Data Management for Business Question Bank
Course Introduction
Data Management for Business introduces students to the principles and practices of organizing, storing, and utilizing data within a business context. The course explores topics such as database design, data modeling, data quality, and data governance, equipping students with foundational skills in using relational databases and data management tools. Emphasis is placed on the strategic value of data in supporting business decision-making, improving operational efficiency, and maintaining regulatory compliance. By engaging in hands-on activities and real-world case studies, students learn how to design, implement, and maintain effective data management solutions that address contemporary business challenges.
Recommended Textbook Management Information Systems Managing the Digital Firm 6th Canadian Edition by Kenneth
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Chapter 1: Why Study Money, banking, and Financial Markets
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108 Flashcards
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Sample Questions
Q1) A share of common stock is a claim on a corporation's A)debt.
B)liabilities.
C)expenses.
D)earnings and assets.
Answer: D
Q2) Nominal GDP is output measured in ________ prices while real GDP is output measured in ________ prices.
A)current;current
B)current;fixed
C)fixed;fixed
D)fixed;current
Answer: B
Q3) If real GDP grows from $10 trillion in 2002 to $10.5 trillion in 2003,the growth rate for real GDP is
A)5%.
B)10%.
C)50%.
D)0.5%.
Answer: A
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Chapter 2: An Overview of the Financial System
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Sample Questions
Q1) Describe the two methods of organizing a secondary market.
Answer: A secondary market can be organized as an exchange where buyers and sellers meet in one central location to conduct trades.An example of an exchange is the New York Stock Exchange.A secondary market can also be organized as an over-the-counter market.In this type of market,dealers in different locations buy and sell securities to anyone who comes to them and is willing to accept their prices.An example of an over-the-counter market is the federal funds market.
Q2) 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
Q3) Distinguish between a foreign bond and a Eurobond.
Answer: A foreign bond is sold in a foreign country and priced in that country's currency.A Eurobond is sold in a foreign country and priced in a currency that is not that country's currency.
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Chapter 3: What Is Money
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Sample Questions
Q1) If an individual moves money from a money market deposit account to currency
A)M1 increases and M2 stays the same.
B)M1 stays the same and M2 increases.
C)M1 stays the same and M2 stays the same.
D)M1 increases and M2 decreases.
Answer: A
Q2) Small-denomination time deposits refer to certificates of deposit with a denomination of less than
A)$1,000.
B)$10,000.
C)$100,000.
D)$1,000,000.
Answer: C
Q3) When economists say that money promotes ________,they mean that money encourages specialization and the division of labor.
A)bargaining
B)contracting
C)efficiency
D)greed
Answer: C
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Chapter 4: The Meaning of Interest Rates
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Sample Questions
Q1) What is the return on a 5 percent coupon bond that initially sells for $1,000 and sells for $1,200 next year?
A)5 percent
B)10 percent
C)-5 percent
D)25 percent
Q2) If the interest rates on all bonds rise from 5 to 6 percent over the course of the year,which bond would you prefer to have been holding?
A)a bond with one year to maturity
B)a bond with five years to maturity
C)a bond with ten years to maturity
D)a bond with twenty years to maturity
Q3) Would it make sense to buy a house when mortgage rates are 14% and expected inflation is 15%? Explain your answer.
Q4) Which of the following are TRUE for discount bonds?
A)A discount bond is bought at par.
B)The purchaser receives the face value of the bond at the maturity date.
C)U.S.Treasury bonds and notes are examples of discount bonds.
D)The purchaser receives the par value at maturity plus any capital gains.
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Chapter 5: The Behavior of Interest Rates
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Sample
Questions
Q1) When the Fed ________ the money stock,the money supply curve shifts to the ________ and the interest rate ________,everything else held constant.
A)decreases;right;rises B)increases;right;falls C)decreases;left;falls D)increases;left;rises
Q2) Discovery of new gold in Alaska will ________ the ________ of gold,________ its price,everything else held constant.
A)increase;demand;increasing B)decrease;demand;decreasing C)decrease;supply;increasing D)increase;supply;decreasing
Q3) The economist Irving Fisher,after whom the Fisher effect is named,explained why interest rates ________ as the expected rate of inflation ________,everything else held constant.
