1. Does bitcoin (and potentially other cryptocurrencies) satisfy the formal definition of money?
Your answer
2. Does bitcoin perform the 3 functions of money? Be sure to address each function.
Your answer
3. Could it replace dollars and coins as US currency (or legal tender)?
Your answer
4. If there are five goods in a barter economy, one needs to know ten prices in order to exchange one good for another. If, however, there are ten goods in a barter economy, then one needs to know ________ prices in order to exchange one good for another.
20
25
30
45
5. If an individual uses money from a demand deposit account to purchase a U.S. savings bond
M1 decreases and M2 stays the same.
M1 stays the same and M2 increases.
M1 stays the same and M2 stays the same.
M1 decreases and M2 decreases.
6. The concept of ________ is based on the common-sense notion that a dollar paid to you in the future is less valuable to you than a dollar today.
present value
future value
interest
deflation
7. The present value of an expected future payment ________ as the interest rate increases
falls
rises
is constant
is unaffected
8. If you deposit $10,000 in a bank account that pays 10% annually, how much will be in your account after 4 years?
$11,699
$15,357
$14,641
$20,000
9. What is the present value of a security that will pay $5,000 in 20 years if securities of equal risk pay 7% annually?
Option 1
What is the yield to maturity on a simple loan for $1M that requires a repayment of $2M in five years time?
14.9%
12.2%
10.4%
16.8%
10. Consider a coupon bond that has a $1,000 par value, has 2 years to maturity and a coupon rate of 10%. Based on the riskiness of the asset, you require a 9% return. How much should you pay for this bond?
$900
$983
$1,000
$1,018
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