Weekly Review Quiz as of 2008-09-25
Economics: Macro
Bailout Pact Gains Momentum Amid Push for Tough Controls
by Greg Hitt, Deborah Solomon and Damian Paletta
09/25/2008
http://online.wsj.com/article/SB122226131131670949.html
1. The bailout package will likely
* a) include limits on executive pay and give the government rights to acquire shares in failing companies.
b) exclude limits on executive pay but give the government rights to acquire shares in failing companies.
c) include limits on executive pay but not give the government rights to acquire shares in failing companies.
d) include limits on executive pay and give the Treasury all of the bailout money immediately.
e) exclude limits on executive pay but give the Treasury all of the bailout money immediately.
Demand for Short-Term Treasury Debt Puts a Crimp in World-Wide Supply
by Liz Rappaport
09/25/2008
http://online.wsj.com/article/SB122226405399971093.html
2. There is so much demand for U.S. Treasury debt that
a) the Treasury has decided to increase the supply.
b) the Fed has decided to increase the supply.
* c) investors in the repo market are failing to deliver the bonds they promised
d) investors in the repo market are earning extraordinary returns.
e) the spread between asset-backed commercial paper and auto loans has narrowed.
Doubts on Rescue Plan Spur Fall In Dollar, Leap for Oil
by Tom Lauricella, Liz Rappaport and Joanna Slater
09/23/2008
http://online.wsj.com/article/SB122212828647765299.html
3. In response to the proposed bailout plan, investors
a) raced out of the Treasury-bond market which caused bond yields to fall.
* b) raced out of the Treasury-bond market which caused bond yields to rise.
c) raced to buy Treasury bonds which caused bond prices to fall.
d) raced to buy Treasury bonds which caused bond prices to rise.
e) shied away from junk bonds causing junk bond prices to rise.
Will Bailout Spur Inflation? Hedge That Bet
by Mark Gongloff
09/23/2008
http://online.wsj.com/article/SB122212597214265155.html
4. If the Fed increases the money supply to pay for some of the bailout,
a) inflation will fall causing the dollar to depreciate against foreign currencies.
b) inflation will fall causing the dollar to appreciate against foreign currencies.
c) cheaper dollars will make it harder for the government to repay its debt.
d) inflation will rise causing the dollar to appreciate against foreign currencies.
* e) inflation will rise causing the dollar to depreciate against foreign currencies.
SEC Is Set to Issue Temporary Ban Against Short Selling
by Kara Scanell, Deborah Solomon, Craig Karmin and Gregory Zuckerman
09/19/2008
http://online.wsj.com/article/SB122178234612954617.html
5. The SEC contemplated a ban on short selling which is when a trader
a) buys a borrowed stock, hoping the price will rise.
* b) sells a borrowed stock, hoping the price will fall.
c) buys a borrowed stock, hoping the price will fall.
d) sells a borrowed stock, hoping the price will rise.
e) borrows a share of stock and then sells it a short time later.