Which of the following provides ownership in the
Berto wants to invest in a company but he also wants some amount of control of the operations. Why would Berto choose common stocks?
What is the name of the organization within the Federal Reserve Bank that sets the Federal Funds Rate?
How is the Federal Funds Rate used?
Two types of bonds that were designed to eliminate reinvestment rate risk are:
The primary reason to use financial futures contracts in hedging strategies is:
Which of the following is the best explanation of the real interest rate?
What does the real interest rate tell you?
What happens when there is an increase in the demand for money when the supply of money is unchanged?
When interest rates are 20%, the demand for money is:
Steve is trying to earn $300 in interest for a new guitar. He puts $2500 in an account that earns 2% interest. How long will it take to earn $300?
As she enters college, Amy puts $500 in a savings account that earns 3.5% simple interest. At the end of 4 years, how much will be in the account?
Which statement BEST summarizes the history of interest rates?
Which of the following is NOT a factor in the determination of an interest rate on borrowed money?
The Fed's monetary policy has the greatest effect on real Gross Domestic Product under what set of conditions?
How would economists graphically illustrate a decrease in the money supply?
Which of the following is FALSE regarding real interest rates?
In the country of Athenia, banks charge 10% interest on all loans. If the general price level has been increasing at a rate of 2% per year, what is the real rate of interest in Athenia?
Which is true about the segmented markets theory?
Which of the statements is correct about the expectations theory to the term structure of interest rates?
If you take out a loan for $50,000 with a maturity date of 5 years and will pay $10,000 in interest, what is the annual nominal interest rate?
What's the formula for a lender to set it's nominal interest rate?
Which of the following accurately describes the discount rate?
Which of the following statements is FALSE regarding the discount rate?
Which of the following is a sign that there is something wrong with the economy?
What kinds of loans are associated with a short-term interest rate?
How is real interest calculated?
What is the current
target Federal Funds Rate?
Two strategies for mitigating interest rate risk that don't depend on the types of bonds purchased are:
You loan a friend $10,000 at a 5% rate of interest for one year. Inflation for the year is 3%. What's the real rate of interest?
Interest Rates, Rate Changes, & Risk Structure Chapter Exam Instructions
Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come
to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will
Click it to see your results. Good luck!