Financial Services Sector Overview

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Questions and Answers

What is the core role that the financial services sector performs within the economy?

  • Providing employment opportunities
  • Regulating global financial markets
  • Allocating capital from savers to businesses (correct)
  • Facilitating international trade

How does the investment chain benefit savers and businesses?

  • By limiting the growth opportunities for businesses
  • By discouraging savings and promoting excessive borrowing
  • By enabling savers to invest in businesses for potential returns (correct)
  • By weakening the competitiveness of financial markets

What happens if the investment chain is inefficient?

  • Financial markets become more competitive
  • Savers lose their invested capital
  • Uninvested capital remains unallocated (correct)
  • Businesses experience rapid growth

How does the financial services sector contribute to raising productivity?

<p>By allocating capital to growing enterprises (B)</p> Signup and view all the answers

Why is the efficiency of the investment chain critical?

<p>To allocate uninvested capital to productive businesses (C)</p> Signup and view all the answers

In what way does the financial services sector enhance the competitiveness of financial markets globally?

<p>By improving the allocation of capital through the investment chain (D)</p> Signup and view all the answers

Which documents are required to be lodged when forming a company in the UK?

<p>A Memorandum of Association and Articles of Association (A)</p> Signup and view all the answers

What is the key difference between private companies and public companies according to the text?

<p>Public companies have 'plc' in their names, while private companies have 'limited' or 'ltd'. (D)</p> Signup and view all the answers

Which authority should you lodge the Articles of Incorporation with in the US?

<p>Secretary of State office (A)</p> Signup and view all the answers

What is the significance of having 'plc' in the name of a UK company?

<p>It signifies that the company is publicly listed on a stock exchange. (A)</p> Signup and view all the answers

What type of companies can issue shares to the public?

<p>Public companies only (D)</p> Signup and view all the answers

What is the main difference between HSBC Holdings and Virgin Holdings with regards to stock exchanges?

<p>HSBC Holdings is listed on multiple stock exchanges, while Virgin Holdings is not listed on any stock exchange. (B)</p> Signup and view all the answers

In the context of shareholder liability, what does it mean to have limited liability?

<p>Shareholders are only liable for the amount they agreed to pay to the company on initial subscription. (C)</p> Signup and view all the answers

What is the common characteristic of ordinary shares, common shares, and common stock?

<p>They carry the full risk and reward of investing in a company. (D)</p> Signup and view all the answers

What gives shareholders the power to vote yes or no on resolutions proposed by company directors at meetings?

<p>Ownership of ordinary shares (A)</p> Signup and view all the answers

How are dividends declared by companies related to shareholders?

<p>Dividends need to be ratified by shareholders before being declared as payable. (C)</p> Signup and view all the answers

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