FINANCIAL MARKET

CHAPTER 1: OVERVIEW OF FINANCIAL MARKET

1. Definition and function market

1.1. The basis of financial market formation
1.2. Definition of financial market
- Is a place to buy, sell and exchange financial instruments to meet the variety of needs of entities in
the economy
2. Structure
2.1. Based on characteristics of financing

3. Structure of financial market

4. Role of financial market
5. Financial market management and surveillance
6. Ongoing trend of financial market

CHAPTER 2: MONEY MARKET

1.1. definition

- duoc phep giao dich ca cong cu ngan va dai han

1.2. function

- create and provide short term capital to the economy

- create safe and efficient investment environment to participants in the society

- make

1.3. characteristics

2. instruments of money market

+ 2 types

+ discount instrument -

+ yield instrument
Bai tap

Chapter 1

1. In the financial market, funds are mobilized from - lender to spender

2. Which channel is considered as the flow of fund without intermediaries? - direct financing
3. … has more cash income flow than expenditure on consumption in a period of time? – saver
7. In the indirect financial channel – owners of surplus capital do not directly lend to people who lack
capital…

17. which of the following is NOT possible advantage of direct financing? – the amount of mobilized
capital is limited

18. which of the following is NOT a possible advantage of direct financing? – the time of holding the
funds is shorter

8. the major difference between debt market instruments and equity market instruments is - the
maturities

9. aftermarket is another name of - the secondary market

11. New York Stock Exchange is an example of – capital markets

12. in financial markets, financial instruments with maturity less than one year is classified as – short-
term instrument
13. type of financial securities that mature in less than a year are classified as – money market securities

14. mortgages

15. liquidity in financial terms is – the case with which an asset can be sold at a published market price

16. a primary financial market is one that – involve

19. which asset below are financial assets - securities

7. through financial market, government and central bank can stabilize and regulate currency
circulation, which help them… - offset budget,…. All

chapter 2

1. The common point of money instruments is – short-term

2. Which sentence below is true for the common point of money market instrument – all above
3. Which of the following is true when we refer to money market – all of the above
4. Which of the following is NOT true when we refer to money market – money market is…. Long-term
5. Which of the following financial instruments has the lowest risk? – treasury bill (T-bill)
6. Risk free rate (RFR) is often rate of – treasury bill (T - bill)
7. The holder of t bill will not suffer from – default risk
8. Discount instruments are issued at – a price lower than face value
9. Which of the following works as Yield Instrument? – REPO
10. Money market instrument DO NOT include – stocks
11. On which of the following instrument is the rate of return calculated on a “discount basis” – 3 and 5:
commercial paper, commercial bills
12. Commercial paper issued with low interest rate thus commercial papers are categorized as – better
credit rating
13. The main feature that distinguishes certificate of deposit (C.D) from term deposit is -liquidity
14. Which of the financial instruments below is regularly used in international trade?
B. Bankers' Acceptances (B.A)
1. Money market instrument include: - cai nao ko co stock
2. the money market includes: - dai nhat – deposit and lending machine, interbank, open market,
foreign exchange market
3. the aim of deposit and lending market is – to mobilize and provide
4. the aim of open market – to implement
5. the aim of interbank market – to enhance performance
6. which of the following is the characteristic of interbank market – all of the above
7. main activities in interbank market - all of the above
8. In…, the Central Bank purchase Treasury securities with commitment to sell it back at a specified
future date at a predetermined rate – reverse Repo
9. In …, the Central Bank purchase Treasury securities without commitment of reverse transaction in
the future – Outright purchase
10. In …, the Central Bank sell Treasury securities without commitment of
11. In …, the Central Bank sell Treasury securities with commitment to but it back – Repo
12. Which type of transactions create permanent effect on money supply – Outright transaction
13. Which type of transactions can affect the level of money supply temporarily – Repo transaction
15. The aim of open market operations is to undertake

