Money, Banking and Financial Markets Midterm Practice Questions

1) Financial markets promote greater economic efficiency by channeling funds from ________ to ________. A) investors; savers B) borrowers; savers C) savers; borrowers D) savers; lenders Correct Answers C) Savers; borrowers 2) Which of the following instruments are traded in a capital market? A) U.S. Government agency securities. B) Negotiable bank CDs. C) Repurchase agreements. D) U.S. Treasury bills. Correct Answers A) U.S. Government agency securities 3) Which of the following instruments are traded in a money market? A) U.S. Government agency bonds. B) Two year Certificate of Deposit. C) Treasury Bonds. D) U.S. Treasury bills. Correct Answers D) U.S. Treasury bills 4) Which of the following instruments are traded in a debt market? A) Municipal Bonds. B) Treasury Bonds. C) Repurchase agreements. D) All of the above. Correct Answers D) All of the above 5) Which of the following can be described as involving direct finance?