Economist James Tobin developed a formal model that justifies holding ________, and it goes some way in explaining variations in the demand for ________
A) only safe assets or only risky assets, M1
B) only safe assets or only risky assets, M2
C) a mix of safe and risky assets, M1
D) a mix of safe and risky assets, M2
D
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When investment banks buy or sell securities on their own account, it's called
A) financial engineering. B) proprietary trading. C) underwriting. D) factoring.
In a competition of financial analysts vs. throwing a dart to choose stocks, according Burton Malkiel, financial analysts came out ahead due to all of the following reasons EXCEPT:
A) it considered only stock prices, not dividends B) investors that followed the contest were influenced to purchase the stocks recommended by the analysts C) failure of the Efficient Markets Hypothesis D) part of the return for the analysts resulted from compensation for the higher risk of the stocks chosen
The largest source of federal revenue in the United States is:
a. Social insurance tax b. the corporate income tax c. the individual income tax d. Foreign aid to the U.S.
An individual deposits $12,000 in a commercial bank. The bank is required to hold 10 percent of all deposits on reserve at the regional Federal Reserve Bank. The deposit increases the loan capacity of the bank by:
A. $9,600. B. $11,000. C. $6,000. D. $10,800.