MGT 411 Money & Banking - 1

5 Questions | Total Attempts: 454

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MGT Quizzes & Trivia

Money & Banking


Questions and Answers
  • 1. 
    A lender is promised a $100 payment (including interest) one year from today. If thelender has an 8% opportunity cost of money, he should be willing to accept what amounttoday?
    • A. 

      $100.00

    • B. 

      $108.20

    • C. 

      $92.59

    • D. 

      $96.40

  • 2. 
    The higher the Future Value (FV) of the payment, the higher will be the:
    • A. 

      Discount rate

    • B. 

      Present value

    • C. 

      Liquidity

    • D. 

      Cost of borrowing

  • 3. 
    The procedure of finding out the Present Value (PV) is known as
    • A. 

      Discounting

    • B. 

      Compounding

    • C. 

      Time value of money

    • D. 

      Bond pricing

  • 4. 
    Money appears to have a major influence on
    • A. 

      Inflation.

    • B. 

      Interest rates.

    • C. 

      The business cycle.

    • D. 

      Each of the above

  • 5. 
    Budget deficits are important to study in a money and banking class because
    • A. 

      . budget deficits cause banks to fail

    • B. 

      Without budget deficits banks would not exist.

    • C. 

      Budget deficits may influence the conduct of monetary policy.

    • D. 

      Of each of the above.

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