Question

1)The TARP program

• allocated $500 million to individuals who defaulted on their mortgages.
• provided $25 billion of debt relief to citizens who owed federal taxes.
• provided low-interest-rate loans for students attending college.
• provided low-interest-rate loans for new homeowners.
• allocated $700 billion to keep banks from failing.

Question 12

The interest rate of a bond is computed as a(n)

• difference.
• sum.
• absolute value.
• multiplication.
• growth rate

Question 13

If the interest rate of a one-year bond is 15 percent and its dollar price is $3,250, the face value of the bond is

• $3,737.50.
• $282.61.
• $373.75.
• $2,826.09.
• $3,350.00.

Question 14

What is one difference between the Dow Jones Industrial Average (the Dow) and the Standard and Poor's (S&P) 500 index?

• The S&P 500 provides more historical data than the Dow.
• The Dow provides a much broader representation of the stock market than the S&P 500 does.
• The S&P 500 provides data on 500 companies, and the Dow provides data on only 300 companies.
• The Dow tracks the price of the stock, whereas the S&P 500 weighs the stock prices by the market value of the company.
• The Dow weighs the stock prices by the market value of the company, whereas the S&P 500 tracks only the price of the stock.

Question 16

Treasury securities are

• only available to foreign investors.
• bonds sold by the U.S. government to pay for the national debt.
• securities backed by mortgages and student loans.
• sold directly to individual investors in the open market.
• riskier assets than most other investment options.

Question 15

The bonds sold by the U.S. government to pay for the national debt are called

• debt securities.
• mortgage-backed securities.
• tradable securities.
• securitizations.
• Treasury securities.

Question 17

In 2013, approximately how much of U.S. federal debt was held by foreigners?

• 17 percent
• 6 percent
• 30 percent
• 90 percent
• 55 percent

Question 18

Who determines when the loan associated with a bond becomes due?

• the bondholder, by declaring a desire to collect on the loan
• the bond issuer, by declaring a desire to repay the loan
• the bond issuer, by assigning a maturity date when the bond is issued
• anyone who buys the bond, by assigning a maturity date at the time of purchase
• anyone who sells or resells the bond, by assigning a maturity date at the time of sale

Question 19

In 2013, approximately how much of U.S. federal debt was held by foreigners?

• $0.9 trillion
• $18 trillion
• $7.6 trillion
• $5.3 trillion
• $1.2 trillion

Question 20 2 pts

Annual real per capita gross domestic product (GDP) in Western Europe was roughly $31,000 in 2000. If it grew by 4 percent the following year, by 2001 the annual real per capita GDP would be

• $72,000; $12,000
• $36,000; $18,000
• $5,200; $44,000
• $44,000; $5,200
• $44,000; $9,000

Question 21

Using 2010 U.S. dollars, in 2000 annual real per capita gross domestic product (GDP) in the United States was around ________, whereas in China, it was around ________.

• $31,400.
• $35,910.
• $43,400.
• $32,240.
• $57,800.

Answer 1

(1) Option (5)

The Troubled Asset relief Program (TARP) granted $700 billion emergency bail-out to commercial banks during 2008 crisis.

(12) Option (3)

Interest rate on bonds is an absolute value expressed in terms of percentage (e.g. 12%).

(13) Option (4)

If face value be F, then

F x 1.15 = $3,250

F = $3,250/1.15 = 2,826.09

(14) Option (4)

Dow Jones Index is affected by change in stock price only, but S&P Index has market value of stocks as weightage.

NOTE: As per Answering Policy, 1st 4 questions are answered.