the economics of money, banking, and financial markets

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35!

© 2014 Pearson Canada Inc.!

5. 
   

   If the maturity of a debt instrument is less than one year, the debt is called ____.
   A) short-term
   B) intermediate-term
   C) long-term
   D) prima-term
   Answer: A
   Diff: 1 Type: MC Page Ref: 20
   Skill: Recall
   Objective List: 2.2 Explain why financial markets are classified as debt and equity markets etc.

   
   


6. 
   

   Long-term debt has a maturity that is ____.
   A) between one and ten years
   B) less than a year
   C) between five and ten years
   D) ten years or longer
   Answer: D
   Diff: 1 Type: MC Page Ref: 20
   Skill: Recall
   Objective List: 2.2 Explain why financial markets are classified as debt and equity markets etc.

   
   


7. 
   

   When I purchase ____, I own a portion of a firm and have the right to vote on issues
   important to the firm and to elect its directors.
   A) bonds
   B) bills
   C) notes
   D) stock
   Answer: D
   Diff: 1 Type: MC Page Ref: 20
   Skill: Applied
   Objective List: 2.2 Explain why financial markets are classified as debt and equity markets etc.

   
   


8. 
   

   Which of the following benefit directly from any increase in the corporation's profitability?
   A) A bond holder
   B) A commercial paper holder
   C) A shareholder
   D) A T-bill holder
   Answer: C
   Diff: 2 Type: MC Page Ref: 20
   Skill: Recall
   Objective List: 2.2 Explain why financial markets are classified as debt and equity markets etc.