A)rise;increases B)rise;stabilizes C)fall;stabilizes D)fall;increases
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Chapter 6: The Risk and Term Structure of Interest Rates
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Sample Questions
Q1) During the Great Depression years 1930-1933 there was a very high rate of business failures and defaults,we would expect the risk premium for ________ bonds to be very high.
A)U.S.Treasury
B)corporate Aaa
C)municipal
D)corporate Baa
Q2) If the federal government where to raise the income tax rates,would this have any impact on a state's cost of borrowing funds? Explain.
Q3) If 1-year interest rates for the next five years are expected to be 4,2,5,4,and 5 percent,and the 5-year term premium is 1 percent,than the 5-year bond rate will be A)2 percent.
B)3 percent.
C)4 percent.
D)5 percent.
Q4) If a higher inflation is expected,what would you expect to happen to the shape of the yield curve? Why?
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Chapter 7: The Stock Market, the Theory of Rational
Expectations,
and the Efficient Market Hypothesis
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Q1) ________ and ________ may provide an explanation for stock market bubbles.
A)Overconfidence;social contagion
B)Underconfidence;social contagion
C)Overconfidence;social isolationism
D)Underconfidence;social isolationism
Q2) Using the Gordon growth model,if D1 is $.50,ke is 7%,and g is 5%,then the present value of the stock is
A)$2.50.
B)$25.
C)$50.
D)$46.73.
Q3) The efficient markets hypothesis predicts that stock prices follow a "random walk." The implication of this hypothesis for investing in stocks is
A)a "churning strategy" of buying and selling often to catch market swings.
B)turning over your stock portfolio each month,selecting stocks by throwing darts at the stock page.
C)a "buy and hold strategy" of holding stocks to avoid brokerage commissions.
D)following the advice of technical analysts.
Q4) What rights does ownership interest give stockholders?
Page 9
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Chapter 8: An Economic Analysis of Financial Structure
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Sample Questions
Q1) Adverse selection is a problem associated with equity and debt contracts arising from
A)the lender's relative lack of information about the borrower's potential returns and risks of his investment activities.
B)the lender's inability to legally require sufficient collateral to cover a 100% loss if the borrower defaults.
C)the borrower's lack of incentive to seek a loan for highly risky investments.
D)the lender's inability to restrict the borrower from changing his behavior once given a loan.
Q2) American businesses get their external funds primarily from A)bank loans.
B)bonds and commercial paper issues.
C)stock issues.
D)loans from nonbank financial intermediaries.
Q3) Why does the free-rider problem occur in the debt market?
Q4) How does a mutual fund lower transactions costs through economies of scale?
Q5) Explain the principal-agent problem as it pertains to equity contracts.
Q6) How does collateral help to reduce the adverse selection problem in credit market?
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Chapter 9: Banking and the Management of Financial
Institutions
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Sample Questions
Q1) When a lender refuses to make a loan,although borrowers are willing to pay the stated interest rate or even a higher rate,the bank is said to engage in
A)coercive bargaining.
B)strategic holding out.
C)credit rationing.
D)collusive behavior.
Q2) Which of the following is NOT a source of borrowings for a bank?
A)federal funds
B)Eurodollars
C)transaction deposits
D)discount loans
Q3) Collateral requirements lessen the consequences of ________ because the collateral reduces the lender's losses in the case of a loan default and it reduces ________ because the borrower has more to lose from a default.
A)adverse selection;moral hazard
B)moral hazard;adverse selection
C)adverse selection;diversification
D)diversification;moral hazard
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Chapter 10: Economic Analysis of Financial Regulation
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Sample Questions
Q1) The current supervisory practice toward risk management
A)focuses on the quality of a bank's balance sheet.
B)determines whether capital requirements have been met.
C)evaluates the soundness of a bank's risk-management process.
D)focuses on eliminating all risk.
Q2) A system of deposit insurance
A)attracts risk-taking entrepreneurs into the banking industry.
B)encourages bank managers to decrease risk.
C)increases the incentives of depositors to monitor the riskiness of their bank's asset portfolio.
D)increases the likelihood of bank runs.
