the above institution types are subject to reserve requirements.
35. Open market operations by the New Zealand Reserve Bank refer to:
A. The method by which the New Zealand Reserve Bank allows banks to raise
short-term funds up to a year.
B. The method by which the New Zealand Reserve Bank implements monetary
policy.
C. The market for short-term securities.
D. The method by which the New Zealand Reserve Bank monitors the foreign
exchange sector.
E. The process of registering foreign banks to set up banks in New Zealand.
36. When the New Zealand Reserve Bank sells government securities:
A. It injects extra cash into the financial markets.
B. It loosens monetary policy.
C. It puts a downward pressure on interest rates.
D. It tightens monetary policy.
E. It puts a downward pressure on foreign exchange rates.
37. All of the following statements are consistent with loosening of monetary policy in
New Zealand EXCEPT:
A. The NZ dollar may rise in value.
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B. Interest rates fall.
C. Bank lending generally increases.
D. The Reserve Bank will buy government securities.
E. The Official Cash Rate decreases.
38. All of the following are CORRECT regarding monetary policy in New Zealand
EXCEPT:
A. The Official Cash Rate (OCR) is reviewed approximately every six weeks.
B. The minimum size of the adjustment to the Official Cash Rate is 25 basis
points.
C. The Reserve Bank pays an interest rate 25 basis points above the Official Cash
Rate for money deposited overnight in settlement accounts.
D. Repurchase agreements (Repos) are provided by the Reserve Bank at 25 basis
points above the Official Cash Rate.
E. Currently the Reserve Bank uses a cash rate corridor approach to set the
overnight interest rates.
39. If the Official Cash Rate is 5.5 %, what is the New Zealand’s Reserve Bank’s quoted
rate for the overnight deposit rate for settlement accounts?
A. 3%
B. 5.25%.
C. 5.0%
D. 5.75%.
E. 8%.
40. An expectation of future monetary policy tightening tends to ________ 90-day interest
rates and _______ the exchange rate and eventually results in a ________ pressure on
real economy activity.
A. increase; increase; upwards
B. increase; decrease; upwards.
C. decrease; increase; downwards.
D. decrease; decrease; upwards.
E. increase; increase; downwards.
41. In an effort to increase government revenue, the New Zealand government decide to
increase the corporate tax rate. The likely result will be:
A. The supply curve for bonds shifts to the right.
B The demand curve for loanable funds shifts to the left.
C The equilibrium interest rate rises.
D The equilibrium price of bonds falls.
E. The demand curve for loanable funds shifts to the right.
42. _______ tend to question the effectiveness of _______ policy in shifting aggregate
_______, since they believe money supply growth is the main factor in generating
business cycles.
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A. Keynesians; fiscal; demand
B. Keynesians; monetary; demand
C. Monetarists; monetary; demand
D. Monetarists; fiscal; demand
E. Keynesians; monetary; demand
43. Milton Friedman and Anna Schwartz conclude that:
A. Output fluctuations cause changes in money growth.
B. Changes in money growth cause output fluctuations.
C. There is no causal link from the money supply to output.
D. There is no evidence for changes in the money supply that are not influenced by
changes in output or by third factors that influenced both money and output.
E. Changes in economic activity cause changes in the rate of money growth.
44. Milton Friedman and Anna Schwartz found in their study of money and business cycles
from the Civil War to 1960 that:
A. The growth rate of the money supply falls before output declines in every
business cycle.
B. The growth rate of the money supply rises before output declines in every
business cycle.
C. The growth rate of the money supply falls before output declines during some
business cycles and rises before output declines during other business cycles.
D. There is no consistent relationship between money and output over the business
cycle.
E. Changes in inflation cause changes in money growth.
45. All of the following are correct EXCEPT:
A. The tools of fiscal policy are taxes, government spending and transfer
payments.
B. Increased borrowing by a government may lead to a rise in market interest
rates.
C. Changes in government expenditure policies are likely to have a direct impact
on nominal domestic demand.
D. Long-term Government borrowing has tended to increase an economy’s rate of
growth and reduce inflationary pressures.
E. None of the above.

answer

1. C 21 D 41. B
2. E 22. C 42. D
3. E 23. B 43. B
4. B 24. D 44. A
5. C 25. C 45. D
6. C 26. E
7. D 27. B
8. E 28. B
9. D 29. B
10. E 30. B
11. C 31. A
12. A 32. D
13. C 33. B
14. D 34. E
15. C 35. B
16. B 36. D
17. C 37. A
18. C 38. C
19. A 39. B
20. C 40. E

[ 本帖最后由 囚犯 于 2005-9-14 03:02 编辑 ]

Mayson

220的群里有下载...........还是谢谢了.....

