D076 MODULE 2 QUESTIONS &
ANSWERS(RATED A)
Corporate Bonds - ANSWERA debt instrument that is issued by a corporation in order
to raise capital.
stock - ANSWERA share of ownership in a corporation.
money market - ANSWERa type of financial market used for short-term assets that are
held for less than one year
capital market - ANSWERa type of financial market used for long-term assets that are
held for greater than a year
primary market - ANSWERA financial market in which new issues of a security are sold
to initial buyers.
syndicate - ANSWERa group of intermediaries that is used to oversee the issuance of
stock and/or bonds
secondary market - ANSWERmarket for reselling financial assets
What is the purpose of financial markets - ANSWERto determine the market price of
financial securities based on supply and demand and to provide liquidity
money market - ANSWERis for short-term borrowing/ lending
capital market - ANSWERis for long-term borrowing/ lending
A specialist - ANSWERprovides liquidity and lowers the cost of trading stocks between
sellers and buyers
In which financial market are securities such as stocks and bonds are traded after their
initial issuance? - ANSWERSecondary market
Money circulates through financial institutions in 2 ways - ANSWER1) individuals and
organizations lend and borrow money
2) individuals and organizations purchase financial securities to provide capital to
companies and receive dividends
major types of financial institutions - ANSWERdepository institutions
non depository institutions
securities and investment firms
ANSWERS(RATED A)
Corporate Bonds - ANSWERA debt instrument that is issued by a corporation in order
to raise capital.
stock - ANSWERA share of ownership in a corporation.
money market - ANSWERa type of financial market used for short-term assets that are
held for less than one year
capital market - ANSWERa type of financial market used for long-term assets that are
held for greater than a year
primary market - ANSWERA financial market in which new issues of a security are sold
to initial buyers.
syndicate - ANSWERa group of intermediaries that is used to oversee the issuance of
stock and/or bonds
secondary market - ANSWERmarket for reselling financial assets
What is the purpose of financial markets - ANSWERto determine the market price of
financial securities based on supply and demand and to provide liquidity
money market - ANSWERis for short-term borrowing/ lending
capital market - ANSWERis for long-term borrowing/ lending
A specialist - ANSWERprovides liquidity and lowers the cost of trading stocks between
sellers and buyers
In which financial market are securities such as stocks and bonds are traded after their
initial issuance? - ANSWERSecondary market
Money circulates through financial institutions in 2 ways - ANSWER1) individuals and
organizations lend and borrow money
2) individuals and organizations purchase financial securities to provide capital to
companies and receive dividends
major types of financial institutions - ANSWERdepository institutions
non depository institutions
securities and investment firms
