D076 Module 2
Corporate Bonds - ANS A debt instrument that is issued by a corporation in order to raise
capital.
stock - ANS A share of ownership in a corporation.
money market - ANS a type of financial market used for short-term assets that are held for less
than one year
capital market - ANS a type of financial market used for long-term assets that are held for
greater than a year
primary market - ANS A financial market in which new issues of a security are sold to initial
buyers.
syndicate - ANS a group of intermediaries that is used to oversee the issuance of stock and/or
bonds
secondary market - ANS market for reselling financial assets
What is the purpose of financial markets - ANS to determine the market price of financial
securities based on supply and demand and to provide liquidity
money market - ANS is for short-term borrowing/ lending
capital market - ANS is for long-term borrowing/ lending
A specialist - ANS provides liquidity and lowers the cost of trading stocks between sellers and
buyers
In which financial market are securities such as stocks and bonds traded after their initial
issuance? - ANS Secondary market
Money circulates through financial institutions in 2 ways - ANS 1) individuals and organizations
lend and borrow money
2) individuals and organizations purchase financial securities to provide capital to companies
and receive dividends
major types of financial institutions - ANS depository institutions
non depository institutions
securities and investment firms
Corporate Bonds - ANS A debt instrument that is issued by a corporation in order to raise
capital.
stock - ANS A share of ownership in a corporation.
money market - ANS a type of financial market used for short-term assets that are held for less
than one year
capital market - ANS a type of financial market used for long-term assets that are held for
greater than a year
primary market - ANS A financial market in which new issues of a security are sold to initial
buyers.
syndicate - ANS a group of intermediaries that is used to oversee the issuance of stock and/or
bonds
secondary market - ANS market for reselling financial assets
What is the purpose of financial markets - ANS to determine the market price of financial
securities based on supply and demand and to provide liquidity
money market - ANS is for short-term borrowing/ lending
capital market - ANS is for long-term borrowing/ lending
A specialist - ANS provides liquidity and lowers the cost of trading stocks between sellers and
buyers
In which financial market are securities such as stocks and bonds traded after their initial
issuance? - ANS Secondary market
Money circulates through financial institutions in 2 ways - ANS 1) individuals and organizations
lend and borrow money
2) individuals and organizations purchase financial securities to provide capital to companies
and receive dividends
major types of financial institutions - ANS depository institutions
non depository institutions
securities and investment firms
