货币银行学092期末试卷(A卷)

江西财经大学

09－10学年第二学期期末考试试卷

试卷代码：12423A 授课课时：48课时

课程名称：货币银行学适用对象：国际学院学生

试卷命题人李静试卷审核人王耀德

Part I. This part has 20 Multiple Choice Questions and each one is worth 1 points. The total points for this part are 20 points. Please choose only one answer for each question.

1)Money supply models tend to focus on the monetary base rather than on reserves since

(a)Fed actions have no effect on reserves but have a predictable effect on the monetary base.

(b)Fed actions in general have little effect on reserves but have a predictable effect on the monetary

base.

(c)Fed actions have a more predictable effect on the monetary base.

(d)none of the above.

2)The price of a futures contract at the expiration date of the contract

(a)equals the price of the underlying asset.

(b)equals the price of the counterparty.

(c)equals the hedge position.

(d)equals the value of the hedged asset.

3)If the liquidity effect is larger than the other effects, an increase in money growth will

(a)lower interest rates.

(b)raise interest rates.

(c)cause interest rates to rise initially but then fall below the initial level.

(d)cause interest rates to fall initially but then rise above the initial level.

4)Deposit insurance

(a)attracts risk-prone entrepreneurs to the banking industry.

(b)encourages bank managers to take on greater risks than they otherwise would.

(c)reduces the incentives of depositor s to monitor the riskiness of their banks’ asset portfolios.

(d)does all of the above.

5)The _____ are the costs associated with deposit outflows, the _____ excess reserves banks will want to

hold.

(a)lower; more

(b)higher; less

(c)higher; more

(d)None of the above, since deposit outflows cannot be anticipated.

6)The formula linking the money supply to the monetary base is

(a)M＝m＋MB..

(b)M ＝m×MB.

(c)m ＝M ×MB.

(d)MB ＝M ×m.

7)If interest rates are expected to fall in the future, the demand for long-term bonds today _____ and the

demand curve shifts to the _____.

(a)rises; right

(b)rises; left

(c)falls; right

(d)falls; left

8)Money is defined as

(a)bills of exchange.

(b)anything that is generally accepted in payment for goods and services or in the repayment of

debt.

(c)a risk-free repository of spending power.

(d)the unrecognized liability of governments.

9)Federal reserve assets include

(a)government securities.

(b)bank reserves.

(c)currency in circulation.

(d)all of the above.

10) Using the one-period valuation model, assuming a year-end dividend of $0.50, an expected sales price of $50, and a required rate of return of 10%, the current price of the stock would be

(a)$50.50.

(b)$50.00.

(c)$45.91.

(d)$45.00.

11) If wealth decreases, the demand for common stocks _____ and that of long-term bonds _____.

(a)increases; increases

(b)increases; decreases

(c)decreases; decreases

(d)decreases; increases

12)The Fed uses three policy tools to manipulate the money supply: open market operations, which affect

the _____; changes in discount lending, which affect the _____ by influencing the quantity of discount loans; and changes in reserve requirements, which affect the _____.

(a)money multiplier; monetary base; monetary base

(b)monetary base; money multiplier; monetary base

(c)monetary base; monetary base; money multiplier

(d)money multiplier; money multiplier; monetary base

13)Which of the following statements are true?

a)A bank’s assets are its sources of funds.

b)A bank’s liabilities are its uses of funds.

c)A bank’s balance s heet shows that total assets equal total liabilities plus equity capital.

d)Each of the above.

14)The objectives of the Federal Reserve in its conduct of monetary policy include

a)economic growth.

b)price stability.

c)high employment.

d)all of the above.

15)Which of the following is not one of the eight basic puzzles about financial structure?

a)The financial system is among the most heavily regulated sectors of the economy.

b)Issuing marketable securities is the primary way businesses finance their operations.

c)Indirect finance, which involves the activities of financial intermediaries, is many times more

important than direct finance, in which businesses raise funds directly from lenders in financial

markets.

d)Banks are the most important source of external funds to finance businesses.

16)Because it is a medium of exchange, money

a）discourages specialization and the division of labor.

b) reduces transaction costs.

c)is not allowed to earn interest.

d)does only (b) and (c) of the above.

17)Which of the following long-term bonds currently has the lowest interest rate?

a)Corporate Aaa bonds

b)U.S. Treasury bonds

c)Corporate Aa bonds

d)Corporate Baa bonds

18)Holding the expected return on bonds constant, an increase in the expected return on common stocks

would _____ the demand for bonds, shifting the demand curve to the _____.

a)decrease; left

b)decrease; right

c)increase; left

d)increase; right

19)If a security pays $110 next year and $121 the year after that, what is its yield to maturity if it sells for

$200?

a)9 percent

b)10 percent

c)11 percent

d)12 percent

20)Disadvantages of using reserve requirements to control the money supply and interest rates include

a)their overly-powerful impact on the money supply.

b)creating potential lending problems for banks with high levels of excess reserves.

c)their overly-powerful impact on reserves and the monetary base.

d)all of the above.

PartⅡ. This part has 10 True of False Questions and each one is worth 1 points. The total points for

this part are 10 points.

1 If reserve requirement were elimininated, it would be harder to control interest rates.

2 The basic activity of banks is to accept deposits and make loans.

3 As a medium of exchange is what distinguishes money from other assets.

4 When the coupon bond is priced at its face value, the yield to maturity equals the coupon rate.

5 If bonds of different maturities are close substitutes, their interest rates are more likely to move together.

6 An efficient market is one in which no one ever profits from having better information than the rest.

7 The income effect of an increase in the money supply is a decrease in interest rates in response

to the higher level of income.

8 Stocks are not the most important source of external financial for businesses.

9 A bank maintains bank capital to lessen the chance that it will become insolvent.

10 If the demand for money did not fluctuate, the Fed could pursue both a money supply target and an

interest-rate target at the same time.

PartⅢ. This part has 4 Key Terms Questions and each one is worth 2.5 points. The total points for this part are 10 points. Please explain briefly for each key term.

1 Discount window

2 Money Multiplier

3 Term structure of interest rates

4 Liquidity

PartⅣ. This part has 5 Essay Questions and each one is worth 12 points. The total points for this part are 60 points. ( Please write down your answers as clearly as possible. If I can’t read your

hand-writing, I never assume your answers are right )

1Explain the complete formula for the money supply, and explain how changes in required reserves,

excess reserves, the currency ratio, the nonborrowed base, and discount borrowing affect the money supply.

2Why has the development of overnight loan markets made it more likely that banks will hold fewer excess reserves?

3Assume that no banks hold excess reserves, and the public holds no currency. If a bank sells a $100 security to the Fed, show, using T-accounts, what happens to this bank and two additional steps in the deposit expansion process, assuming a 10% reserve requirement. How much do deposits and loans increase for the banking system when the process is completed?

4During President Reagan’s administration, his supporters argued that higher real interest r ates were the result of policies increasing the profitability of investment. Reagan’s critics argued that the high interest rates were the result of high budget deficits. Demonstrate graphically and explain how increased

profitability of investments and increased deficits affect bond prices and interest rates. Based on your graphs, is there merit to either viewpoint?

5If over the next five years, the interest rates on 1-year bonds are expected to be 5, 7, 7, 6, and 5 percent, and the liquidity premium for five-year bonds is 1 percent. According to the expectations theory of the term structure, what is the rate on five-year bonds? According to the liquidity premium theory, what is the rate on five-year bonds? Explain the difference between the two answers.