囚犯

125.220 2002 Internal test
Section A: Answer all 28 multichoice questions- total marks 28
1. Yields on commercial paper and certificates of deposits are typically:
A. Lowest in the money market.
B. The same as rates on T-bills.
C. Highest in the money market.
D. Very stable.
E. None of the above.
2. Which of the following is/are difference(s) between typical money market instruments
and typical bond market instruments?
A. Time between issuance and maturity.
B. Number of payments involved.
C. Structure of how they are priced.
D. Amount of volatility in price due to changes in interest rates.
E. All of these are differences.
3. The risk that a security’s price may fall due to the borrower failing to meet interest
payments, is known as:
A. Market risk.
B. Default risk.
C. Inflation risk.
D. Currency risk.
E. Political risk.
4. Which of the following statements is NOT a characteristic of money market
instruments?
A. Short term to maturity.
B. Low default risk.
C. Small denomination.
D. High marketability.
E. Traded by dealers.
5. Bonds that have a stronger claim than other such issues of the same firm are known as
______.
A. Subordinated debentures.
B. Debentures.
C. First mortgage bonds.
D. Second mortgage bonds.
E. Senior bonds.
Turn over to p.3
125.220 2002 Internal test
3
6. What happens to the coupon rate of a $1,000 par bond that pays $80 annually in
interest if interest rates change from 9% to 10%?
A. The coupon rate increases to 10%.
B. The coupon rate remains at 9%.
C. The coupon rate remains at 8%.
D. The coupon rate remains at 10%.
E. The coupon rate increases to 9%.
7. Which of the following is correct when the bond investor’s rate of return for a
particular period exceeds the bond coupon rate?
A. The bond decreased in price during the period.
B. The bond increased in price during the period.
C. The coupon payment decreased in price during the period
D. The coupon payment increased in price during the period.
E. It is not possible for a bondholder’s rate of return to exceed the bond’s coupon
rate.
8. Default risk is likely to be lowest for:
A. Short-term Treasury securities.
B. Short-term corporate securities.
C. Long-term Treasury securities.
D. Long-term corporate securities.
E. Medium-term corporate securities.
9. Which of the following is INCORRECT concerning forward contracts? Forward
contracts?
A. Are not standardised.
B. Do not set the price until the end of the contract.
C. Are not traded on organized exchanges.
D. Are not traded to market daily.
E. Involve two parties locked into an agreement.
10. An increase in the sale of wet weather gear in the winter would most likely be:
A. A peak phase of a business cycle.
B. An expansion or growth phase of a business cycle.
C. A seasonal variation.
D. Caused by cheap imports.
E. None of the above.
Turn over to p.4
125.220 2002 Internal test
4
11. Which of the following is true regarding the use of collateral?
A. The lender has claim on a specific asset in the event the borrower defaults on a
loan.
B. A collaterised loan does not require any monitoring by the lender.
C. Collateral reduces the cost of dealing with the actual process of default.
D. Both A. and B.
E. Both A and C.
12. Which of the following statements regarding duration is correct?
A. Duration is always longer than the term to maturity.
B. All else equal, as the coupon rate increases, duration will increase.
C. For a zero-coupon bond, duration will equal the term to maturity.
D. The use of duration only eliminates price risk for a bond portfolio.
E. The longer a bond’s duration, the smaller the percentage change in a bond’s
price for a given change in interest rates.
13. For which of the following alternatives, traders receive, rather than pay, a premium?
A. Option sellers.
B. Option buyers.
C. Both option sellers and buyers.
D. Call sellers only.
E. Day traders only.
14. You buy a 90-day put option for $5 with exercise price of $100. After 90 days, the
underlying security sells at $70. What is the net profit or loss on your purchase?
A. $5.
B. $10.
C. $20.
D. $25.
E. None of the above.
