Series 65: Chapter 1 Practice Questions

Taken from our Series 65 Online Guide

Chapter 1 Practice Questions

  1. 1. A recession is a protracted period of decline in the national economy, typically defined as:
  2. A. More than two quarters of decreasing GDP
  3. B. More than two quarters of decline in the housing market
  4. C. More than two quarters of shrinking M1
  5. D. More than two quarters of a falling PPI
  6. 2. The Federal Reserve would like to stimulate the economy. Which of the following actions would do so?
  7. A. Buy Treasuries
  8. B. Raise the discount rate
  9. C. Raise the bank reserve requirements
  10. D. Raise the margin requirements
  11. 3. All of the following are tools that the Federal Reserve uses to implement monetary policy except:
  12. A. Open market operations
  13. B. Discount window lending
  14. C. Altering bank reserve requirements
  15. D. Altering the value of the dollar
  16. 4. Which of the following might cause the Federal Reserve to take action to stimulate the economy?
  17. A. A rise in the CPI
  18. B. A rise in the PPI
  19. C. A drop in housing starts
  20. D. A drop in unemployment
  21. 5. Which of the following may lead the Fed to loosen the money supply?
  22. A. A rise in commodity prices
  23. B. A drop in the strength of the dollar
  24. C. A decline in GDP
  25. D. MI has risen sharply
  26. 6. All of the following might lead to the tightening of the money supply except:
  27. A. A rise in the CPI
  28. B. A rise in non-farm payroll in a fully-employed economy
  29. C. A widening in credit spreads
  30. D. A rise in the trade deficit
  31. 7. A situation in which short-term securities pay higher yields than long-term securities is considered a(n) _ yield curve.
  32. A. Normal
  33. B. Inverted
  34. C. Flat
  35. D. Barbell
  36. 8. All of the following are true of yield spreads except:
  37. A. Spreads widen during recessionary periods.
  38. B. Spreads narrow during periods of economic prosperity.
  39. C. Compression of bond yields in general usually means that the economy is declining.
  40. D. A bond with a large credit spread means that bondholders

Since you're reading about Series 65: Chapter 1 Practice Questions, you might also be interested in:

Solomon Exam Prep Study Materials for the Series 65
Please Enable Javascript
to view this content!