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Questions and Answers
What are securities to the individuals or firms that issue them?
What are securities to the individuals or firms that issue them?
- Investments
- Liabilities (correct)
- Assets
- Stocks
Which of the following is an example of a direct finance instrument?
Which of the following is an example of a direct finance instrument?
- Mutual funds
- Insurance policies
- Bank deposits
- Bonds (correct)
What role do financial intermediaries play in indirect finance?
What role do financial intermediaries play in indirect finance?
- Ensure funds remain idle
- Invest funds in stocks
- Transfer funds directly from lender-savers to borrower-spenders
- Borrow funds from lender-savers to make loans to borrower-spenders (correct)
What is the primary route for moving funds from lenders to borrowers?
What is the primary route for moving funds from lenders to borrowers?
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Which type of market involves the selling of new issues of securities to initial buyers by the borrowing entity?
Which type of market involves the selling of new issues of securities to initial buyers by the borrowing entity?
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What defines the maturity of a debt instrument?
What defines the maturity of a debt instrument?
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What is the main difference between money market and capital market?
What is the main difference between money market and capital market?
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How do financial intermediaries help in reducing transaction costs?
How do financial intermediaries help in reducing transaction costs?
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Which concept refers to turning risky assets into safer assets for investors?
Which concept refers to turning risky assets into safer assets for investors?
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What problem is created by asymmetric information before a financial transaction occurs?
What problem is created by asymmetric information before a financial transaction occurs?
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