15. Which of the following is true for an investor that owns a share of stock and has
purchased a put option on the stock?
A. The investor profits when the stock increases in value.
B. The maximum loss is the price of the option premium.
C. The investor is protected against upside potential.
D. Increases in stock value go to the seller of the put.
E. The put increases in value when the market increases.
Turn over to p.5
125.220 2002 Internal test
5
16. If you agreed to pay 100,000 pounds in 90 days for importing into New Zealand, steel
from a UK company, you could protect yourself from price risk by:
A. Selling pounds in the forward market for delivery in 90 days.
B. Buying pounds in the futures market for delivery in 90 days.
C. Selling pounds in the futures market for delivery in 90 days.
D. Selling dollars now.
E. Wait 90 days and buy pounds
17. Which of the following is the holder of a warrant allowed to do prior to a specified
date?
A. Convert debt into a specified number of shares.
B. Sell common shares at a specified price.
C. Exchange stock for bonds at a specified price.
D. Purchase shares at a predetermined price.
E. Exchange bonds for stock at current market prices.
18. The interest rate charged on Federal District bank loans to depository institutions is
called:
A. The Treasury bill rate.
B. The Dealer RP rate.
C. The Federal funds rate.
D. The discount rate.
E. None of the above.
19. Which of the following is a correct statement?
A. The Federal Reserve is composed of 12 members appointed for 7 years.
B. The US President appoints the members of the Board of Governors for 14
years.
C. The US is divided into 22 Federal Reserve districts, each of which has a
Federal Reserve bank.
D. The Federal Advisory Committee consists of 20 members from each Federal
Reserve district.
E. All of the above.
20. If the Fed Reserve Bank wants to decrease the money supply, it will _________.
A. Sell government securities.
B. Avoid open market operations.
C. Purchase government securities.
D. Multiply money.
E. Broaden the definition of the monetary base.
Turn over to p.7
125.220 2002 Internal test
6
21. Which of the following is a correct statement about the FOMC?
A. The members of the FOMC include the 7 governors and the 12 presidents of
the District Federal banks.
B. The FOMC directive is released to the public with a lag of roughly 6 weeks.
C. Changes in the Fed’s discount rate is determined by a vote of the Board of
Governors, not the FOMC.
D. All of the above.
E. None of the above.
22. The outcome of the Federal Open Market Committee’s (FOMC) decision on monetary
policy every six weeks will be forwarded to the Federal bank in:
A. Boston.
B. Chicago.
C. Dallas.
D. New York.
E. Washington.
23. Which of the following main indicators are NOT monitored by the New Zealand
Reserve Bank when assessing monetary conditions?
A. The exchange rate
B The shape of the yield curve
C. The level of interest rates relative to expected inflation.
D. Money and credit aggregates.
E. Measured inflation.
24. An initial increase in the money base will, through bank lending activity, have a great
theoretical overall increase in money supply. If banks maintain a reserve ratio of 10%
of deposits, and assuming a zero cash drain over time, what will be the theoretical
increase in the money supply resulting from an initial increase in the money base of
$400 million?
A. $40 million.
B. $400 million.
C. $800 million.
D. $1,000 million.
E. $4,000 million.
25. The government may stimulate the economy in all of the following ways except:
A. Decrease taxes.
B. Increase spending.
C. Increase spending and decrease taxes the same amount.
D. Decrease transfer payment levels.
E. Increase transfer payments
125.220 2002 Internal test
7
26. Which of the following is a correct statement?
A. The large majority of NZ Government debt issues have maturities less than one
year.
B. If the average maturity of NZ Government debt is short, the average interest
cost on the national debt will be high.
C. A large proportion of NZ Government debt is denominated in foreign
