FINANCIAL MARKETS AND INSTITUTIONS ACTUAL TEST QUESTIONS AND SOLUTIONS COMPREHENSIVE REVIEW PACKAGE

FINANCIAL MARKETS AND INSTITUTIONS
ACTUAL TEST QUESTIONS AND SOLUTIONS
COMPREHENSIVE REVIEW PACKAGE

●● The two types of securities that investors most often associate with
capital markets are Blank______ and Blank______.
Answer: stocks; bonds


●● In primary markets, fund users raise new capital through the sale of
Answer: Financial Securities


●● In the secondary market transactions, funds are exchanged with the
help of Blank______ acting as an intermediary between the buyer and
seller of an instrument.
Answer: securities brokers


●● Appreciation" of a foreign currency relative to the U.S. dollar means
that
Answer: each unit of foreign currency is worth more U.S. dollars.


●● econdary markets offer buyers of securities the ability to convert the
securities to cash quickly at fair market value, a characteristic know as
Blank______.

, Answer: liquidity


●● In the U.S., most money market securities are traded "over the
counter" rather than on organized exchanges.
Answer: true


●● Which of the following statements is true regarding derivative
securities?
- They are risk-free.
- Their value is linked to the value of another previously issued security.
correct
- They are money market securities.
- Only governments can issue derivative securities.
Answer: Their value is linked to the value of another previously issued
security.


●● Which of the following is the correct ranking from largest to smallest
dollar value in capital markets in 2021?
- stocks; Treasury securities; mortgages
- mortgages; stocks; corporate bonds
- mortgages; corporate bonds; stocks
- stocks; mortgages; Treasury securities
Answer: stocks; Treasury securities; mortgages