Monetary and Non-Monetary Banking Institutions Quiz

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Financial markets are used to match those who want capital to those who do not have it.

False

Stock markets provide financing through the issuance of bonds.

False

Derivatives markets provide instruments for the management of financial risk.

True

Capital markets consist of stock markets, bond markets, and commodity markets.

True Signup and view all the answers

Money markets provide long-term debt financing and investment.

False Signup and view all the answers

Primary markets allow investors to sell securities that they hold or buy existing securities.

False Signup and view all the answers

Banks primarily lend money in the form of loans and mortgages.

True Signup and view all the answers

A company can raise money by selling shares to investors on a commodity market.

False Signup and view all the answers

Financial intermediaries include interbank, stock exchange, and bond market.

False Signup and view all the answers

The purpose of financial markets is to make it difficult for borrowers to find lenders themselves.

False Signup and view all the answers

What is the purpose of financial markets?

To match those who want capital to those who have it Signup and view all the answers

What do capital markets consist of?

Stock markets, which provide financing through the issuance of shares or common stock Signup and view all the answers

What is the function of derivatives markets?

To provide instruments for the management of financial risk Signup and view all the answers

How do banks primarily lend money?

In the form of loans and mortgages Signup and view all the answers

What do foreign exchange markets facilitate?

The trading of foreign exchange Signup and view all the answers

Match the following financial markets with their primary functions:

Stock markets = Provide financing through the issuance of shares or common stock Bond markets = Provide financing through the issuance of bonds Commodity markets = Facilitate the trading of commodities Money markets = Provide short-term debt financing and investment Signup and view all the answers

Match the following types of securities with their respective markets:

Primary markets = Newly formed (issued) securities are bought or sold Secondary markets = Allow investors to sell securities that they hold or buy existing securities Derivatives markets = Provide instruments for the management of financial risk Foreign exchange markets = Facilitate the trading of foreign exchange Signup and view all the answers

Match the following parties involved in financial transactions with their respective categories:

Lenders = Individuals, Companies Financial Intermediaries = Banks, Insurance Companies, Pension Funds, Mutual Funds Financial Markets = Interbank, Stock Exchange, Money Market, Bond Market, Foreign Exchange Borrowers = Individuals, Companies, Central Government, Municipalities, Public Corporations Signup and view all the answers