A Monetary policy

B Both of the above

C Fiscal policy

D None of the above

14. In the case of high inflation, the Central Bank should:

A Sell securities on open market
B Implement outright transaction
C Buy securities on open market.
D Implement the expansionary monetary policy
15. When central bank buys securities on Open Market, reserves of commercial banks will...
A Fluctuate
B Remain unchanged
C Decrease
D Increase
16. What is the main reason of high inflation?
A The neglect government who lets their money demand grow too fast
B The neglect government who lets their money demand drop too fast
C The neglect government who lets their money supply drop too fast
D The neglect government who lets their money supply grow too fast
17. Contractionary monetary policy can be implemented by:
A Buying Treasurys from member bank.
B Buying corporate bonds
C Selling Treasurys to member bank.
D Selling corporate bonds
18. Interbank market is the financial system among
A Treasury and commercial banks
B Banks and financial institutions
C Investors
D Individual investors and banks
19. Expansionary monetary policy can be implemented by:
A Buying Treasurys from member bank.
B Buying corporate bonds
C Selling corporate bonds
D Selling Treasurys to member bank.
20. Which instrument can be traded on O.M.O?
A Certificate of Deposit (C.D)
B Treasury bond (T-bond)
C Municipal bond
D All of the above
Chapter 3:
1. When issue this type of shares, the company is required to pay any unpaid preference share
dividends from past years before it can make any distribution to ordinary shareholders.
A Cumulative preference share
B Participating preference share
C Convertible preference share
D Non-cumulative preference share

2. Dividend per share is

A Adjust to inflation
B Remain unchanged even though the company is not profitable
C Fixed by issuer
D Determined by the company's board of directors.

3. The maximum number of shares that a corporation is legally permitted to issue is:
A Registered shares
B Treasury shares
C Authorized shares
D Issued shares

