Podcast
Questions and Answers
What is the primary reason for the existence of primary and secondary markets in financial systems?
What is the primary reason for the existence of primary and secondary markets in financial systems?
- To provide a way for deficit units to pay returns to surplus units.
- To ensure that fund managers can charge fees for their services.
- To allow direct matching of surplus and deficit units' preferences.
- To resolve the mismatch in preferences between surplus and deficit units. (correct)
In direct financing, what are the main costs involved for deficit units?
In direct financing, what are the main costs involved for deficit units?
- Supplying funds through managers who charge fees.
- Paying fund manager fees and commissions on IPOs.
- Taking a commission for brokering IPOs.
- Paying returns to surplus units and fees to investment banks. (correct)
Why do financial markets play a role in resolving mismatches between surplus and deficit units?
Why do financial markets play a role in resolving mismatches between surplus and deficit units?
- To ensure that surplus units pay interest to deficit units.
- To encourage direct financing over indirect financing.
- To align the preferences of surplus and deficit units. (correct)
- To eliminate the need for fund managers.
What is one of the primary functions of banks in the context of direct financing?
What is one of the primary functions of banks in the context of direct financing?
How do surplus units typically provide funds in direct financing?
How do surplus units typically provide funds in direct financing?
What is the main reason for fund managers charging fees in direct financing?
What is the main reason for fund managers charging fees in direct financing?
According to the passage, which of the following is a key contribution of behavioural finance to understanding market prices?
According to the passage, which of the following is a key contribution of behavioural finance to understanding market prices?
What is the relationship between volatility and market risk according to the passage?
What is the relationship between volatility and market risk according to the passage?
Which of the following behavioural biases is NOT mentioned in the passage?
Which of the following behavioural biases is NOT mentioned in the passage?
Which of the following is a characteristic of low volatility according to the passage?
Which of the following is a characteristic of low volatility according to the passage?
According to the passage, what is the key purpose of behavioural finance?
According to the passage, what is the key purpose of behavioural finance?
Which of the following is NOT mentioned as a key behavioural bias in the passage?
Which of the following is NOT mentioned as a key behavioural bias in the passage?
What type of financial institutions mainly serve households?
What type of financial institutions mainly serve households?
Which type of financial institutions are authorised by ARPA to undertake banking businesses?
Which type of financial institutions are authorised by ARPA to undertake banking businesses?
Which financial institutions provide financing services to wholesale customers and have largely been taken over by banks?
Which financial institutions provide financing services to wholesale customers and have largely been taken over by banks?
What type of investment vehicles sell 'units' in their trust and then invest their funds?
What type of investment vehicles sell 'units' in their trust and then invest their funds?
Which type of financial institutions provide lease financing for motor vehicles and business equipment?
Which type of financial institutions provide lease financing for motor vehicles and business equipment?
What do fund managers provide in return for fees?
What do fund managers provide in return for fees?
What is the primary role of fund managers in the context of direct financing?
What is the primary role of fund managers in the context of direct financing?
What is the main advantage of crowdfunding as a form of direct financing?
What is the main advantage of crowdfunding as a form of direct financing?
What is the primary market in the context of financial markets?
What is the primary market in the context of financial markets?
What is the role of investment banks in direct financing?
What is the role of investment banks in direct financing?
What is the primary difference between direct financing and traditional financing methods?
What is the primary difference between direct financing and traditional financing methods?
What is the primary cost associated with direct financing for deficit units?
What is the primary cost associated with direct financing for deficit units?
What is the primary reason banks borrow from financial markets?
What is the primary reason banks borrow from financial markets?
How did attitudes towards bank deposits change after the Global Financial Crisis (GFC)?
How did attitudes towards bank deposits change after the Global Financial Crisis (GFC)?
Why do major banks tend not to borrow a lot of equity?
Why do major banks tend not to borrow a lot of equity?
What is typically the main short-term security issued by banks domestically?
What is typically the main short-term security issued by banks domestically?
Why do major banks have a funding advantage over smaller competitors?
Why do major banks have a funding advantage over smaller competitors?
What is the main feature of short-term debt securities?
What is the main feature of short-term debt securities?