Q3) Prior to the 1980s,S&Ls and mutual savings banks were restricted almost entirely to A)commercial real estate loans.
B)home mortgages.
C)education loans.
D)vacation loans.
Q4) How did the increase in the interest rates in the early 80s contribute to the S&L crisis?
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Chapter 11: Banking Industry: Structure and Competition
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Sample Questions
Q1) According to Edward Kane,because the banking industry is one of the most ________ industries in America,it is an industry in which ________ is especially likely to occur.
A)competitive;loophole mining
B)competitive;innovation
C)regulated;loophole mining
D)regulated;innovation
Q2) The U.S.banking system is considered to be a dual system because
A)banks offer both checking and savings accounts.
B)it actually includes both banks and thrift institutions.
C)it is regulated by both state and federal governments.
D)it was established before the Civil War,requiring separate regulatory bodies for the North and South.
Q3) Critics of nationwide banking fear
A)an elimination of community banks.
B)increased lending to small businesses.
C)cutthroat competition.
D)banks with economies of scale problems.
Q4) What financial innovations helped banks to get around the bank branching restrictions of the McFadden Act?
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Chapter 12: Financial Crises
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Sample Questions
Q1) The Volcker Rule addresses the off-balance-sheet problem involving A)trading risks.
B)selling loans.
C)loan guarantees.
D)interest rate risks.
Q2) Typically,the economy recovers fairly quickly from a recession.Why did this NOT happen in the United States during the Great Depression?
Q3) Although the subprime mortgage market problem began in the United States,the first indication of the seriousness of the crisis began in A)Europe.
B)Australia.
C)China.
D)South America.
Q4) Microprudential supervision focuses on the safety and soundness of A)individual financial institutions.
B)the financial system as a whole.
C)the shadow banking system.
D)government credit agencies.
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Chapter 13: Central Banks and the Federal Reserve System
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Sample Questions
Q1) The majority of members of the Federal Open Market Committee are
A)Federal Reserve Bank presidents.
B)members of the Federal Advisory Council.
C)presidents of member banks.
D)the seven members of the Board of Governors.
Q2) The theory of bureaucratic behavior when applied to the Fed helps to explain why the Fed
A)was supportive of congressional attempts to limit the central bank's autonomy.
B)was so secretive about the conduct of future monetary policy.
C)sought less control over banks in the 1980s.
D)was willing to take on powerful groups that may threaten its autonomy.
Q3) The First Bank of the United States
A)was disbanded in 1811 when its charter was not renewed.
B)had its charter renewal vetoed in 1832.
C)was fundamental in helping the Federal Government finance the War of 1812.
D)None of the above.
Q4) Explain two concepts of central bank independence.Is the Fed politically independent? Why do economists think central bank independence is important?
Q5) Make the case for and against an independent Federal Reserve.
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Chapter 14: The Money Supply Process
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Sample Questions
Q1) The volume of loans that the Fed makes to banks is affected by the Fed's setting of the interest rate on these loans,called the
A)federal funds rate.
B)prime rate.
C)discount rate.
D)interbank rate.
Q2) The government agency that oversees the banking system and is responsible for the conduct of monetary policy in the United States is
A)the Federal Reserve System.
B)the United States Treasury.
C)the U.S.Gold Commission.
D)the House of Representatives.
Q3) Assume that no banks hold excess reserves,and the public holds no currency.If a bank sells a $100 security to the Fed,explain what happens to this bank and two additional steps in the deposit expansion process,assuming a 10% reserve requirement.How much do deposits and loans increase for the banking system when the process is completed?
Q4) Explain why the simple deposit multiplier overstates the true deposit multiplier.
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Chapter 15: Tools of Monetary Policy
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Sample Questions
Q1) Which of the following statements is an example of the Fed's conditional commitment policy?
A)"In these circumstances,the Committee believes that policy accommodation can be maintained for a considerable period."
B)"The Committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time."
C)"Policy accommodation can be removed at a pace that is likely to be measured."
D)"The exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent,and inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal."
Q2) Everything else held constant,in the market for reserves,when the federal funds rate is 3%,increasing the interest rate paid on excess reserves from 1% to 2%
A)lowers the federal funds rate.
