QUESTION 1 Ecogreen bonds were issued at $80 and are now trading in the secondary market at the price of $110. Which of the following statements is NOT correct? O A. The issuer records a loss, unrelated to the fluctuations in the secondary market. O B. An investor, who bought the bond at issue and sells it now, makes a capital gain of $30. O CA new investor, who buys the bond now and plans to keep it until maturity date, expects to make a capital loss of $10. O D. A new investor, who buys the bond now, makes a capital gain of $0 at the time of purchase. O E. The transaction brings $30 new funding to the issuer, QUESTION 2 At maturity date, a borrower repays in full the principal of a $1,000 loan and pays $100 interest. Which of the following statements is NOT correct? O A. Their assets decrease by $1, 100. O B. Their bank deposits decrease by $1, 100. O C Their debt decreases by $1, 100. O D. Their equity decreases by $100. O E. Their balance sheet shrinks. QUESTION 3 Mr Strachan (bank deposit account at Good Bank) pays his newspaper subscription to the media agency (bank deposit account at Bad Bank) with a bank transfer. Which of the following statements is correct? O A. The total amount of central bank money in the financial system has decreased. O B. Bad Bank's ESFs are decreased. O C. Good Bank destroys bank deposits for Mr Strachan. O D. The media agency gains ESFs. O E. The total amount of bank deposits in the financial system has decreased.QUESTION 4 Telstra, a telecom company, issues $100 face value bonds at the price of $80. The maturity of the bond is 2 years and the bond pays coupons every six months. Which of the following statement is NOT correct? A. After 1 year and a half, after the payment of a third coupon, the value of the bond recorded in the balance sheet of Telstra is $95. O B. The change in equity at the time of each coupon payment due to amortisation alone is a loss of $5. O C At the time of each coupon payment, the value of the bond in the balance sheet decreases by $5. O D. The amortization value at the time of each coupon payment is $5. E. At maturity date, when amortization is complete, the redemption value (ignoring the final coupon) to get rid of the bonds from the balance sheet will be $100. QUESTION 5 Which of the following transactions results in Wonder Bank destroying bank deposits in its own balance sheet? O A. Wonder Bank pays dividends to its customers, O B. Wonder Bank pays a coupon to its customers. O C. Wonder Bank's customer receives a salary from a depositor at another bank. O D. Wonder Bank buys an asset issued by its customers, O E. None of the above transactions destroy money in Wonder Bank. QUESTION 6 When Ecogreen, a company specialising in cleaning products good for the environment, buys back its own shares with its transactional bank account, O Av its liabilities decrease O B. its shares on issue increases O G its balance sheet shrinks D. its accumulated profit increases if the price of the share has increased since the issue of the shares O E it reallocates its assetsQUESTION 7 Which of the following statements is NOT correct? O A. A caravan is a liability for the company that produces it. O B. The jobseeker allowance is an income for the person that has lost their job. O C. The rent paid by the tenant to the landlord is an income for the landlord. O D. An electric car is an asset for the buyer of the car. O E. The bank deposit is an asset for the owner, QUESTION 8 and the bank deposits in the Telstra, a telecom company, pays a fee to a bank for its consulting service during an issue of bonds. Telstra has a deposit account at that bank. The central bank deposit at the bank receiving the fee banking system O A. increase; decrease O B. do not change; do not change O C. decrease; decrease O D. do not change; decrease O E decrease; do not change QUESTION 9 The power of finance companies to make loans comes from O A. having bank deposits as assets. O B. borrowing from a bank. O C. having bank deposits as liabilities. O D. getting income from loans. O E. having a credit license.QUESTION 10 Jane receives her (illegal) salary in Bitcoins. In her balance sheet, this results in O A a reallocation of assets; no change in equity O B. a reallocation in assets; no change in liabilities OC. an increase in equity; an increase in assets O D. a decrease in liabilities; an increase in equity O E a decrease in liabilities; an increase in assets