A derivative B. secondary C. primary D. monetary instruments alternative mechanisms of fundraising financing A. direct, indirect

A) The predicted return is satisfactory for taking a risk
B) There are any true speculations
C) There are no safe options except for holding cash
D) The return is short
46.In Capital Market Line every investment is
A) Infinitely divisible
B) finitely divisible
C) Both a & b
D) None of the above
47.Investments would score high only if there is a protection to
A) Government bonds
B) Preferred stock
C) Real estate
D) Common stock
1. !Financial markets and institutions
(a) !involve the movement of huge quantities of money.
(b) !affect the profits of businesses.
(c) !affect the types of goods and services produced in an economy.
(d) !do all of the above.
(e) !do only (a) and (b) of the above.
Answer: D
2. !Financial market activities affect
(a) !personal wealth.
(b) !spending decisions by individuals and business firms.
(c) !the economy’s location in the business cycle.
(d) !all of the above.
Answer: !D
3. !Markets in which funds are transferred from those who have excess funds available to
those who have a shortage of available funds are called
(a) !commodity markets.
(b) !funds markets.
(c) !derivative exchange markets.
(d) !financial markets.
Answer: !D
Chapter 1
Why Study Financial Markets and Institutions?
!Multiple Choice Questions
1. !Financial markets and institutions
(a) !involve the movement of huge quantities of money.
(b) !affect the profits of businesses.
(c) !affect the types of goods and services produced in an economy.
(d) !do all of the above.
(e) !

1. !Financial markets and institutions

(a) !involve the movement of huge quantities of money.
(b) !affect the profits of businesses.
(c) !affect the types of goods and services produced in an economy.
(d) !do all of the above.
(e) !do only (a) and (b) of the above.
Answer: D
2. !Financial market activities affect
(a) !personal wealth.
(b) !spending decisions by individuals and business firms.
(c) !the economy’s location in the business cycle.
(d) !all of the above.
Answer: !D
3. !Markets in which funds are transferred from those who have excess funds available to
those who have a shortage of available funds are called
(a) !commodity markets.
(b) !funds markets.
(c) !derivative exchange markets.
(d) !financial markets.
Answer: !D
1. !Financial markets and institutions
(a) !involve the movement of huge quantities of money.
(b) !affect the profits of businesses.
(c) !affect the types of goods and services produced in an economy.
(d) !do all of the above.
(e) !do only (a) and (b) of the above.
Answer: D
2. !Financial market activities affect
(a) !personal wealth.
(b) !spending decisions by individuals and business firms.
(c) !the economy’s location in the business cycle.
(d) !all of the above.
Answer: !D
3. !Markets in which funds are transferred from those who have excess funds available to
those who have a shortage of available funds are called
(a) !commodity markets.
(b) !funds markets.
(c) !derivative exchange markets.
(d) !financial markets.
Answer: !D
1. !Financial markets and institutions
(a) !involve the movement of huge quantities of money.
(b) !affect the profits of businesses.
(c) !affect the types of goods and services produced in an economy.
(d) !do all of the above.
(e) !do only (a) and (b) of the above.
Answer: D
2. !Financial market activities affect
(a) !personal wealth.
(b) !spending decisions by individuals and business firms.
(c) !the economy’s location in the business cycle.
(d) !all of the above.
Answer: !D
3. !Markets in which funds are transferred from those who have excess funds available to
those who have a shortage of available funds are called
(a) !commodity markets.
(b) !funds markets.
(c) !derivative exchange markets.
(d) !financial markets.
Answer: !D
1. !Financial markets and institutions
(a) !involve the movement of huge quantities of money.
(b) !affect the profits of businesses.
(c) !affect the types of goods and services produced in an economy.
(d) !do all of the above.
(e) !do only (a) and (b) of the above.
Answer: D
2. !Financial market activities affect
(a) !personal wealth.
(b) !spending decisions by individuals and business firms.
(c) !the economy’s location in the business cycle.
(d) !all of the above.
Answer: !D
3. !Markets in which funds are transferred from those who have excess funds available to
those who have a shortage of available funds are called
(a) !commodity markets.
(b) !funds markets.
(c) !derivative exchange markets.
(d) !financial markets.
Answer: !D
1. !Financial markets and institutions
(a) !involve the movement of huge quantities of money.
(b) !affect the profits of businesses.
(c) !affect the types of goods and services produced in an economy.
(d) !do all of the above.
(e) !do only (a) and (b) of the above.
Answer: D
2. !Financial market activities affect
(a) !personal wealth.
(b) !spending decisions by individuals and business firms.
(c) !the economy’s location in the business cycle.
(d) !all of the above.
Answer: !D
3. !Markets in which funds are transferred from those who have excess funds available to
those who have a shortage of available funds are called
(a) !commodity markets.
(b) !funds markets.
(c) !derivative exchange markets.
(d) !financial markets.
Answer: !D
48 _______ is a link between savers & borrowers, helps to establish a link between savers & investors