C201 PRACTICE EXAM QUESTIONS AND VERIFIED
ANSWERS
One of the most important variables that determine how much a person saves is
the person's age
The difference between the value of what you own and what you currently owe is called
Net worth
Funds can be transferred between savers and users in two ways:
Directly and indirectly
The Roxy Bank of Englewood pools customer deposits and uses the funds to make loans
to businesses and households. These businesses and households, now known as the
borrowers, pay the bank interest, and the bank, in turn, pays depositors interest for the
use of their money. Which of the following would best describe the process used by the
bank?
Indirect transfer
_______, also called financial instruments, represent obligations on the part of the
issuers—businesses and governments—to provide the purchasers with expected or stated
returns on the funds invested or loaned.
Securities
All of the following are types of securities EXCEPT
Cash
_____ are short-term debt securities issued by governments, financial institutions, and
corporations.
Money Market Instruments
, Amanda buys a money market instrument. It will mature within, at most,
1 year
Treasury bills have a minimum denomination of
1,000
Two types of municipal bonds exist. What are they?
Revenue bonds and general obligation bonds
Corporate bonds are a diverse group and often vary based on the _____ that backs it.
Collateral
When a company needs capital to purchase inventory, expand a plant, make major
investments, acquire another firm, or pursue other business goals, it may sell a bond or
stock issue to the investing public. This is done in the ______ market.
Primary
Daily trading on the AMEX market is _____ shares.
Less than 100 million
The _____ involves the direct trading of exchange-listed stocks off the floor of the
exchange (in the case of NYSE-listed stocks) or outside the network (in the case of
NASDAQ-listed stocks).
Fourth Market
Which of these connect major brokerages and individual traders virtually using the
Internet, so that trades can be made directly without going through an intermediary?
Electronic communications networks
The ______ order instructs the broker to obtain the best possible price—the highest price
when selling and the lowest price when buying.
ANSWERS
One of the most important variables that determine how much a person saves is
the person's age
The difference between the value of what you own and what you currently owe is called
Net worth
Funds can be transferred between savers and users in two ways:
Directly and indirectly
The Roxy Bank of Englewood pools customer deposits and uses the funds to make loans
to businesses and households. These businesses and households, now known as the
borrowers, pay the bank interest, and the bank, in turn, pays depositors interest for the
use of their money. Which of the following would best describe the process used by the
bank?
Indirect transfer
_______, also called financial instruments, represent obligations on the part of the
issuers—businesses and governments—to provide the purchasers with expected or stated
returns on the funds invested or loaned.
Securities
All of the following are types of securities EXCEPT
Cash
_____ are short-term debt securities issued by governments, financial institutions, and
corporations.
Money Market Instruments
, Amanda buys a money market instrument. It will mature within, at most,
1 year
Treasury bills have a minimum denomination of
1,000
Two types of municipal bonds exist. What are they?
Revenue bonds and general obligation bonds
Corporate bonds are a diverse group and often vary based on the _____ that backs it.
Collateral
When a company needs capital to purchase inventory, expand a plant, make major
investments, acquire another firm, or pursue other business goals, it may sell a bond or
stock issue to the investing public. This is done in the ______ market.
Primary
Daily trading on the AMEX market is _____ shares.
Less than 100 million
The _____ involves the direct trading of exchange-listed stocks off the floor of the
exchange (in the case of NYSE-listed stocks) or outside the network (in the case of
NASDAQ-listed stocks).
Fourth Market
Which of these connect major brokerages and individual traders virtually using the
Internet, so that trades can be made directly without going through an intermediary?
Electronic communications networks
The ______ order instructs the broker to obtain the best possible price—the highest price
when selling and the lowest price when buying.