4. Which type of shares is given the opportunity to share in excess profit generated by the
company?
A Participating preference share
B Convertible preference share
C Cumulative preference share
D Non-cumulative preference share
5. What is NOT the effect of stock dividend?
A Increase the percentage ownership of shareholder
B Increase the number of share outstanding
C Decrease share price
D Keep the total assets remain unchanged
6. Outstanding share is:
A. A type of shares which had been issued but have been repurchased by the corporation
B. The maximum number of shares that a corporation is legally permitted to issue, as specified in
its articles of incorporation.
C The number of shares hold by the public
D The number of shares are sold to the public
7. Treasury share is
A. The maximum number of shares that a corporation is legally permitted to issue, as specified
in its articles of incorporation.
B. A type of shares which had been issued but have been repurchased by corporation
C. A type of shares which is issued by the Government other than the corporation.
D The number of shares are sold to the public
8. Which of the following statements is true in case of stock dividend?
A Retain earnings is unchanged
B Proportion of shareholders in the company increases
C Contributed capital increases
D Cash increases
9. Why do we describe preference shares as a hybrid security?
A Because preference shares have priority on the remain assets of company
B Because preference shares are more preferred by investors
C Because preference shares are issued in a short period of time
D Because preference shares have features of two different financial instruments: bond and
stock
10. Which sentence below is true about preference share?
A Preferred stock usually carries no voting rights
B Preferred stocks are senior to common stocks, but are subordinate to bonds
C All of the above
D Preferred stocks carry fixed dividends and may have priority over common stock in the
payment of dividends and upon liquidation.
11. Which of the following statements is true in case of stock dividend?
A Owners' equity increases
B Proportion of shareholders in the company increases
C Total assets increases
D Number of outstanding shares increases
12. What is the face value of an ordinary share in an initial public offering in Vietnam?
A 100,000 VND
B 10,000 VND
C 1,000 VND
D Can be any value
13. When do company issue shares for non-cash through stock dividend?
1. The company's availability of liquid cash is in short supply
2. The company want to capitalize a portion of retained earnings
3. The company want to increase the number of outstanding shares in the market
4.The company want to increase the share price for better reputation
A 1 and 2
B 1,2,3 and 4
C 2 and 3
D 1, 2 and 3
14. This sentence is true for which type of shares? "If a company is unable to pay dividend in one
period, the amount due is carried forward to the next period".
A Convertible preference share
B Non-cumulative preference share
C Cumulative preference share
D Participating preference share
15. What is the effect of transferring from development investment fund, capital surplus and other
reserve fund to contributed capital?
 A Increase total capital
B Increase charter capital
C Increase number of share outstanding
D Increase total assets
16. Number of outstanding shares plus treasury shares equal to
A Authorized shares
B Issued shares
C Preference shares
D Ordinary shares
17. Authorized share is:
A. The maximum number of shares that a corporation is legally permitted to issue, as specified
in its articles of incorporation
B. A type of shares which had been issued but have been repurchased by the corporation
C. The number of shares are sold to the public
D. The number of shares hold by the public
18. Based on the claim of the shareholder, equity can be categorized into
A Outstanding share and treasury share
B Ordinary share and preference share
C Registered share and bearer share
D Authorized share and issued share
19. What is preemptive right?
A The right to be informed by the company regarding any information or development that
might influence its share price and dividend payout
B The right to remaining assets
C The right to receive dividend
D Allow current shareholder to purchase proportionate number of share in any new offering in
order to maintain their ownership in the company
20. ... are shares where the right of certain preference shareholders to participate in profits after a
specified fixed dividend contracted for is paid is given.
A Non-participating preference shares
B Non-cumulative preference shares
C Cumulative preference shares
D Participating preference shares
21. In case a company issues stock for cash, which items will rise?
A Shareholders' equity
B a, b &c
C Outstanding shares
D Cash
22. What is not the advantage of preference shares?
A Priority over ordinary shares in term of claim to a company's assets and earnings
B Priority over ordinary shares in term of voting right
C Priority over ordinary shares in term of dividend payment
D Priority over ordinary shares in term of payment upon liquidation
23. .... entitles the company to buy back the preference shares on a predetermined date and the
holder to receive the specified the preference share in a cash payment.
A Participating preference share
B Convertible preference share
C Redeemable preference share
D Cumulative preference share
24. An equity market is defined as a market which issue and trade ....
A Financial instruments
B Debt securities
C Loans
D Shares
25. When do company issue share for non-cash through stock split?
A. The company wants to decrease the share price to increase the liquidity of stock
B. The company wants to increase the share price to strengthen company's reputation
C. The company wants to capitalize a portion of retained earnings
D. The company's availability of liquid cash is in short supply
26. What is not the reason for the fact that book value almost never equal to market value?
A Assets are listed on the balance sheet at market price.
B Companies have discretion over how quickly or how slowly they record depreciation
C A company that holds a lot of real estate on its balance sheet will likely have a net book value
far below its market value
D Assets are listed on the balance sheet at cost, meaning their balance sheet value is not
updated as prices change.
27. .... is the value at which an asset is carried on a balance sheet or the total value of the
company's assets that shareholders would theoretically receive if a company were liquidated
A Market value
B Intrinsic value
C Book value
D Face value
28. Issued share is:
A The maximum number of shares that a corporation is legally permitted to issue, as specified in
its articles of incorporation.
B The number of shares hold by the public
C A type of shares which had been issued but have been repurchased by the corporation
D The number of shares sold to the public
29. Which characteristic does not belong to stock?
A Residual claim and limited liability
B Have certain maturity
C Entitle the holder to ownership of the company
D No limit on the amount of dividends that can be paid
30. In case of stock dividend, which items will rise?
A Shareholders' equity
B Proportion of shareholder
C Number of outstanding shares
 D Cash
31. ....are the shares which are bought back by the issuing company.
A Outstanding shares
B Issued shares
C Treasury shares
D Authorized shares
32. …. Is an investor who is willing to take on additional risk for an investment that has a relatively
low adđitional expected return in exchange for that risk. Risk lover