18 of 24 points

 
Markets comprised of securities with maturities greater than one year are generally referred to
as: *

2/2

bond markets

stock markets

money markets

capital markets

Which of the following characteristics of financial intermediaries is incorrect: *

2/2

they help make the flow of funds efficient and competitive

they include banks, mutual funds, and credit unions

They increase the cost of funds to corporation and governments

 
they are the interface between suppliers and demanders of funds

Markets comprised of securities with maturities of one year or less are generally referred to
as: *

2/2

stock markets

capital markets

money markets
 
bond markets

Which one of the following best describes the role of a financial intermediary? *

2/2

Suppliers of capital are hesitant to individually accept the credit risk associated with lending to
demanders of capital.

Financial intermediaries collect large surpluses from a few suppliers of capital and lend those
funds in small amounts to numerous demanders of capital.

A financial intermediary collects funds from the suppliers of capital and then distributes those
funds to the demanders of capital.

 
Financial intermediaries match suppliers of capital with demanders of capital so they can directly
exchange funds.

Parties that underwrite securities are called *

0/2

investment bankers.

 
dealers.

brokers.

stockbrokers

Which of the following statements about securities markets is incorrect: *

2/2

securities are initially placed in the secondary market

 
the keep prices competitive among alternative security investments

they aid in the allocation of capital

they provide liquidity to investors

A newly issued five-year security offered for sale by the issuing firm is classified as trading in
both the *

2/2

primary market and the money market.

primary market and the capital market

 
secondary market and the money market.

secondary market and the capital market.

The major supplier of funds for investment is: *

2/2

HOUSEHOLDS

 
CORPORATIONS & BUSINESS ENTITIES

LOCAL GOVERNMENT

NATIONAL &GOVERNMENT

Markets may be said to be efficient when: *

0/2

there is a continuous market with successive trade at widely varying prices

the market absorbs only small dollar amounts without destabilizing prices

all statements are correct

prices adjust rapidly to new information

 

One of the main purposes of the capital markets is: *

0/2

to provide access to short-term funds

to allocate capital to the most efficient user

to set various interest rates

to provide access to long term funds

Primary determinants of a good security market include all of the following except *

2/2

a physical location.

 
efficient price discovery

transparency.

liquidity.

It would be fair to say that securities markets in the future: *

2/2

will be less automated than today's markets

will be more highly segregated than they are today

will be less efficient

will become more competitive as an international market system develops

MULTIPLE CHOICE PART 2

26 of 26 points

 
1. The key securities traded in the capital markets are bonds & stocks 2.The Eurocurrency
market is a market for short-term bank deposits denominated in U.S. dollars or other easily
convertible currencies. *

2/2

BOTH statements are true

 
BOTH statements are false

1st statement is FALSE

1st statement is TRUE

The sale of a new security directly to an investor or a group of investors is called ________. *

2/2

short selling

a private placement

 
arbitraging

a capital market transaction

You notice in the newspaper that your favorite share is selling at its lowest price in a year. You
decide to purchase 500 shares. Your trade will be conducted in the *

2/2

IPO market

money market.

secondary market

 
primary market

1. Specialists serve as dealers for stocks that are not listed on any exchange. 2. Exchange-
listed stocks never trade over-the-counter. *

2/2

1st statement is FALSE

BOTH statements are true

1st statement is TRUE

BOTH statements are false

1. An efficient market is a market that establishes correct prices for the securities that firms
sell and allocates funds to their most productive use as a result of the intense competition
among investors. 2.The Eurocurrency market is a market for short-term bank deposits
denominated in U.S. dollars or other easily convertible currencies. *

2/2

BOTH statements are false

1st statement is TRUE

BOTH statements are true

 
1st statement is FALSE

The key securities traded in the capital markets are ________. *

2/2

commercial papers and Treasury bills

stocks and bonds

 
Treasury bills and certificates of deposit

bills of exchange and commercial papers

Investment banks are institutions that ________. *

2/2

engage in trading and market making activities

 
are only limited to capital market activities

are exempted from BSP regulations

perform all activities of commercial banks and retail banks

Which of the following serves as an intermediary channeling the savings of individuals,

businesses, and governments into loans and investments? *

2/2

Securities and Exchange Commission

financial markets

financial institutions

 
OTC market

1. A public offering is the sale of a new security issue—typically debt or preferred stock—
directly to an investor or group of investors. 2. A primary market is a financial market in which
pre-owned securities are traded. *

2/2

BOTH statements are false

 
1st statement is FALSE
1st statement is TRUE

BOTH statements are true

1. The issuing firm receives funds when its securities are traded in the secondary market. 2. A
company can have only one IPO.. *

2/2

BOTH statements are true

BOTH statements are false

1st statement is FALSE

 
1st statement is TRUE

1.Securitization is the process of pooling mortgages or other types of loans and selling the
claims or securities against that pool in the secondary market. 2. Subprime mortgages are
mortgage loans made to borrowers with high incomes and better than average credit
histories *

2/2

1st statement is TRUE

 
BOTH statements are true

BOTH statements are false

1st statement is FALSE

Long-term debt instruments used by both government and business are known as ________ *

2/2

bonds

 
T-bills

equities

preferred stocks

1. A market need not be a physical location to be successful. 2. The market for a given
security has breadth if a large volume of orders exist at prices above and below the current
price. *

2/2

BOTH statements are false

BOTH statements are true

 
1st statement is FALSE

1st statement is TRUE

SECTION

0 of 0 points

 
WHAT COURSE *

BSAC 3-2

BSAC 3-1

BSMA 4

 
This form was created inside of CENTRAL LUZON STATE UNIVERSITY.

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