PlusBay.Plus
,TEST BANK FOR zl zl
Financial Markets And Institutions 8th Edition Anthony Saunders
zl zl zl zl zl zl zl
Chapter 1 zl
Student name: zl
1) What factors are encouraging financial institutions to offer overlapping financial services su
zl zl zl zl zl zl zl zl zl zl zl
ch as banking, investment banking, brokerage, etc.? 1.I. Regulatory changes allowing institution
zl zl zl zl zl zl z l zl zl zl zl
s to offer more services
zl zl zl zl
2.II. Technological improvements reducing the cost of providing financial services
zl zl zl zl zl zl zl zl zl
3.III. Increasing competition from full-service global financial institutions
zl zl zl zl zl zl zl
4.IV. Reduction in the need to manage risk at financial institutions
zl zl zl zl zl zl zl zl zl zl
A) I only zl
B) II and III onlyzl zl zl
C) I, II, and III only
zl zl zl zl
D) I, II, and IV only
zl zl zl zl
E) I, II, III, and IV
zl zl zl zl
2) IBM creates and sells additional stock to the investment banker Morgan Stanley. Morgan St
zl zl zl zl zl zl zl zl zl zl zl zl zl
anley then resells the issue to the U.S. public through its mutual funds.
zl zl zl zl zl zl zl zl zl zl zl zl
This transaction is an example of a(n):
zl zl zl zl zl zl
A) primary market transaction. zl zl
B) asset transformation by Morgan Stanley.
zl zl zl zl
C) money market transaction. zl zl
D) foreign exchange transaction. zl zl
E) forward transaction. zl
Version 1 zl 1
PlusBay.Plus
,3) IBM creates and sells additional stock to the investment banker Morgan Stanley. Morgan St
zl zl zl zl zl zl zl zl zl zl zl zl zl
anley then resells the issue to the U.S. public through its mutual funds.
zl zl zl zl zl zl zl zl zl zl zl zl
Morgan Stanley is acting as a(n)
zl zl zl zl zl
A) asset transformer.
zl
B) asset broker.
zl
C) government regulator. zl
D) foreign service representative.
zl zl
E) derivatives trader. zl
4) A corporation seeking to sell new equity securities to the public for the first time in order to r
zl zl zl zl zl zl zl zl zl zl zl zl zl zl zl zl zl zl
aise cash for capital investment would most likely:
zl zl zl zl zl zl zl
A) conduct an IPO with the assistance of an investment banker.
zl zl zl zl zl zl zl zl zl
B) engage in a secondary market sale of equity.
zl zl zl zl zl zl zl
C) conduct a private placement to a large number of potential buyers.
zl zl zl zl zl zl zl zl zl zl
D) place an ad in the Wall Street Journal soliciting retail suppliers of funds.
zl zl zl zl z l z l zl zl zl zl zl zl zl
E) issue bonds with the assistance of a dealer.
zl zl zl zl zl zl zl
5) The largest capital market security outstanding in 2019 measured by market value was:
zl zl zl zl zl zl zl zl zl zl zl zl
A) securitized mortgages. zl
B) corporate bonds. zl
C) municipal bonds. zl
D) Treasury bonds. zl
E) corporate stocks. zl
Version 1 zl 2
PlusBay.Plus
, 6) The diagram below is a diagram of the:
zl zl zl zl zl zl zl
A) secondary markets. zl
B) primary markets. zl
C) money markets. zl
D) derivatives markets. zl
E) commodities markets. zl
7) and zl
allow a financial intermediary to offer safe liquid liabilities such as deposits while investin
zl zl zl zl zl zl zl zl zl zl zl zl zl
g the depositors' money in riskier illiquid assets.
zl zl zl zl zl zl zl
A) Diversification; high equity returns zl zl zl
B) Price risk; collateral zl zl
C) Free riders; regulations
zl zl
D) Monitoring; diversification zl
E) Primary markets; foreign exchange markets zl zl zl zl
8) Depository institutions include: zl zl
A) banks only. zl
B) thrifts only. zl
C) finance companies only. zl zl
D) banks and thrifts. zl zl
E) All of these choices are correct.
