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

 
72. A company that issues promissory notes into the short-term debt markets is conducting a transaction in the:
A. commercial paper market.
B. inter-bank market.
C. bills market.
D. official short-term money market.
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


 
73. A company with a high credit rating can issue _____ directly into the money markets.
A. CDs
B. Commercial paper
C. unsecured notes
D. debentures
Ans: C
AACSB: Reflective thinking
Bloom's: Synthesis
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


 
74. The market that generally involves the buying and selling of discount securities is the:
A. securities market.
B. money market.
C. share market.
D. capital market.
Ans: B
AACSB: Reflective thinking
Bloom's: Synthesis
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


 
75. A source of short-term liquidity funding for banks is the issue of:
A. bank bills.
B. debentures.
C. certificates of deposit.
D. commercial paper.
Ans: C
AACSB: Reflective thinking
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


 
76. The market that includes individuals, companies and governments in the buying and selling of long-term debt and equity securities is the:
A. currency market.
B. debt market.
C. capital market.
D. financial market.
Ans: C
AACSB: Reflective thinking
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


 
77. When a company issues a long-term debt instrument with no security attached it is selling _____ to investors.
A. shares
B. debentures
C. unsecured notes
D. term loans
Ans: C
AACSB: Reflective thinking
Bloom's: Synthesis
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


 
78. From the viewpoint of a corporation, which source of long-term funding does not have to be repaid?
A. Equity
B. Commercial paper
C. Corporate bonds
D. Bank bills
Ans: A
AACSB: Reflective thinking
Bloom's: Synthesis
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


 
79. The term ‘liquidity’ refers to:
A. the length of time required to sell an asset.
B. the price discount received from buying an asset.
C. the price discount received from selling an asset.
D. access to cash and other sources of funds to meet day-to-day expenses.
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