34. The financial futures market:

A. Is a place in Chicago where future stocks are traded.

B. Allows for the delivery of financial instruments at some future point in time.

C. Is of particular value to small investors in managing their portfolios.

D. Two of the above.

35. LIBOR is:

A. A resource used in production.

B. An interest rate paid on Eurodollar deposits in the London market.

C. An interest rate paid by European firms when they borrow Eurodollar deposits from U.S. banks.

D. The interest rate paid by the British government on its long-term bonds.

36. In determining the cost of bank financing, which is the important factor?

A. Prime rate.

B. Nominal rate.

C. Annual Percentage Yield

D. Discount rate.

37. From the bankers point of view, short-term bank credit is an excellent way of financing:

A. Fixed assets.

B. Permanent working capital needs.

C. Repayment of long-term debt.

D. Seasonal bulges in inventory and receivables.

38. Compensating balances:

A. Are used by banks as a substitute for charging service fees.

B. Are created by having a sweep account.

C. Generate returns to customers from interest bearing accounts.

D. Are used to reward new accounts.

39. The Milling Corporation has developed a new type of widget. The local distributor expects to increase his sales by 20% over the past year due to this new development. Last years sales were $600,000, at a selling price of $100 per unit. A safety stock of 23 units has eliminates stockouts. The carrying costs are $5.00. The manager would like to cut costs as much as possible and comes to get your advice for the economic ordering quantity. How much should he order?

A. 100 units.

B. 155 units.

C. 50 units.

D. 490 units.