TEST BANK
Financial Markets & Institutions, 14th Edition
By Jeff Madura
TU
TO
R
G
U
R
U
, TABLE OF CONTENT
Part 1. Overview of the Financial Environment
1. Role of Financial Markets and Institutions
2. Determination of Interest Rates
3. Structure of Interest Rates
Part 2. The Fed and Monetary Policy
4. Functions of the Fed
5. Monetary Policy
Part 3. Debt Security Markets
6. Money Markets
TU
7. Bond Markets
8. Bond Valuation and Risk
9. Mortgage Markets
Part 4. Equity Markets
10. Stock Offerings and Investor Monitoring
TO
11. Stock Valuation and Risk
12. Market Microstructure and Strategies
Part 5. Derivative Security Markets
13. Financial Futures Markets
14. Option Markets
R
15. Swap Markets
16. Foreign Exchange Derivative Markets
Part 6. Commercial Banking
G
17. Commercial Bank Operations
18. Bank Regulation
19. Bank Management
U
20. Bank Performance
Part 7. Nonbank Operations
21. Thrift Operations
R
22. Finance Company Operations
23. Mutual Fund Operations
U
24. Securities Operations
25. Insurance Operations
26. Pension Fund Operations
Part 8. Emerging Topics
27. Fintech in Financial Markets
,Chapter 01: Role of Financial Markets and Institutions
1. Financial market participants who provide funds are called
a. deficit units.
b. surplus units.
c. primary units.
d. secondary units.
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
TU
LEARNING OBJECTIVES: FMAI.MADU.15.01.01
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
DATE CREATED: 9/15/2016 6:38 AM
DATE MODIFIED: 9/16/2016 1:14 AM
TO
2. Which of the following is NOT an issuer of bonds?
a. households
b. corporations
c. the U.S. Treasury
d. government agencies
R
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
G
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FMAI.MADU.15.01.01
U
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
R
DATE CREATED: 9/16/2016 1:15 AM
DATE MODIFIED: 5/1/2018 11:55 AM
U
3. Behavioral finance
a. applies concepts from sociology and anthropology to the behavior of market participants.
b. studies the behavior of financial markets in response to changes in Federal Reserve policy.
c. applies psychology to financial decision making.
d. explains why markets are efficient.
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
Copyright Cengage Learning. Powered by Cognero. Page 1
, Chapter 01: Role of Financial Markets and Institutions
LEARNING OBJECTIVES: FMAI.MADU.15.01.01
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
DATE CREATED: 9/16/2016 1:18 AM
DATE MODIFIED: 9/16/2016 1:21 AM
4. Those financial markets that facilitate the flow of short-term funds are known as:
a. money markets
b. capital markets
TU
c. primary markets
d. secondary markets
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: Multiple Choice
TO
HAS VARIABLES: False
LEARNING OBJECTIVES: FMAI.MADU.15.01.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.02
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
DATE CREATED: 9/16/2016 1:21 AM
R
DATE MODIFIED: 5/1/2018 11:56 AM
5. Funds are provided to the initial issuer of securities in the:
G
a. secondary market
b. primary market
c. deficit market
U
d. surplus market
ANSWER: b
POINTS: 1
R
DIFFICULTY: Easy
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
U
LEARNING OBJECTIVES: FMAI.MADU.15.01.01
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
DATE CREATED: 9/16/2016 1:24 AM
DATE MODIFIED: 5/1/2018 12:26 PM
6. Which of the following is a capital market instrument?
a. a six-month certificate of deposit
b. a three-month Treasury bill
Copyright Cengage Learning. Powered by Cognero. Page 2
Financial Markets & Institutions, 14th Edition
By Jeff Madura
TU
TO
R
G
U
R
U
, TABLE OF CONTENT
Part 1. Overview of the Financial Environment
1. Role of Financial Markets and Institutions
2. Determination of Interest Rates
3. Structure of Interest Rates
Part 2. The Fed and Monetary Policy
4. Functions of the Fed
5. Monetary Policy
Part 3. Debt Security Markets
6. Money Markets
TU
7. Bond Markets
8. Bond Valuation and Risk
9. Mortgage Markets
Part 4. Equity Markets
10. Stock Offerings and Investor Monitoring
TO
11. Stock Valuation and Risk
12. Market Microstructure and Strategies
Part 5. Derivative Security Markets
13. Financial Futures Markets
14. Option Markets
R
15. Swap Markets
16. Foreign Exchange Derivative Markets
Part 6. Commercial Banking
G
17. Commercial Bank Operations
18. Bank Regulation
19. Bank Management
U
20. Bank Performance
Part 7. Nonbank Operations
21. Thrift Operations
R
22. Finance Company Operations
23. Mutual Fund Operations
U
24. Securities Operations
25. Insurance Operations
26. Pension Fund Operations
Part 8. Emerging Topics
27. Fintech in Financial Markets
,Chapter 01: Role of Financial Markets and Institutions
1. Financial market participants who provide funds are called
a. deficit units.
b. surplus units.
c. primary units.
d. secondary units.
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
TU
LEARNING OBJECTIVES: FMAI.MADU.15.01.01
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
DATE CREATED: 9/15/2016 6:38 AM
DATE MODIFIED: 9/16/2016 1:14 AM
TO
2. Which of the following is NOT an issuer of bonds?
a. households
b. corporations
c. the U.S. Treasury
d. government agencies
R
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
G
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FMAI.MADU.15.01.01
U
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
R
DATE CREATED: 9/16/2016 1:15 AM
DATE MODIFIED: 5/1/2018 11:55 AM
U
3. Behavioral finance
a. applies concepts from sociology and anthropology to the behavior of market participants.
b. studies the behavior of financial markets in response to changes in Federal Reserve policy.
c. applies psychology to financial decision making.
d. explains why markets are efficient.
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
Copyright Cengage Learning. Powered by Cognero. Page 1
, Chapter 01: Role of Financial Markets and Institutions
LEARNING OBJECTIVES: FMAI.MADU.15.01.01
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
DATE CREATED: 9/16/2016 1:18 AM
DATE MODIFIED: 9/16/2016 1:21 AM
4. Those financial markets that facilitate the flow of short-term funds are known as:
a. money markets
b. capital markets
TU
c. primary markets
d. secondary markets
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: Multiple Choice
TO
HAS VARIABLES: False
LEARNING OBJECTIVES: FMAI.MADU.15.01.02
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.02
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
DATE CREATED: 9/16/2016 1:21 AM
R
DATE MODIFIED: 5/1/2018 11:56 AM
5. Funds are provided to the initial issuer of securities in the:
G
a. secondary market
b. primary market
c. deficit market
U
d. surplus market
ANSWER: b
POINTS: 1
R
DIFFICULTY: Easy
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
U
LEARNING OBJECTIVES: FMAI.MADU.15.01.01
NATIONAL STANDARDS: United States - BUSPROG.FMAI.MADU.15.03
STATE STANDARDS: United States - OH - DISC.FMAI.MADU.15.02
KEYWORDS: Bloom's: Knowledge
DATE CREATED: 9/16/2016 1:24 AM
DATE MODIFIED: 5/1/2018 12:26 PM
6. Which of the following is a capital market instrument?
a. a six-month certificate of deposit
b. a three-month Treasury bill
Copyright Cengage Learning. Powered by Cognero. Page 2