B)raises the federal funds rate.
C)has no effect on the federal funds rate.
D)has an indeterminate effect on the federal funds rate.
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Chapter 16: The Conduct of Monetary Policy: Strategy and Tactics
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Sample Questions
Q1) The theory that monetary policy conducted on a discretionary,day-by-day basis leads to poor long-run outcomes is referred to as the
A)adverse selection problem.
B)moral hazard problem.
C)time-inconsistency problem.
D)nominal-anchor problem.
Q2) Economists believe that countries recently suffering hyperinflation have experienced
A)reduced growth.
B)increased growth.
C)reduced prices.
D)lower interest rates.
Q3) Which of the following is NOT an operating instrument?
A)nonborrowed reserves
B)monetary base
C)federal funds interest rate
D)discount rate
Q4) Explain and demonstrate graphically how targeting the federal funds rate can result in fluctuations in nonborrowed reserves.
Page 18
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Chapter 17: The Foreign Exchange Market
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Sample Questions
Q1) Everything else held constant,when the current value of the domestic currency increases,the ________ domestic assets ________.
A)demand for;increases
B)quantity demanded of;increases
C)demand for;decreases
D)quantity demanded of;decreases
Q2) If the dollar appreciates from 1.5 Brazilian reals per dollar to 2.0 reals per dollar,the real depreciates from ________ per real to ________ per real.
A)$0.67;$0.50
B)$0.33;$0.50
C)$0.75;$0.50
D)$0.50;$0.67
E)$0.50;$0.75
Q3) An agreement to exchange dollar bank deposits for euro bank deposits in one month is a
A)spot transaction.
B)future transaction.
C)forward transaction.
D)deposit transaction.
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Chapter 18: The International Financial System
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Sample Questions
Q1) In the early 1970s,the U.S.ran large balance of payments ________,causing an ________ dollar and an ________ German mark.
A)deficits;undervalued;overvalued
B)deficits;overvalued;undervalued
C)surpluses;undervalued;overvalued
D)surpluses;overvalued;undervalued
Q2) A monetary policy strategy that uses a fixed exchange rate regime that ties the value of a currency to the currency of a large,low inflation country is called ________ targeting.
A)exchange-rate
B)currency
C)monetary
D)inflation
Q3) A foreign exchange intervention with an offsetting open market operation that leaves the monetary base unchanged is called
A)an unsterilized foreign exchange intervention.
B)a sterilized foreign exchange intervention.
C)an exchange rate feedback rule.
D)a money neutral foreign exchange intervention.
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Chapter 19: Quantity Theory, inflation, and the Demand for Money
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Sample Questions
Q1) The Baumol-Tobin analysis suggests that A)velocity is relatively constant.
B)the transactions component of the demand for money is negatively related to the level of interest rates.
C)the speculative motive is nonexistent.
D)velocity is unrelated to the transactions motive.
Q2) The theory of portfolio choice indicates that higher interest rates make money ________ desirable,and the demand for real money balances ________.
A)less;falls
B)more;falls
C)less;rises
D)more;rises
Q3) As interest rates rise,the expected absolute return of money ________,money's expected return relative to bonds ________.
A)does not change;decrease
B)rises;decrease
C)does not change;increase
D)falls;decrease
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Chapter 20: The Is Curve
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Sample Questions
Q1) A shift in tastes toward foreign goods ________ net exports in the U.S.and causes the IS curve to shift to the ________ in the U.S.,everything else held constant.
A)decreases;right
B)decreases;left
C)increases;right D)increases;left
Q2) If aggregate demand equals output,
A)the economy is in a recession.
B)output will increase.
C)output will fall.
D)the economy is at its equilibrium level.
Q3) Using the information in Situation 20-2,if taxes increase by $10,then the equilibrium aggregate output will change by
A)-$90.
B)-$10.
C)$10.
D)$90.
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Chapter 21: The Monetary Policy and Aggregate Demand
Curves
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Q1) Because prices are sticky in the short-run,when the Federal Reserve raises the federal funds rate
A)nominal interest rates fall.
B)real interest rates rise.
C)inflation falls.
