HKCEE ECONOMICS | 10.6 Classification of financial market | P.

1. 1991/II/33
Which of the following about the stock market in Hong Kong are correct?
(1) It helps firms to raise capital.
(2) It provides higher liquidity on investment.
(3) Only shares are traded on the stock market.
A. (1) and (2) only B. (1) and (3) only C. (2) and (3) only D. (1), (2) and (3)

2. 1991/II/35
Mr. Kam sold a soyabean futures contract and used the money to buy some shares newly issued by a limited
company. In which financial markets did Mr. Kam participate?
(1) the capital (2) the money market (3) the exchange market (4) the commodity market
A. (1) and (2) only B. (1) and (4) only C. (2) and (3) only D. (3) and (4) only

3. 1992/II/31
Which of the following is the best definition of 'money market'?
A. A market where capital funds are raised
B. A market where foreign currencies are traded
C. A market were short-term financial assets are traded
D. A market where long-term financial assets are traded

4. 1999/II/37
The government acquired a large number of stocks and shares in the stock exchange market in 1998.
Which of the following is correct?
A. It will result in a loss of foreign exchange reserves.
B. It will lead to a contraction of the money supply M3.
C. It will stop the speculative activities in the stock market.
D. It will mean a greater extent of government intervention in market mechanism.

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