FINANCE

Understanding Financial Markets and Institutions

 

BA 540 Chapter 06 – Understanding Financial Markets and Institutions

BA540 Chapter 06 – Understanding Financial Markets and Institutions

BA/540 Chapter 06 – Understanding Financial Markets and Institutions

BA-540 Chapter 06 – Understanding Financial Markets and Institutions

Multiple Choice Questions
1. These provide a forum in which demanders of funds raise funds by issuing new financial instruments, such as stocks and bonds.
A. investment banks
B. money markets
C. primary markets
D. secondary markets

 

2. In the U.S., these financial institutions arrange most primary market transactions for businesses.
A. investment banks
B. asset transformer
C. direct transfer agents
D. over-the-counter agents

 

3. Primary market financial instruments include stock issues from firms allowing their equity shares to be publicly traded on stock market for the first time. We usually refer to these first-time issues as which of the following?
A. initial public offerings
B. direct transfers
C. money market transfers
D. over-the-counter stocks

 

4. Once firms issue financial instruments in primary markets, these same stocks and bonds are then traded in which of these?
A. initial public offerings
B. direct transfers
C. secondary markets
D. over-the-counter stocks

 

5. These feature debt securities or instruments with maturities of one year or less.
A. money markets
B. primary markets
C. secondary markets
D. over-the-counter stocks

 

6. Which of the following is NOT a money market instrument?
A. Treasury bills
B. Commercial paper
C. Corporate bonds
D. Banker’s acceptances

 

7. These money market instruments are short-term funds transferred between financial institutions, usually for no more than one day.
A. Treasury bills
B. Federal funds
C. Commercial paper
D. Banker acceptances

 

8. Which of the following is NOT a capital market instrument?
A. U.S. Treasury notes and bonds
B. U.S. Treasury bills
C. U.S. government agency bonds
D. Corporate stocks and bonds

 

9. These capital market instruments are long-term loans to individuals or businesses to purchase homes, pieces of land, or other real property.
A. Treasury notes and bonds
B. Mortgages
C. Mortgage-backed securities
D. Corporate bonds

 

10. These markets trade currencies for immediate or for some future stated delivery.
A. money markets
B. primary markets
C. foreign exchange markets
D. over-the-counter stocks

 

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