D)real interest rates fall.
Q2) In deriving the aggregate demand curve a ________ inflation rate leads the central bank to ________ real interest rates,thereby ________ the level of equilibrium aggregate output.
A)higher;raise;lowering
B)lower;raise;lowering
C)higher;lower;lowering
D)higher;lower;raising
Q3) The Fed's policy actions of reacting to higher inflation by raising the real interest rate during 2004-2006 were
A)upward movements along the monetary policy curve.
B)downward movement along the monetary policy curve.
C)upward shifts of the monetary policy curve.
D)downward shifts of the monetary policy curve.
Page 23
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Chapter 22: Aggregate Demand and Supply Analysis
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Q1) Suppose the economy is producing at the natural rate of output.An open market purchase of bonds by the Fed will cause ________ in real GDP in the long run and ________ in inflation in the long run,everything else held constant.
A)an increase;an increase
B)a decrease;a decrease
C)no change;an increase
D)no change;a decrease
Q2) A theory of aggregate economic fluctuations called real business cycle theory holds that
A)changes in the real money supply are the only demand shocks that affect the natural rate of output.
B)aggregate demand shocks do affect the natural rate of output.
C)aggregate supply shocks do affect the natural rate of output.
D)changes in net exports are the only demand shocks that affect the natural rate of output.
Q3) Using the aggregate demand-aggregate supply model,explain and demonstrate graphically the short-run and long-run effects of an increase in the money supply.
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Chapter 23: Monetary Policy Theory
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Q1) Liquidity provision and asset purchase may not be enough to stimulate the economy unless the these policy actions are able to
A)lower the real interest rate for investments.
B)lower the short-term real interest rate.
C)raise the policy rate above zero.
D)lower the policy rate.
Q2) The recognition lag is
A)the time it takes for policy makers to obtain data indicating what is happening in the economy.
B)the time it takes for policy makers to be sure of what the data are signaling about the future course of the economy.
C)the time it takes to pass legislation to implement a particular policy.
D)the time it takes for policy makers to change policy instruments once they have decided on the new policy.
E)the time it takes for the policy actually to have an impact on the economy.
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25
Chapter 24: The Role of Expectations in Monetary Policy
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Q1) Approaches to establishing central bank credibility include
A)continued success at keeping inflation under control.
B)central bank independence.
C)appointment of a more conservative central banker.
D)all of the above.
Q2) Arguments for discretionary policies include
A)policy rules can be too rigid because they cannot foresee every contingency.
B)policy rules do not easily incorporate the use of judgment.
C)discretion avoids the straightjacket that would lock in the wrong policy if the model that was used to derive the policy rule proved to be incorrect.
D)discretion enables policy makers to change policy settings when an economy undergoes structural changes.
E)all of the above.
Q3) Approaches to establishing central bank credibility include
A)inflation targeting.
B)exchange rate targeting.
C)central bank independence.
D)appointment of a more conservative central banker.
E)all of the above.
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Chapter 25: Transmission Mechanisms of Monetary Policy
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Sample Questions
Q1) From 1990s until 2012,the Japanese economy has experienced
A)easy monetary policy as indicated by falling nominal interest rates.
B)easy monetary policy as indicated by short-term interest rates near zero.
C)tight monetary policy as indicated by falling asset prices.
D)tight monetary policy as indicated by short-term interest rates near zero.
Q2) An expansionary monetary policy lowers the real interest rate,causing the domestic currency to ________,thereby ________ net exports.
A)appreciate;raising B)appreciate;lowering C)depreciate;raising D)depreciate;lowering
Q3) Real business cycle theorists are critical of monetarist reduced-form evidence because they believe
A)money is the most important cause of changes in aggregate demand.
B)there is reverse causation from the business cycle to money.
C)there is reverse causation from money to the business cycle.
D)business cycles do not exist.
Q4) Explain the traditional interest-rate channel for expansionary monetary policy.Explain how a tight monetary policy affects the economy through this channel.
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Chapter 26: Web 1:financial Crises in Emerging Market
Economies
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Q1) Before the South Korean financial crisis,sales by the top five chaebols (family-owned conglomerates)were
A)nearly 50% of GDP.
