Question 1 (Mandatory) (4 points)

An SSU's

Question 1 options:

1)	income and expenditures for the period are equal

2)	income for the period exceeds expenditures.

3)	expenditures for the period exceed receipts.

4)	spending is entirely financed by credit cards

Question 2 (Mandatory) (4 points)

Profitability of financial intermediaries derives from all of the following except

Question 2 options:

1)	government regulation of interest rates

2)	economies of scale

3)	ability to manage credit risk

4)	control of transactions costs

Question 3 (Mandatory) (4 points)

Pension funds tend to invest in

Question 3 options:

1)	higher-yielding long-term securities

2)	money market securities exclusively

3)	government securities exclusively

4)	none of the above

Question 4 (Mandatory) (4 points)

Short Answer: Explain why direct financing transactions are more costly and/or inconvenient than intermediated transactions?

Question 4 options:

Question 5 (Mandatory) (4 points)

Which of the following can be associated with original objectives of the Fed?

Question 5 options:

1)	coordinate an efficient payments mechanism.

2)	provide an elastic money supply

3)	serve as lender of last resort.

4)	all of the above