Exam 2: An Overview of the Financial System

The primary purpose of deposit insurance is to ________.

One reason for the extraordinary growth of foreign financial markets is ________.

The primary assets of credit unions are ________.

The time and money spent in carrying out financial transactions are called ________.

Describe the two methods of organizing a secondary market.

A financial market in which only short-term debt instruments are traded is called the ________ market.

Well-functioning financial markets ________.

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

Although the dominance of ________ over ________ is clear in all countries,the relative importance of bond versus stock markets differs widely.

Which of the following instruments are traded in a money market?

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

Prices of money market instruments undergo the least price fluctuations because of ________.

Which of the following instruments is not traded in a money market?

Overnight funds are ________.

Which of the following is an example of an intermediate-term debt?

U)S.dollar deposits in foreign banks outside the U.S.or in foreign branches of U.S.banks are called ________.

Which of the following benefit directly from any increase in the corporation's profitability?

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 ________.

The problem created by asymmetric information before the transaction occurs is called ________,while the problem created after the transaction occurs is called ________.

Reducing risk through the purchase of assets whose returns do not always move together is ________.