B)about 10% of GDP.
C)almost 90% of GDP.
D)nearly 25% of GDP.
Q2) At the time of the South Korean financial crisis,the merchant banks were
A)almost virtually unregulated.
B)subject to heavy government regulation.
C)engaged in long-term lending to the corporate sector.
D)restricted to long-term foreign borrowing.
Q3) Financial crises generally develop along two basic paths
A)mismanagement of financial liberalization/globalization and severe fiscal imbalances.
B)stock market declines and severe fiscal imbalances.
C)mismanagement of financial liberalization/globalization and stock market declines.
D)stock market declines and unanticipated declines in the value of the domestic currency.
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Page 28
Chapter 27: Web 2:the Islm Model
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Q1) In the Keynesian model the quantity of money demanded is ________ related to income and ________ related to the interest rate.
A)positively;positively
B)positively;negatively
C)negatively;negatively
D)negatively;positively
Q2) If the economy is on the IS curve,but is to the left of the LM curve,aggregate output will ________ and the interest rate will ________.
A)rise;rise
B)rise;fall
C)fall;rise D)fall;fall
Q3) If the Federal Reserve conducts open market purchases,the money supply ________,shifting the LM curve to the ________,everything else held constant.
A)decreases;right
B)decreases;left
C)increases;right
D)increases;left
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Chapter 28: Web 3:nonbank Finance
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78 Verified Questions
78 Flashcards
Source URL: https://quizplus.com/quiz/30046
Sample Questions
Q1) Which of the following did not contribute to the failing of Freddie Mac and Freddie Mae?
A)Problems with adverse selection.
B)Problems with moral hazard.
C)Weak regulatory oversight.
D)Unethical accounting practices.
Q2) A Supreme Court ruling in March 1996 held that
A)state laws to prevent banks from selling insurance can be superseded by federal rulings from banking regulators that allow banks to sell insurance.
B)state laws to prevent banks from selling insurance cannot be superseded by federal rulings from banking regulators that allow banks to sell insurance.
C)state laws to prevent banks from selling insurance can be superseded only if Congress enacts legislation that allow banks to sell insurance.
D)state laws to prevent banks from selling insurance cannot be superseded by federal legislation.
Q3) Explain why the Social Security system faces problems.Discuss the possible solutions to these problems.
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Chapter 29: Web 4:financial Derivatives
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90 Verified Questions
90 Flashcards
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Sample Questions
Q1) A contract that requires the investor to buy securities on a future date is called a A)short contract.
B)long contract.
C)hedge.
D)cross.
Q2) The main advantage of using options on futures contracts rather than the futures contracts themselves is that interest-rate risk is
A)controlled while preserving the possibility of gains.
B)controlled,while removing the possibility of losses.
C)not controlled,but the possibility of gains is preserved.
D)not controlled,but the possibility of gains is lost.
Q3) If,for a $1000 premium,you buy a $100,000 put option on bond futures with a strike price of 114,and at the expiration date the price is 110,your ________ is ________.
A)profit;$4000
B)loss;$4000
C)profit;$3000
D)loss;$3000
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Chapter 30: Web 5:conflicts of Interest in the Financial
Services Industry
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50 Verified Questions
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Sample Questions
Q1) Which policy measure bans spinning?
A)Sarbanes-Oxley Act of 2002
B)Global Legal Settlement of 2002
C)Gramm-Leach-Bliley Act of 1999
D)Riegle-Neal Act of 1994
Q2) In investment banking,a conflict usually is present between the issuers of securities,who ________,and investors,who ________.
A)benefit from unbiased auditing;desire unbiased consulting
B)desire unbiased research;benefit from optimistic research
C)benefit from optimistic research;desire unbiased research
D)desire unbiased consulting;benefit from unbiased auditing
Q3) Which of the following policy measures required the SEC to prevent issuers of asset-backed securities from choosing the credit-rating agencies that will give them the highest rating and supported earlier initiatives by the SEC?
A)the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
B)Sarbanes-Oxley Act of 2002
C)Global Legal Settlement of 2002
D)Gramm-Leach-Bliley Act of 1999
E)Riegle-Neal Act of 1994
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