Exam 2: An Overview of the Financial System

In a(n)________ market,dealers in different locations buy and sell securities to anyone who comes to them and is willing to accept their prices.

When I purchase ________,I own a portion of a firm and have the right to vote on issues important to the firm and to elect its directors.

A debt instrument sold by a bank to its depositors that pays annual interest of a given amount and at maturity pays back the original purchase price is called

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

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

The primary assets of credit unions are

Which of the following financial intermediaries is NOT a depository institution?

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

U.S.Treasury bills are considered the safest of all money market instruments because there is a low probability of

Which of the following is a depository institution?

Economies of scale enable financial institutions to

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

Thrift institutions include

Which of the following are short-term financial instruments?

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

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

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 can be described as involving indirect finance?

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

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