12 Questions
What is the bid-ask spread?
The difference between the highest price that a buyer is willing to pay and the lowest price that a seller is willing to accept for an asset.
Define credit risk (default risk).
The probability of a financial loss resulting from a borrower's failure to repay a loan.
Explain what a demand instrument is.
A financial instrument that is payable on demand, at sight, or on presentation.
What is the purpose of a debt market?
To facilitate the buying and selling of loan assets.
Describe the characteristics of common stock market.
It represents partial ownership in a company and is the type of stock most individuals buy.
What are derivative instruments?
Financial instruments that derive their performance from an underlying asset.
What is the term used to describe the chance that a company will lose money on international trade due to currency fluctuations?
Foreign exchange risk
Define 'Market Capitalization.'
Market Capitalization is the total dollar market value of all of a company's outstanding shares.
What are Fixed income instruments?
Debt instruments that pay a fixed rate of interest.
Explain the concept of 'Financial Intermediaries.'
Financial intermediaries are institutions that act as middlemen between two parties to facilitate financial transactions.
What is the significance of 'Liquidity' in the financial market?
Liquidity refers to the degree to which a security can be quickly bought or sold in the market at a price reflecting its current value.
Define 'Emerging Markets.'
Emerging Markets are economies that experience significant economic growth and exhibit some characteristics of developed economies.
Explore the world of alternative asset classes, financial assets, asset classes, and bid-ask spreads in this quiz. Test your knowledge on different types of financial instruments and their characteristics.
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