TEST BANK FOR Financial Markets and Institutions 8th Edition by Anthony Saunders, Marcia Millon Cornett, Otgo Erhemjamts ISBN: 978-1260772401 COMPLETE GUIDE ALL CHAPTERS COVERED 100% VERIFIED A+ GRADE ASSURED!!!!NEW LATEST UPDATE!!!!

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,FinancialMarkets AndInstitutions8thEditionAnthony Saunders
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Chapter1 pf




Student name: lc




1) What factors are encouraging financial institutions to offer overlapping financial services su ch
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as banking, investment banking, brokerage, etc.? 1.I. Regulatory changes allowing institution s to
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offer more services
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2.II.Technological improvements reducing the cost ofproviding financial services
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3.III. Increasing competition from full-service global financial institutions
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4.IV.Reduction intheneed to manage risk at financial institutions
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A) Ionly pf




B) IIand III only pf pf lc




C) I, II, and III only
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D) I, II,and IVonly
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E) I, II, III, and IV
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2) IBM creates and sells additional stock to the investment banker Morgan Stanley. Morgan St an
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ley then resells the issue to the U.S. public through its mutual funds.
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This transaction is an example ofa(n):
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A) primary market transaction. pf lc




B) asset transformation byMorganStanley.
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C) moneymarket transaction. pf pf




D) foreignexchange transaction. pf pf




E) forward transaction. lc




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,3) IBM creates and sells additionalstock tothe investment banker MorganStanley. Morgan St an
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ley then resells the issue to the U.S. public through its mutual funds.
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MorganStanley is acting as a(n)
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A) assettransformer.
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B) asset broker. lc




C) government regulator. lc




D) foreignservice representative. pf pf




E) derivativestrader.




4) A corporation seeking to sellnew equitysecurities to the public for the first time in order to r ais
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e cash for capital investment would most likely:
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A) conduct an IPO with the assistance ofan investment banker.
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B) engage ina secondarymarket sale ofequity.
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C) conductaprivate placement to alarge numberofpotentialbuyers.
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D) placeanad inthe Wall Street Journal soliciting retail suppliers of funds.
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E) issue bonds with the assistance ofa dealer.
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5) The largest capitalmarket securityoutstanding in2019 measured bymarket value was:
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A) securitized mortgages. pf




B) corporate bonds. pf




C) municipalbonds.
D) Treasury bonds. pf




E) corporate stocks. pf




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, 6) Thediagram below is a diagramofthe:
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A) secondary markets. pf




B) primary markets. pf




C) moneymarkets. pf




D) derivatives markets. lc




E) commodities markets. lc




7) and
allowa financial intermediaryto offersafe liquid liabilities such as deposits while investin g t
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he depositors' money in riskier illiquid assets.
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A) Diversification; high equityreturns pf pf




B) Price risk; collateral pf pf




C) Free riders; regulations
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D) Monitoring;diversification
E) Primary markets; foreign exchange markets pf pf pf pf




8) Depository institutions include: pf pf




A) banksonly. pf




B) thrifts only. pf




C) finance companies only. pf pf




D) banks and thrifts. pf pf




E) Allofthese choices are correct.
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