Credit risk refers to a bond’s ?

Related Mcqs:

1. A reduction in interest rates, causes an increases in the monetary base that results in an _________ in the availability of consumer credit and a ________ in the cost of consumer credit?

   A. reduction, increase
   B. reduction, reduction
   C. increase, reduction
   D. increase , increase

2. The normal rate of profit for relatively risk-free firms will be _________ the interest rate on risk-free government bonds?

   A. approximately one-half
   B. smaller than
   C. larger than
   D. approximately equal to

3. Which of the following is not rated by credit rating agencies ?

   A. Shares
   B. Debentures and bonds
   C. Commercial paper
   D. Government securities

4. what is called an evaluation of credit quality of a company’s debt issued by Moody’s S&P and Fitch investors services ?

   A. Credit worthiness
   B. Credit Worth
   C. Credit line
   D. Ratings

5. The power of a bank to create credit is affected by ?

   A. The cash reserve requirement
   B. The amount of cash available
   C. The number of branches of a bank
   D. A and B of above

6. When a commercial bank creates credit its immediate effect is that it raises__________________?

   A. The exchange rates
   B. The interest rates
   C. The money supplies
   D. The real national income

7. All of the following are credit items in the balance of payments except ?

   A. investment inflows
   B. merchandise exports
   C. payments for American services to foreigners
   D. private gives to foreign residents

8. Credit (+) items in the balance of payments correspond to anything that ?

   A. involves receipts from foreigners
   B. involves payments to foreigners
   C. increases the domestic money supply
   D. decreases the demand for foreign exchange

9. When all of the debit or credit items in the balance of payments are combined ?

   A. merchandise imports equal merchandise exports
   B. capital imports equal capital exports
   C. services exports equal services imports
   D. the total surplus or deficit equals zero

10. When the financial system lacks the capability of making judgement about investment opportunities due to asymmetric information leading to potentially bad credit risks lending is subject to ?

    A. adverse selection
    B. moral hazard
    C. social goods
    D. hyperinflation