1. A country whose financial markets function poorly is likely to _____.

   		efficiently allocate its capital resources
   		enjoy high productivity
   		experience economic hardship and financial crises
   		increase the standard of living

2 points

QUESTION 37

1. ______ is the riskiness of an asset's return that results from interest rate changes.

   		Reinvestment risk
   		Interest rate risk
   		Coupon risk
   		Liquidity risk

2 points

QUESTION 38

1. The board of governors of the Fed _____

   		sets reserve requirements
   		sets fiscal policy
   		sets the Fed Funds rate

2 points

QUESTION 39

1. Which of the following is an objective of the Federal Reserve in conducting its monetary policy?

   		Price stability
   		To counter LIBOR
   		Tto maintain a steady Fed funds rate

2 points

QUESTION 40

1. In general, money market securities are ____ securities.

   		high yield
   		low risk
   		long term (> five years)

2 points

QUESTION 41

1. Capital market securities are _____ than money market securities.

   		A) more liquid
   		B) longer term
   		C) normally higher return
   		both B) and C)