Financial Institutions, Instruments and Markets 9th Edition by Christopher Viney Test bank

Est time: <1 minute
Learning Objective: 1.02 Explain the functions of a modern financial system and categorise the main types of financial institutions, including depository financial institutions, investment banks, contractual savings institutions, finance companies and unit trusts.
Section: 1.05 Flow of funds, market relationships and stability
Topic: Flow of funds, market relationships and stability


 
65. Which of the following borrowers would pay the lowest interest rate on debts of equal maturity?
A. The National Bank of Australia
B. Telstra
C. The City of Sydney
D. The Commonwealth Government
Ans: D
AACSB: Communication
Bloom's: Knowledge
Difficulty: Easy
Est time: <1 minute
Learning Objective: 1.02 Explain the functions of a modern financial system and categorise the main types of financial institutions, including depository financial institutions, investment banks, contractual savings institutions, finance companies and unit trusts.
Section: 1.02 The financial system and financial institutions
Topic: The financial system and financial institutions


 
66. Generally, in the long term, a government:
A. is a net borrower of funds.
B. is a net supplier of funds.
C. borrows funds directly from households.
D. borrows funds directly from the financial market.
Ans: A
AACSB: Communication
Bloom's: Knowledge
Difficulty: Easy
Est time: <1 minute
Learning Objective: 1.02 Explain the functions of a modern financial system and categorise the main types of financial institutions, including depository financial institutions, investment banks, contractual savings institutions, finance companies and unit trusts.
Section: 1.05 Flow of funds, market relationships and stability
Topic: Flow of funds, market relationships and stability


 
67. The _______ is created by a financial connection between providers and users of short-term funds.
A. share market
B. capital market
C. money market
D. financial market
Ans: C
AACSB: Communication
Bloom's: Knowledge
Difficulty: Easy
Est time: <1 minute
Learning Objective: 1.04 Discuss the nature of the flow of funds between savers and borrowers, including primary markets, secondary markets, direct finance and intermediated finance.
Section: 1.04 Financial markets
Topic: Financial markets


 
68. Which of the following is NOT usually a short-term discount security?
A. Negotiable certificates of deposit
B. Commercial paper
C. Bank bills
D. Unsecured notes
Ans: D
AACSB: Communication
Bloom's: Comprehension
Difficulty: Medium
Est time: <1 minute
Learning Objective: 1.04 Discuss the nature of the flow of funds between savers and borrowers, including primary markets, secondary markets, direct finance and intermediated finance.
Section: 1.04 Financial markets
Topic: Financial markets


 
69. Which of the following is NOT a feature of the money market?
A. It is a mainly wholesale market.
B. It deals with short-term financial claims.
C. It is important in financing the working-capital needs of businesses and governments.
D. It only operates as a market in which new security issues are created and marketed.
Ans: D
AACSB: Communication
Bloom's: Knowledge
Difficulty: Medium
Est time: <1 minute
Learning Objective: 1.04 Discuss the nature of the flow of funds between savers and borrowers, including primary markets, secondary markets, direct finance and intermediated finance.
Section: 1.04 Financial markets
Topic: Financial markets


 
70. The market that involves the buying and selling of short-term securities is the:
A. securities market.
B. money market.
C. share market.
D. capital market.
Ans: B
AACSB: Communication
Bloom's: Knowledge
Difficulty: Easy
Est time: <1 minute
Learning Objective: 1.04 Discuss the nature of the flow of funds between savers and borrowers, including primary markets, secondary markets, direct finance and intermediated finance.
Section: 1.04 Financial markets
Topic: Financial markets


 
71. A large company with a temporary surplus of funds is most likely to buy:
A. bank bills.
B. convertible notes.
C. debentures.
D. shares.
Ans: A
AACSB: Communication
Bloom's: Knowledge
Difficulty: Easy
Est time: <1 minute
Learning Objective: 1.04 Discuss the nature of the flow of funds between savers and borrowers, including primary markets, secondary markets, direct finance and intermediated finance.
Section: 1.04 Financial markets
Topic: Financial markets