|Name: _________________________||Period: ___________________|
This test consists of 15 multiple choice questions and 5 short answer questions.
Multiple Choice Questions
1. What is an economic model of price determination in a market that concludes that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers will equal the quantity supplied by producers?
(a) Money market.
(b) Adverse selection.
(c) Floating exchange rate.
(d) Supply and demand.
2. In finance, what is a debt security in which the authorized issuer owes the holders a debt and, depending on the terms, is obliged to pay interest to use and/or to repay the principal at a later date?
3. According to the author, insurance companies want to save money while doctors want to help patients and avoid what?
(a) Losing their medical license.
(b) Unnecessary fatalities.
(c) Getting sued.
(d) Spreading diseases.
4. According to the author, the Hope Scholarships were a plan wherein students could borrow money for college and pay back their loans after they graduated using what?
(a) A percentage of their annual income.
(b) Government bonds.
(c) Interest free payments.
(d) Regular debit payments.
5. What represents the original capital paid into or invested in the business by its founders?
(c) Pork barrel.
6. What is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets?
7. Gary Becker figured that the stock of skills, education, training and an individual's health constitutes about what percent of a modern economy's wealth?
8. According to the author in Chapter 3, it's up to whom to consider the broad social consequences of decisions In a market economy?
(a) The government.
(c) Religious institutions.
(d) Nonprofit organizations.
9. What is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities?
(a) Index fund.
(b) Foreign Exchange Market.
(c) Mutual fund.
(d) Asset allocation.
10. Burton G. Malkiel is an American economist, most famous for what classic finance book?
(a) A Random Walk Down Wall Street.
(b) The Millionaire Next Door: The Surprising Secrets of America's Wealthy.
(c) The Wall Street MBA: Your Personal Crash Course in Corporate Finance.
(d) Extreme Money: Masters of the Universe and the Cult of Risk.
11. According to the author in Chapter 7, the basic set of rules and investor should follow is to do what?
(a) Research, invest, watch.
(b) Invest, watch, sell.
(c) Save, invest, and repeat.
(d) Research, fact check, invest.
12. Who introduced the Hope credit?
(a) John F. Kennedy.
(b) Ronald Reagan.
(c) George W. Bush.
(d) Bill Clinton.
13. In an insurance policy, what is the amount of expenses that must be paid out of pocket before an insurer will pay any expenses?
14. What is an investment strategy that attempts to balance risk versus reward by adjusting the percentage of each asset in an investment portfolio according to the investors risk tolerance, goals and investment time frame?
(a) Adverse selection.
(b) Money market.
(c) Asset allocation.
(d) Futures contract.
15. According to the author, there are two lessons to be learned from a monopoly situation. What is the first?
(a) Governments should provide more services.
(b) Government shouldn't provide any service that could be covered by the private sector.
(c) Governments should maintain the financial infrastructure more.
(d) Government shouldn't actually do the work of maintaining infrastructure.
Short Answer Questions
1. When did Ross Perot found Electronic Data Systems?
2. In economics and sociology, what refers to any factor that enables or motivates a particular course of action or counts as a reason for preferring one choice to the alternatives?
3. What term was first used in the early 1990s to denote an organization's reputation as an employer?
4. According to the author, financial markets boil down to four basic simple needs. What is the first discussed in Chapter 7?
5. What refers to reasoning which constructs or evaluates deductive arguments?
This section contains 649 words
(approx. 3 pages at 300 words per page)