1.
Award: 10.00 points
2.
Award: 10.00 points
Primary markets are markets in which users of funds raise cash by selling securities to funds
suppliers.
True
False
References
True / False Difficulty: 1 Easy
Secondary markets are markets used by corporations to raise cash by issuing securities for a short
time period.
True
False
References
True / False Difficulty: 1 Easy
3.
Award: 10.00 points
4.
Award: 10.00 points
Corporate security issuers are always directly involved in funds transfers in the secondary market.
True
False
References
True / False Difficulty: 1 Easy
The NYSE is an example of a secondary market.
True
False
References
True / False Difficulty: 2 Medium
5.
Award: 10.00 points
6.
Award: 10.00 points
Central governments sometimes indirectly intervene in foreign exchange markets by affecting
foreign exchange rates through raising or lowering interest rates.
True
False
References
True / False Difficulty: 1 Easy
Money markets are the markets for securities with an original maturity of one year or less.
True
False
References
True / False Difficulty: 1 Easy
7.
Award: 10.00 points
8.
Award: 10.00 points
Financial intermediaries rather than financial systems are the most common agents to channel funds
from the suppliers to the users of funds.
True
False
References
True / False Difficulty: 1 Easy
There are three types of major financial markets today: primary, secondary, and derivatives markets.
The NYSE and NASDAQ are both examples of derivatives markets.
True
False
References
True / False Difficulty: 2 Medium
9.
Award: 10.00 points
10.
Award: 10.00 points
Asset transformation by financial intermediaries involves increasing the risk attributes of securities
such as mortgages, bonds, and stocks.
True
False
References
True / False Difficulty: 1 Easy
One of the factors responsible for globalization of financial markets and institutions is deregulation.
True
False
References
True / False Difficulty: 1 Easy
11.
Award: 10.00 points
12.
Award: 10.00 points
The average cost incurred by financial institutions to collect information is larger than that of
individuals.
True
False
References
True / False Difficulty: 1 Easy
The Vol cker Rule prohibits U.S. depository institutions from engaging in proprietary trading.
True
False
References
True / False Difficulty: 1 Easy
13.
Award: 10.00 points
14.
Award: 10.00 points
Financial intermediation provides direct transfer of funds to the users.
True
False
References
True / False Difficulty: 2 Medium
In the United States, the SEC provides deposit insurance for $250,000 per person per bank.
True
False
References
True / False Difficulty: 1 Easy
15.
Award: 10.00 points
16.
Award: 10.00 points
An Enterprise Risk Management (ERM) system is responsible for managing the totality of a firm’s risk
exposures.
True
False
References
True / False Difficulty: 1 Easy
What factors are encouraging financial institutions to offer overlapping financial services such as
banking, investment banking, brokerage, etc.?
I. Regulatory changes allowing institutions to offer more services
II. Technological improvements reducing the cost of providing financial services
III. Increasing competition from full-service global financial institutions
IV. Reduction in the need to manage risk at financial institutions
I only
II and III only
I, II, and III only
I, II, and IV only
I, II, III, and IV
References
Multiple Choice Difficulty: 2 Medium
17.
Award: 10.00 points
18.
Award: 10.00 points
IBM creates and sells additional stock to the investment banker Morgan Stanley. Morgan Stanley
then resells the issue to the U.S. public through its mutual funds.
This transaction is an example of a(n):
primary market transaction.
asset transformation by Morgan Stanley.
money market transaction.
foreign exchange transaction.
forward transaction.
References
Award: 10.00 points
2.
Award: 10.00 points
Primary markets are markets in which users of funds raise cash by selling securities to funds
suppliers.
True
False
References
True / False Difficulty: 1 Easy
Secondary markets are markets used by corporations to raise cash by issuing securities for a short
time period.
True
False
References
True / False Difficulty: 1 Easy
3.
Award: 10.00 points
4.
Award: 10.00 points
Corporate security issuers are always directly involved in funds transfers in the secondary market.
True
False
References
True / False Difficulty: 1 Easy
The NYSE is an example of a secondary market.
True
False
References
True / False Difficulty: 2 Medium
5.
Award: 10.00 points
6.
Award: 10.00 points
Central governments sometimes indirectly intervene in foreign exchange markets by affecting
foreign exchange rates through raising or lowering interest rates.
True
False
References
True / False Difficulty: 1 Easy
Money markets are the markets for securities with an original maturity of one year or less.
True
False
References
True / False Difficulty: 1 Easy
7.
Award: 10.00 points
8.
Award: 10.00 points
Financial intermediaries rather than financial systems are the most common agents to channel funds
from the suppliers to the users of funds.
True
False
References
True / False Difficulty: 1 Easy
There are three types of major financial markets today: primary, secondary, and derivatives markets.
The NYSE and NASDAQ are both examples of derivatives markets.
True
False
References
True / False Difficulty: 2 Medium
9.
Award: 10.00 points
10.
Award: 10.00 points
Asset transformation by financial intermediaries involves increasing the risk attributes of securities
such as mortgages, bonds, and stocks.
True
False
References
True / False Difficulty: 1 Easy
One of the factors responsible for globalization of financial markets and institutions is deregulation.
True
False
References
True / False Difficulty: 1 Easy
11.
Award: 10.00 points
12.
Award: 10.00 points
The average cost incurred by financial institutions to collect information is larger than that of
individuals.
True
False
References
True / False Difficulty: 1 Easy
The Vol cker Rule prohibits U.S. depository institutions from engaging in proprietary trading.
True
False
References
True / False Difficulty: 1 Easy
13.
Award: 10.00 points
14.
Award: 10.00 points
Financial intermediation provides direct transfer of funds to the users.
True
False
References
True / False Difficulty: 2 Medium
In the United States, the SEC provides deposit insurance for $250,000 per person per bank.
True
False
References
True / False Difficulty: 1 Easy
15.
Award: 10.00 points
16.
Award: 10.00 points
An Enterprise Risk Management (ERM) system is responsible for managing the totality of a firm’s risk
exposures.
True
False
References
True / False Difficulty: 1 Easy
What factors are encouraging financial institutions to offer overlapping financial services such as
banking, investment banking, brokerage, etc.?
I. Regulatory changes allowing institutions to offer more services
II. Technological improvements reducing the cost of providing financial services
III. Increasing competition from full-service global financial institutions
IV. Reduction in the need to manage risk at financial institutions
I only
II and III only
I, II, and III only
I, II, and IV only
I, II, III, and IV
References
Multiple Choice Difficulty: 2 Medium
17.
Award: 10.00 points
18.
Award: 10.00 points
IBM creates and sells additional stock to the investment banker Morgan Stanley. Morgan Stanley
then resells the issue to the U.S. public through its mutual funds.
This transaction is an example of a(n):
primary market transaction.
asset transformation by Morgan Stanley.
money market transaction.
foreign exchange transaction.
forward transaction.
References