a. Federal Reserve Bank b. Department of the Treasury c. Internal Revenue Servic

Question

a.       Federal Reserve Bank

b.      Department of the Treasury

c.       Internal Revenue Service

d.      Securities and Exchange Commission

a.       Permanence

b.      Flexibility

c.       Limited Liability

d.      Pass Through Income and Loss for Tax Purposes

                         I.            A car lease is an example of an annuity due

                      II.            A car loan is an example of an ordinary annuity

a.       Only I is true

b.      Only II is true

c.       Both I and II are true

d.      Neither I nor II are true

a.       An index of all bonds sold in the United States

b.      A measure of the excess yield over Treasuries that is required from a corporate bond

c.       A graphic representation showing the relationship of interest rates for different maturities, usually with respect to Treasury bills, notes, and bonds

d.      A graphic projection estimating the production all goods and services in the United States at various interest rate levels?

a.       Interest rates spiking 2 points

b.      The dollar strengthening against the euro

c.       A company increasing its Debt Equity Ratio

d.      Increased volatility in the S&P 500 Index

Explanation / Answer

1) d) Securities and exchange commision

Reason: primary regulator in US is Securities and exchange commision

12) a)Permanence

Reason: there is no permenance in limited liability

13) c) both I and II are true

Reason: Both are true as in carlease payment is started at t=0 and for loan at t=1

14)c) A graphic representation showing the relationship of interest rates for different maturities, usually with respect to Treasury bills, notes, and bonds

Reason: Yield curve is graph of yield vs maturity (or time)

15)c)A company increasing its Debt Equity Ratio

Reason: it is company specific or un systematic risk

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