Exam 2: An Overview of the Financial System

Risk sharing is profitable for financial institutions due to

An important function of secondary markets is to

Which of the following can be described as involving direct finance?

Every financial market has the following characteristic:

Which of the following are investment intermediaries?

The process where financial intermediaries create and sell low-risk assets and use the proceeds to purchase riskier assets is known as

If Microsoft sells a bond in London and it is denominated in dollars,the bond is a

The higher a security's price in the secondary market the ________ funds a firm can raise by selling securities in the ________ market.

The purpose of the disclosure requirements of the Securities and Exchange Commission is to

Which of the following is a long-term financial instrument?

Which of the following do not provide charters?

A breakdown of financial markets can result in

U)S.Treasury bills pay no interest but are sold at a ________. That is,you will pay a lower purchase price than the amount you receive at maturity.

With ________ finance,borrowers obtain funds from lenders by selling them securities in the financial markets.

An important feature of money market mutual fund shares is

The primary liabilities of depository institutions are

In order to reduce risk and increase the safety of financial institutions,commercial banks and other depository institutions are prohibited from

The process of indirect finance using financial intermediaries is called

When secondary market buyers and sellers of securities meet in one central location to conduct trades the market is called a(n)

Bonds that are sold in a foreign country and are denominated in a currency other than that of the country in which it is sold are known as