This test bank includes a series of multiple-choice questions that are aligned with the content of Chapter 03 from Money, Banking, and Financial Markets (5th Edition) by Cecchetti. It covers key topics such as financial instruments, financial markets, and the role of financial institutions. Each question includes the correct answer, difficulty rating, learning objectives, and Bloom’s taxonomy level to help guide your exam preparation effectively.
Sample Questions from Chapter 03 – Financial Instruments, Financial Markets, and Financial Institutions:
- What is the role of a financial intermediary?
- a. It guarantees a loan.
- b. It serves as a link between borrowers and lenders, facilitating the transaction.
- c. It is a part of direct finance.
- d. It is a deposit-only institution.
Answer: B
Difficulty: Easy
Learning Objective: 03-01
Bloom’s Level: Remember
Topic: Financial Instruments
- How do most individuals obtain loans?
- a. Without using any financial intermediary.
- b. By working with a financial intermediary, which helps reduce borrowing costs.
- c. They borrow through a financial intermediary, although they might save money by borrowing directly.
- d. By relying on credit cards and avoiding intermediaries.
Answer: B
Difficulty: Easy
Learning Objective: 03-01
Bloom’s Level: Remember
Topic: Financial Instruments
- Tom takes a car loan from Old Town Bank:
- a. The loan is Tom’s asset, and it is a liability for the bank.
- b. The loan is Tom’s asset, but the bank holds the liability through its depositors.
- c. The car loan is Tom’s debt and an asset for Old Town Bank.
- d. The car loan is a liability for both Tom and the bank until the loan is repaid.
Answer: C
Difficulty: Medium
Learning Objective: 03-01
Bloom’s Level: Understand
Topic: Financial Instruments
This test bank covers additional questions related to financial instruments, markets, and institutions, providing a complete resource for students studying money, banking, and financial markets.
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