Question 1

A corporation acquires new funds only when its securities are sold in the ________.

Accepted Answer

A) secondary market by an investment bank 
B) primary market by an investment bank 
C) secondary market by a stock exchange broker 
D) secondary market by a commercial bank 
A) secondary market by an investment bank 
B) primary market by an investment bank 
C) secondary market by a stock exchange broker 
D) secondary market by a commercial bank

Question 2

An example of economies of scale in the provision of financial services is ________.

Accepted Answer

A) investing in a diversified collection of assets 
B) providing depositors with a variety of savings certificates 
C) spreading the cost of borrowed funds over many customers 
D) spreading the cost of writing a standardized contract over many borrowers 
A) investing in a diversified collection of assets 
B) providing depositors with a variety of savings certificates 
C) spreading the cost of borrowed funds over many customers 
D) spreading the cost of writing a standardized contract over many borrowers

Question 3

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

Accepted Answer

A) the short terms to maturity for the securities 
B) the heavy regulations in the industry 
C) the price ceiling imposed by government regulators 
D) the lack of competition in the market 
A) the short terms to maturity for the securities 
B) the heavy regulations in the industry 
C) the price ceiling imposed by government regulators 
D) the lack of competition in the market

Question 4

The countries that have made the least use of securities markets are ________ and ________; in these two countries finance from financial intermediaries has been almost ten times greater than that from securities markets.

Accepted Answer

A) Germany; Japan 
B) Germany; Great Britain 
C) Great Britain; Canada 
D) Canada; Japan 
A) Germany; Japan 
B) Germany; Great Britain 
C) Great Britain; Canada 
D) Canada; Japan

Question 5

Equity and debt instruments with maturities greater than one year are called ________ market instruments.

Accepted Answer

A) capital 
B) money 
C) federal 
D) benchmark 
A) capital 
B) money 
C) federal 
D) benchmark

Question 6

You can borrow $5000 to finance a new business venture. This new venture will generate annual earnings of $251. The maximum interest rate that you would pay on the borrowed funds and still increase your income is ________.

Accepted Answer

A) 25 percent 
B) 12.5 percent 
C) 10 percent 
D) 5 percent 
A) 25 percent 
B) 12.5 percent 
C) 10 percent 
D) 5 percent

Question 7

The concept of diversification is captured by the statement ________.

Accepted Answer

A) don't look a gift horse in the mouth 
B) don't put all your eggs in one basket 
C) it never rains, but it pours 
D) make hay while the sun shines 
A) don't look a gift horse in the mouth 
B) don't put all your eggs in one basket 
C) it never rains, but it pours 
D) make hay while the sun shines

Question 8

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

Accepted Answer

A) Provincial government bonds 
B) Treasury bills 
C) Corporate bonds 
D) Government agency securities 
A) Provincial government bonds 
B) Treasury bills 
C) Corporate bonds 
D) Government agency securities

Question 9

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

Accepted Answer

A) active 
B) determined 
C) indirect 
D) direct 
A) active 
B) determined 
C) indirect 
D) direct

Question 10

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

Accepted Answer

A) owning corporate bonds 
B) making real estate loans 
C) making personal loans 
D) owning common stock 
A) owning corporate bonds 
B) making real estate loans 
C) making personal loans 
D) owning common stock

A corporation acquires new funds only when its securities are sold in the ________.

An example of economies of scale in the provision of financial services is ________.

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

The countries that have made the least use of securities markets are and ; in these two countries finance from financial intermediaries has been almost ten times greater than that from securities markets.

Equity and debt instruments with maturities greater than one year are called ________ market instruments.

You can borrow $5000 to finance a new business venture. This new venture will generate annual earnings of $251. The maximum interest rate that you would pay on the borrowed funds and still increase your income is ________.

The concept of diversification is captured by the statement ________.

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

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

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

Why Study Money, Banking, and Financial Markets

What Is Money

Understanding Interest Rates

The Behaviour of Interest Rates

The Risk and Term Structure of Interest Rates

The Stock Market, the Theory of Rational Expectations, and the Efficient Market Hypothesis

An Economic Analysis of Financial Structure

Financial Crises

Economic Analysis of Financial Regulation

Banking Industry: Structure and Competition

Banking and the Management of Financial Institutions

Risk Management With Financial Derivatives

Central Banks and the Bank of Canada

The Money Supply Process

Tools of Monetary Policy

The Conduct of Monetary Policy: Strategy and Tactics

The Foreign Exchange Market

The International Financial System

Quantity Theory, Inflation, and the Demand for Money

The Is Curve

The Monetary Policy and Aggregate Demand Curves

Aggregate Demand and Supply Analysis

Monetary Policy Theory

The Role of Expectations in Monetary Policy

Transmission Mechanisms of Monetary Policy

Financial Crises in Emerging Markets

The ISLM Model

Non-Bank Finance

Filters

Exam 2: An Overview of the Financial System

A corporation acquires new funds only when its securities are sold in the ________.

An example of economies of scale in the provision of financial services is ________.

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

The countries that have made the least use of securities markets are ________ and ________; in these two countries finance from financial intermediaries has been almost ten times greater than that from securities markets.

Equity and debt instruments with maturities greater than one year are called ________ market instruments.

You can borrow $5000 to finance a new business venture. This new venture will generate annual earnings of $251. The maximum interest rate that you would pay on the borrowed funds and still increase your income is ________.

The concept of diversification is captured by the statement ________.

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

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

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

Why Study Money, Banking, and Financial Markets

What Is Money

Understanding Interest Rates

The Behaviour of Interest Rates

The Risk and Term Structure of Interest Rates

The Stock Market, the Theory of Rational Expectations, and the Efficient Market Hypothesis

An Economic Analysis of Financial Structure

Financial Crises

Economic Analysis of Financial Regulation

Banking Industry: Structure and Competition

Banking and the Management of Financial Institutions

Risk Management With Financial Derivatives

Central Banks and the Bank of Canada

The Money Supply Process

Tools of Monetary Policy

The Conduct of Monetary Policy: Strategy and Tactics

The Foreign Exchange Market

The International Financial System

Quantity Theory, Inflation, and the Demand for Money

The Is Curve

The Monetary Policy and Aggregate Demand Curves

Aggregate Demand and Supply Analysis

Monetary Policy Theory

The Role of Expectations in Monetary Policy

Transmission Mechanisms of Monetary Policy

Financial Crises in Emerging Markets

The ISLM Model

Non-Bank Finance

Filters

The countries that have made the least use of securities markets are and ; in these two countries finance from financial intermediaries has been almost ten times greater than that from securities markets.