2/6/2020 Practice Quiz M3 (Ungraded)

My courses ▶ (20/01) MScFE 560 Financial Markets (C20-S1)

▶ Module 3: Interest and Money Markets ▶ Practice Quiz M3 (Ungraded)

Started on Thursday, 6 February 2020, 5:26 PM

State Finished
Completed on Thursday, 6 February 2020, 5:36 PM
Time taken 9 mins 49 secs

Question 1

Complete

Not graded

Consider the following statements:

Statement A: The difference between the par value and the price is a
compensation for the possibility of default.
Statement B: Buying a certi cate of deposit is synonymous with lending
money.

Which of the statements given above is correct?

Select one:
Only statement A
Only statement B

Both statement A and B

Neither statement A nor B

Your answer is correct.

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2/6/2020 Practice Quiz M3 (Ungraded)

Question 2

Complete

Not graded

What is the Annual Effective Interest Rate (EAR) if the Annual Percentage Rate
(APR) is 5% and compounding is quarterly?

Select one:
Slightly below 5.09%
Slightly above 5.09%

Under 5.00%
Over 5.25%

Your answer is correct.

Question 3

Complete
Not graded

Suppose you deposit money in a certi cate of deposit (CD) at a bank. Which of the
following statements is TRUE?

Select one:
The bank is borrowing money from you without a promise to repay that
money with some interest.
The bank is lending money to you, but not borrowing money from you.
The bank is technically renting money from you with a promise to repay
that money with interest.

The bank is lending money to you with a promise to repay that money with
some interest.

Your answer is correct.

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2/6/2020 Practice Quiz M3 (Ungraded)

Question 4

Complete

Not graded

Consider the following statements:

Statement A: To compensate an investor for default risk, a corporate-issued

note pays out more than its par value.
Statement B: For the money markets to function, many generous lenders
are required.

Which of the statements given above is correct?

Select one:
Only statement B
Both statement A and B

Only statement A
Neither statement A nor B

Your answer is correct.

Question 5

Complete
Not graded

Consider the following statements:

Statement A: Depositing money is essentially equivalent to lending money.

Statement B: A repurchase agreement is essentially an unsecured loan.

Which of the statements given above is correct?

Select one:
Only statement B
Only statement A

Neither statement A nor B

Both statement A and B

Your answer is correct.

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2/6/2020 Practice Quiz M3 (Ungraded)

◄ Notes 4 M3
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Live Session M3 ►

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