bank2008 introduction ti financial planning

Multiple Choice Questions

4. Monetary policy, administered by the RBA, is concerned with control over interest rates and the amount of money in circulation and is used to:

a. stimulate the economy by increasing interest rates.

b. stifle the economy by decreasing interest rates.

c. slow the economy by increasing interest rates.

d. stabilise the economy by decreasing the interest rates.

7. Australian Securities and Investments Commission's powers relate to consumers:

a. buying health insurance.

b. receiving financial advice.

c. borrowing money from a bank.

d. impacted by a merger or acquisition of financial institutions. 9. An individual's liquidity ratio includes

a. debt repayments over the next 15 years.

b. amount of an outstanding telephone account.

c. the balance of a 25-year mortgage loan.

d. superannuation balance.

10. The debt-service ratio shows debt commitments as a percentage of:

a. before-tax income.

b. total liabilities.

c. after-tax income.

d. total current assets.

11. An investor is likely to prefer receiving a given sum of money earlier, rather than later, because:

a. there is a greater chance of earning more interest the shorter the waiting period.

b. the longer it takes for the money to be received, the easier it is to reinvest.

c. they will have the ability to use the funds for current consumption.

d. there is certainty that money will be repaid at an agreed time in the long term