Posted: January 2nd, 2017

As chief financial officer you sell newly issued bonds on behalf of your firm. Your firm is

Question Question Points 1. As chief financial officer you sell newly issued bonds on behalf of your firm. Your firm is: a. borrowing indirectly. b. borrowing directly. c. lending directly. d. lending indirectly. 2. In which of the following instances is the present value of the future payment the largest? a. You will receive $1,000 in 5 years and the annual interest rate is 5 percent. b. You will receive $1,000 in 10 years and the annual interest rate is 3 percent. c. You will receive $2,000 in 10 years and the annual interest rate is 10 percent. d. You will receive $2,400 in 15 years and the annual interest rate is 8 percent. 3. Advocates of unions contend that unions are a necessary antidote to the market power of the firms that hire workers and that they are important for helping firms respond efficiently to workers’ concerns. a. True b. False 1 4. Structural unemployment results when the number of jobs is insufficient for the number of workers. a. True b. False 5. Which of the following is an example of financial intermediation? a. Susan buys shares of stock issued by a fast food company. b. A foreign government buys bonds issued by the U.S. Treasury. c. John makes a deposit at a bank and the bank uses this money to make an auto loan to Luke. d. None of the choices apply. 6. Fortunade Corporation stock has a price of $100 per share, a dividend of $1.60 per share, and retained earnings of $2.00 per share. The dividend yield on this stock is: a. 2.8 percent. b. 2.0 percent. c. 1.6 percent. d. 0.4 percent. 7. More generous unemployment insurance would: a. raise structural unemployment. b. raise frictional unemployment. c. lower structural unemployment. d. lower frictional unemployment. 8. Which of the following is the correct expression for finding the present value of a $500 payment two years from today if the interest rate is 4 percent? a. $500/(1.04)2 b. $500 – 500(1.04)2 c. $500 – $500/(.04)2 d. None of the choices apply. 9. A shift of the demand curve from D1 to D2 is called: a. an increase in the demand for loanable funds, and that increase would originate from people who had some extra income they wanted to lend. b. an increase in the demand for loanable funds, and that increase would originate from households and firms who wish to borrow to make investments. c. a decrease in the demand for loanable funds, and that decrease would originate from people who had some extra income they wanted to lend. d. a decrease in the demand for loanable funds, and that decrease would originate from households and firms who wish to borrow to make investments.