Financial Markets and Institutions

Chapter 1 Role of Financ ial Ma rkets and Institutions 1. Financial market participants who provide funds are called A) deficit units. B) surplus units. C) primary units. D) secondary units. 2. The main provider(s) of funds to the U.S. Treasury is (are) A) households and businesses. B) foreign financial institutions. C) the Federal Reserve System. D) foreign nonfinancial sectors. 3. The largest deficit unit is (are) A) households and businesses. B) foreign financial institutions. C) the U.S. Treasury. D) foreign nonfinancial sectors. 4. Those financial markets that facilitate the flow of short-term funds are known as A) money markets. B) capital markets. C) primary markets. D) secondary markets. 5. Funds are provided to the initial issuer of securities in the A) secondary market. B) primary market. C) deficit market. D) surplus market. 6. Which of the following is a capital market instrument? A) a six-month CD B) a three-month Treasury bill C) a ten-year bond D) an agreement for a bank to loan funds directly to a company for nine months.