6. According to our lectures, which of the following assets is most likely to be under-

valued?

(A) Stocks.

(B) Silver.

(C) Bonds.

(D) Commercial Real Estate.

7. Which of the following is NOT a valid critique of Bitcoin?

(A) The distributed ledger can be easily hacked and falsied.

(B) Slow transaction speeds.

(C) It is highly leveraged and overly speculative.

(D) Its price is volatile.

8. Suppose that a 5-year bond has a face value of $1,000, along with an annual coupon

of $50. You purchase it for $1,250. What is your yield?

(A) 5 percent.

(B) 4.5 percent.

(C) 4 percent.

(D) 3.5 percent.

9. Negative interest rates occur when the in

ation rate exceeds the nominal interest

rate. Historically, which of the following assets is the best hedge against negative interest

rates?

(A) Gold.

(B) Bonds.

(C) Stocks.

(D) A Bank Negra negotiable note.

10.Which of the following is NOT true of Modern Monetary Theory (MMT)?

(A) MMT advocates are not concerned about in

ation.

(B) MMT advocates do not care about debts or decits.

(C) MMT only works if a country has a monopoly over its own currency issuance.

(D) MMT advocates want the government to print money.

11. Since 2008, the U.S. Federal Reserve has released a lot of currency into circulation,

with little to no corresponding increase in in

ation. What is a potential reason for this?

(A) The USD is the world's reserve currency.

(B) Americans are not spending the extra currency, but rather putting it into assets.

(C) The American economy has experienced economic growth and recovery since 2008.

(D) All of the above.

12. You manage a shariah-compliant bank. A customer of yours is purchasing a house

for $800,000, and wants to acquire nancing from you. You both agree to a contract

in which your client pays $200,000, and the bank pays the remaining $600,00, for the

house. The customer owns 25 percent equity in the home, while the bank owns 75

percent equity. Your client pays you a rent on the 75 percent of the house that the bank

owns, and can over time buy up the 75 percent equity. What model of Islamic nance

is this?

(A) Wadiah.

(B) Ijarah.

(C) Murabahah.

(D) Musharaka.

13. You deposit your money in an Islamic bank, which is forbidden from using the

deposits for lending. You pay the bank a monthly fee of 0.05 percent to keep your

money. What model of Islamic nance is this?

(A) Wadiah.

(B) Ijarah.

(C) Murabahah.

(D) Musharaka.

14. This question relies on Calomiris and Haber's (2014) framework. You are considering

buying bank shares in one of the following countries. Which one would you choose?

(A) Country A, which has an absolute dictator.

(B) Country B, which has a centralized autocracy.

(C) Country C, which is fractured with local oligarchies.

(D) Country D, with no functioning government whatsoever.

15. You manage a hedge fund in Calgary. You strongly suspect that Canada will

experience a nancial crisis in six months' time. You also expect high in

ation: greater

than 10 percent. Which of the following is your best strategy to ensure prots?

(A) Purchase $5,000 face-value bonds for $4,500 per bond, with a put option to sell at

$5,000 in six months. The option premium is $50 per bond, and the bond pays a

coupon of $500 every year, for 10 years.

(B) Purchase an ETF that is indexed to the TSX.

(C) Liquidate your commercial real estate holdings, and use the cash to purchase allo-

cated gold.

(D) Buy $1 billion in Bitcoin and short GameStop.