Course No:BUS2317
Course Title: Money Banking and
Financial Market
Date: 24/3/2014
No. Of Questions: (4)
Time: 1hours
University of Palestine
Midterm Exam
2014/2013
Total Grade: 20
Instructor Name: Abedelazez Safi
Student No.: _________________
Student Name: _______________
College Name: _______________
Dep. / Specialist: ______________
Using Dictionary (No)
1st Question: Choose the Correct Answer From The Following Choices
1. Financial markets promote greater economic efficiency by channeling funds from ________
to ________.
A) investors; savers B) borrowers; savers C) savers; borrowers D) savers;
lenders
2. A key factor in producing high economic growth is
A) eliminating foreign trade. B) well-functioning financial markets. C) high
interest rates.
D) stock market volatility.
3. Markets in which funds are transferred from those who have excess funds available to those
who have a shortage of available funds are called
A) commodity markets. B) fund-available markets. C) derivative exchange markets. D)
financial markets.
6. The difference between money and income is that
A) money is a flow and income is a stock. B) money is a stock and income is a flow.
C) there is no difference money and income are both stocks. D) there is no
difference money and income are both flows.
7. The bond markets are important because they are
A) easily the most widely followed financial markets in the United States. B) the markets
where foreign exchange rates are determined.
C) the markets where interest rates are determined. D) the markets where all borrowers get
their funds.
8. Stock prices are
A) relatively stable trending upward at a steady pace. B) relatively stable trending
downward at a moderate rate.
C) extremely volatile. D) unstable trending downward at a moderate rate.
9. When stock prices fall
A) an individualʹs wealth is not affected nor is their willingness to spend.
B) a business firm will be more likely to sell stock to finance investment spending. C) an
individualʹs wealth may decrease but their willingness to spend is not affected. D) an
individualʹs wealth may decrease and their willingness to spend may decrease.
10. Fear of a major recession causes stock prices to fall, everything else held constant, which in
turn causes consumer spending to
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Course No:BUS2317
Course Title: Money Banking and
Financial Market
Date: 24/3/2014
No. Of Questions: (4)
Time: 1hours
University of Palestine
Midterm Exam
2014/2013
Total Grade: 20
Instructor Name: Abedelazez Safi
Student No.: _________________
Student Name: _______________
College Name: _______________
Dep. / Specialist: ______________
Using Dictionary (No)
A) increase. B) remain unchanged.
C) decrease. D) cannot be determined.
11. Financial institutions search for ________ has resulted in many financial innovations.
A) higher profits B) regulations
C) respect D) higher risk
12. Financial institutions that accept deposits and make loans are called ________.
A) exchanges B) banks
C) over-the-counter markets D) finance companies
13. The upward and downward movement of aggregate output produced in the economy is
referred to as the ________.
A) roller coaster B) see saw
C) business cycle D) shock wave
14. ________ theory relates changes in the quantity of money to changes in aggregate economic
activity and the price level.
A) Monetary B) Fiscal
C) Financial D) Systemic
15. The market where one currency is converted into another currency is called the ________
market.
A) stock B) bond
C) derivatives D) foreign exchange
16. Securities are ________ for the person who buys them, but are ________ for the individual
or firm that issues them.
A) assets; liabilities B) liabilities; assets
C) negotiable; nonnegotiable D) nonnegotiable; negotiable
17. The higher a securityʹs price in the secondary market the ________ funds a firm can raise by
selling securities in the ________ market.
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Course No:BUS2317
Course Title: Money Banking and
Financial Market
Date: 24/3/2014
No. Of Questions: (4)
Time: 1hours
University of Palestine
Midterm Exam
2014/2013
Total Grade: 20
Instructor Name: Abedelazez Safi
Student No.: _________________
Student Name: _______________
College Name: _______________
Dep. / Specialist: ______________
Using Dictionary (No)
A) more; primary B) more; secondary
C) less; primary D) less; secondary
18. U.S. dollar deposits in foreign banks outside the U.S. or in foreign branches of U.S. banks
are called ________.
A) Atlantic dollars B) Eurodollars
C) foreign dollars D) outside dollars
19. Which of the following is not included in the M1 measure of money but is included in the
M2 measure of money?
A) Currency B) Travelerʹs checks
C) Demand deposits D) Small-denomination time deposits
20. If a security pays $55 in one year and $133 in three years, its present value is $150 if the
interest rate is
A) 5 percent. B) 10 percent.
C) 12.5 percent. D) 15 percent.
2nd Question: Defined the Following Concept
1. Foreign Bond:
2. Interest rate:
3. Stock Market:
4. Foreign Exchange rate:
5. Monetary Theory:
3rd Question: Mention and Describe the Right Answer of the Following Question.
1) Mention reason why it is important the regulations in Financial Market?
3/4
Course No:BUS2317
Course Title: Money Banking and
Financial Market
Date: 24/3/2014
No. Of Questions: (4)
Time: 1hours
University of Palestine
Midterm Exam
2014/2013
Total Grade: 20
Instructor Name: Abedelazez Safi
Student No.: _________________
Student Name: _______________
College Name: _______________
Dep. / Specialist: ______________
Using Dictionary (No)
2) Distinguish between a foreign bond and a Eurobond?
3) Distinguish between direct finance and indirect finance. Which of these is the most
important source of funds for corporations in the United States?
4) There is an imbalance of information in a lending situation; we must deal with the
problems of adverse selection and moral hazard. Define these terms and explain how
financial intermediaries can reduce these problems.
5) Explanation Briefly about the growth of Internationalization of Financial Markets?
End of Questions
Good Luck
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