currencies.
D. Limits on the national debt provide an important constraint on government
spending in the long-run.
E. None of the above.
27. A “tight” monetary policy may be associated with which of the following?
A. A high real interest rate.
B. A high real nominal rate.
C. A low value of the NZ dollar.
D. Higher interest rates.
E. Increases in the money supply.
28. Which of the following is a correct statement about the classical Monetarist view?
A. The rate of change in velocity of money is a positive constant.
B. Velocity of money is positively correlated with inflation rates.
C. Changes in the money supply are the most important government policy tool.
D. All of the above.
E. None of the above.
Turn over to p.8
125.220 2002 Internal test
8
Section B: Answer all questions. The mark for each question is given in the bracket beside
the question. Section B total is 42 marks.
1. A company issues a bank-accepted bill to fund a short-term business project. The bill is
issued for 270 days with a face value of $100,000, at a yield of 7.5% per annum. What
amount will the company raise to fund the project?
(2 marks)
2. Outline the attributes of an unsecured note. Include in your answer its ranking and its
classification as debt or equity .
(3 marks)
3. Explain the purpose of a credit rating on a corporate debt issue. Include in your
answer an example of an international credit rating agency.
(3 marks)
Turn over to p.9
125.220 2002 Internal test
9
4. Consider a coupon bond that has a face value of $1,000, a yield of 12 percent, pays a
semiannual coupon payment of $50 and matures in two years. Calculate the value of
this bond.
(2 marks)
5. In relation to the futures market, define the terms (i) initial margin and (ii) contracts
being marked- to- market. (2 marks)
6. Explain the procedure for closing out a financial futures contract.
(2 marks)
7. Explain what happens to the cash flows or market values of the assets and liabilities of
a typical bank when interest rates decline? (3 marks)
125.220 2002 Internal test
10
8. Complete the following table to calculate the duration of a two-year bond with face
value of $1,000 coupon and current average market interest rates of 6% with
semiannual payments of 30. The formula is:
Total PV
PV(CF ) x t
=
CF /(1+i )
CF t /(1+i )
Du =
t
n
t=1
t
t
n
t=1
t
t
n
t=1
Σ
Σ
Σ ( )
Time
CP t
PV
t.PV
1
2
3
4
(4 marks)
9. A bank economist projects that interest rates in the future are expected to decline. In
relation to its GAP what is the bank’s proper funds management strategy? Why?
(3 marks)
10. If the Official Cash Rate (OCR) is 5.75%,
(a) Calculate what the Reserve Bank will pay on money deposited in settlement accounts
(b) Calculate what the Reserve Bank will provide on overnight cash (using repos)
125.220 2002 Internal test
11
(2 marks)
11. In relation to the US Federal Reserve, what is the policy directive?
(2 marks)
12. Discuss the actions and a couple of some possible outcomes if the New Zealand
Reserve Bank if it perceives that the rate of inflation is above the current target range.
(3 marks)
13. Discuss some of the possible effects of government borrowing?
(3 marks)
125.220 2002 Internal test
12
14. As per Topic 13 reading, discuss one of the principal channels where fiscal policy
affects monetary policy.
(3 marks)
15. What are the three tools of fiscal policy?
(3 marks)
16. The Reserve Bank’s monetary policy objectives include in part a target range for
inflation. What is the latest target range of inflation and who is the recently appointed
New Zealand Reserve Bank Governor?
(2 marks)
answer:1-20dcbee bcbcc bbced eccab
21-40 bcdbb cbbab cacdd cacee cbcaa

夜行记

老兄，我建议你还是示弱一下吧，这些资料都在125220的QQ群里！
呵呵 但是呢，还要谢谢你！
没准你这点东西就救了不少人呢，救一个，7级浮屠
                                                           救N 个 ， 7*N级浮屠
你发了！
最后： 13325788  这个为125220的群号码。 共享里面资料应该很全！

竹木春秋

虽然我也有这些资料，但是谢谢你，顶你下先！！！

跑

值得鼓励 我顶了先～～～～

WIN神

精神可嘉!再接再厉!争取把80年代的题也搞到手.哈哈.

fanncy

还是有很多校友需要的
大家共勉吧

couplecat

i think it is worth encouraging, after all, someone donnot enroll in the QQ group. so thank for ur work as above.