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Chapter 1 - Introduction to Finance

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Chapter 1 - Introduction to Finance

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Chapter 1: An Introduction to Finance

Multiple Choice Questions
Section 1.1 – Real versus Financial Assets
1. Which of the following items is not a real asset?
A. Land
B. Television
C. Bond
D. Gold mine
Type: DefinitionLevel of Difficulty: EasyLO: 1.2

2. Of the following list, which item is a financial asset?
A. Land
B. Bond
C. Building
D. Inventory
Type: Definition Level of Difficulty: EasyLO: 1.2

3. What is the main difference between real assets and financial assets? A. Real assets are tangible and financial assets are intangible. B. Real assets have known values, while the values of financial assets are not known. C. Real assets are intangible and financial assets are tangible. D. Real assets have unknown values, while the values of financial assets are known. Type: DefinitionLevel of Difficulty: EasyLO: 1.2

4. If Canadian households, in aggregate, own real assets with a market value of $3.194 trillion, and also own net financial assets with a market value of $2.344 trillion, the total net assets of Canadian households have a market value of: A. 3.194 trillion

B. 5.538 trillion
C. –0.850 trillion
D. 0.850 trillion
Type: CalculationLevel of Difficulty: EasyLO: 1.2
How the answer was determined:
5.538 trillion = $3.194 + $2.344

5. Given the following hypothetical information regarding the real and financial assets in Canada for 2008 (numbers in $ billions):

 | Real Assets| Net Financial Assets|
Government| 677| –658|
Business| 2,202| –1,635|
Households| 3,194| 2,344|

What is the total value of the net real assets in Canada for 2008? A. $5,842 billion
B. $6,086 billion
C. $6,124 billion
D. $6,105 billion
Type: CalculationLevel of Difficulty: MediumLO: 1.2
How the answer was determined:
$6,124 billion = 677+2202+3194-658-1635+2344

6. You are provided with the following hypothetical information regarding the real and financial assets in Canada for 2008 (numbers in $...

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