COPY: Financial Markets Quiz
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Questions and Answers

What is a financial market?

  • A market where physical goods are traded at high transaction costs
  • A market where physical goods are traded at low transaction costs
  • A market where financial securities are traded at low transaction costs (correct)
  • A market where financial securities are traded at high transaction costs
  • What is the primary purpose of financial markets?

  • To facilitate the trade of physical goods
  • To predict future changes in the stock market
  • To control risk
  • To raise finances (correct)
  • What are derivative products?

  • Physical products that are used to control risk or exploit risk
  • Physical products that are used to raise finances
  • Financial products that are used to control risk or exploit risk (correct)
  • Financial products that are used to raise finances
  • What is technical analysis?

    <p>The basis of attempting to predict future changes in the stock market</p> Signup and view all the answers

    What is volatility?

    <p>The scale of changes in price over some unit of time</p> Signup and view all the answers

    What is the difference between the primary market and the secondary market?

    <p>Primary market is where newly started companies issue shares to the public for the first time through IPO, while secondary market is where second hand securities are sold</p> Signup and view all the answers

    What is the purpose of capital markets?

    <p>To gain long-term funding to support expansion</p> Signup and view all the answers

    Who can borrow by issuing bonds?

    <p>Governments, municipalities and local authorities, and corporations</p> Signup and view all the answers

    What is the trading basis for currencies and bonds?

    <p>They are traded on a bilateral basis</p> Signup and view all the answers

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