zl zl zl zl zl
Version 1 zl 3
PlusBay.Plus
,TEST BANK FOR zl zl
Financial Markets And Institutions 8th Edition Anthony Saunders
zl zl zl zl zl zl zl
Chapter 1 zl
Student name: zl
1) What factors are encouraging financial institutions to offer overlapping financial services su
zl zl zl zl zl zl zl zl zl zl zl
ch as banking, investment banking, brokerage, etc.? 1.I. Regulatory changes allowing institution
zl zl zl zl zl zl z l zl zl zl zl
s to offer more services
zl zl zl zl
2.II. Technological improvements reducing the cost of providing financial services
zl zl zl zl zl zl zl zl zl
3.III. Increasing competition from full-service global financial institutions
zl zl zl zl zl zl zl
4.IV. Reduction in the need to manage risk at financial institutions
zl zl zl zl zl zl zl zl zl zl
A) I only zl
B) II and III onlyzl zl zl
C) I, II, and III only
zl zl zl zl
D) I, II, and IV only
zl zl zl zl
E) I, II, III, and IV
zl zl zl zl
2) IBM creates and sells additional stock to the investment banker Morgan Stanley. Morgan St
zl zl zl zl zl zl zl zl zl zl zl zl zl
anley then resells the issue to the U.S. public through its mutual funds.
zl zl zl zl zl zl zl zl zl zl zl zl
This transaction is an example of a(n):
zl zl zl zl zl zl
A) primary market transaction. zl zl
B) asset transformation by Morgan Stanley.
zl zl zl zl
C) money market transaction. zl zl
D) foreign exchange transaction. zl zl
E) forward transaction. zl
Version 1 zl 1
PlusBay.Plus
,3) IBM creates and sells additional stock to the investment banker Morgan Stanley. Morgan St
zl zl zl zl zl zl zl zl zl zl zl zl zl
anley then resells the issue to the U.S. public through its mutual funds.
zl zl zl zl zl zl zl zl zl zl zl zl
Morgan Stanley is acting as a(n)
zl zl zl zl zl
A) asset transformer.
zl
B) asset broker.
zl
C) government regulator. zl
D) foreign service representative.
zl zl
E) derivatives trader. zl
4) A corporation seeking to sell new equity securities to the public for the first time in order to r
zl zl zl zl zl zl zl zl zl zl zl zl zl zl zl zl zl zl
aise cash for capital investment would most likely:
zl zl zl zl zl zl zl
A) conduct an IPO with the assistance of an investment banker.
zl zl zl zl zl zl zl zl zl
B) engage in a secondary market sale of equity.
zl zl zl zl zl zl zl
C) conduct a private placement to a large number of potential buyers.
zl zl zl zl zl zl zl zl zl zl
D) place an ad in the Wall Street Journal soliciting retail suppliers of funds.
zl zl zl zl z l z l zl zl zl zl zl zl zl
E) issue bonds with the assistance of a dealer.
zl zl zl zl zl zl zl
5) The largest capital market security outstanding in 2019 measured by market value was:
zl zl zl zl zl zl zl zl zl zl zl zl
A) securitized mortgages. zl
B) corporate bonds. zl
C) municipal bonds. zl
D) Treasury bonds. zl
E) corporate stocks. zl
Version 1 zl 2
PlusBay.Plus
, 6) The diagram below is a diagram of the:
zl zl zl zl zl zl zl
A) secondary markets. zl
B) primary markets. zl
C) money markets. zl
D) derivatives markets. zl
E) commodities markets. zl
7) and zl
allow a financial intermediary to offer safe liquid liabilities such as deposits while investin
zl zl zl zl zl zl zl zl zl zl zl zl zl
g the depositors' money in riskier illiquid assets.
zl zl zl zl zl zl zl
A) Diversification; high equity returns zl zl zl
B) Price risk; collateral zl zl
C) Free riders; regulations
zl zl
D) Monitoring; diversification zl
E) Primary markets; foreign exchange markets zl zl zl zl
8) Depository institutions include: zl zl
A) banks only. zl
B) thrifts only. zl
C) finance companies only. zl zl
D) banks and thrifts. zl zl
E) All of these choices are correct.
zl zl zl zl zl
Version 1 zl 3
PlusBay.Plus
