TEST BANK
Financial Markets And Institutions 8th Edition Anthony
Saunders.
Version`1 1
,Chapter`1
Student`name:
1) What`factors`are`encouraging`financial`institutions`to`offer`overlapping`financial`services`
such`as`banking,`investment`banking,`brokerage,`etc.?` 1.I.`Regulatory`changes`allowing`instituti
ons`to`offer`more`services
2.II.`Technological`improvements`reducing`the`cost`of`providing`financial`services
3.III.`Increasing`competition`from`full-service`global`financial`institutions
4.IV.`Reduction`in`the`need`to`manage`risk`at`financial`institutions
A) I`only
B) II`and`III`only
C) I,`II,`and`III`only
D) I,`II,`and`IV`only
E) I,`II,`III,`and`IV
2) IBM`creates`and`sells`additional`stock`to`the`investment`banker`Morgan`Stanley.`Morgan`
Stanley`then`resells`the`issue`to`the`U.S.`public`through`its`mutual`funds.
This`transaction`is`an`example`of`a(n):
A) primary`market`transaction.
B) asset`transformation`by`Morgan`Stanley.
C) money`market`transaction.
D) foreign`exchange`transaction.
E) forward`transaction.
Version`1 2
,3) IBM`creates`and`sells`additional`stock`to`the`investment`banker`Morgan`Stanley.`Morgan`
Stanley`then`resells`the`issue`to`the`U.S.`public`through`its`mutual`funds.
Morgan`Stanley`is`acting`as`a(n)
A) asset`transformer.
B) asset`broker.
C) government`regulator.
D) foreign`service`representative.
E) derivatives`trader.
4) A`corporation`seeking`to`sell`new`equity`securities`to`the`public`for`the`first`time`in`order`t
o`raise`cash`for`capital`investment`would`most`likely:
A) conduct`an`IPO`with`the`assistance`of`an`investment`banker.
B) engage`in`a`secondary`market`sale`of`equity.
C) conduct`a`private`placement`to`a`large`number`of`potential`buyers.
D) place`an`ad`in`the` ` Wall`Street`Journal`soliciting`retail`suppliers`of`funds.
E) issue`bonds`with`the`assistance`of`a`dealer.
5) The`largest`capital`market`security`outstanding`in`2019`measured`by`market`value`was:
A) securitized`mortgages.
B) corporate`bonds.
C) municipal`bonds.
D) Treasury`bonds.
E) corporate`stocks.
Version`1 3
, 6) The`diagram`below`is`a`diagram`of`the:
A) secondary`markets.
B) primary`markets.
C) money`markets.
D) derivatives`markets.
E) commodities`markets.
7) and`
allow`a`financial`intermediary`to`offer`safe`liquid`liabilities`such`as`deposits`while`investi
ng`the`depositors'`money`in`riskier`illiquid`assets.
A) Diversification;`high`equity`returns
B) Price`risk;`collateral
C) Free`riders;`regulations
D) Monitoring;`diversification
E) Primary`markets;`foreign`exchange`markets
8) Depository`institutions`include:
A) banks`only.
B) thrifts`only.
C) finance`companies`only.
D) banks`and`thrifts.
E) All`of`these`choices`are`correct.
Version`1 4
Financial Markets And Institutions 8th Edition Anthony
Saunders.
Version`1 1
,Chapter`1
Student`name:
1) What`factors`are`encouraging`financial`institutions`to`offer`overlapping`financial`services`
such`as`banking,`investment`banking,`brokerage,`etc.?` 1.I.`Regulatory`changes`allowing`instituti
ons`to`offer`more`services
2.II.`Technological`improvements`reducing`the`cost`of`providing`financial`services
3.III.`Increasing`competition`from`full-service`global`financial`institutions
4.IV.`Reduction`in`the`need`to`manage`risk`at`financial`institutions
A) I`only
B) II`and`III`only
C) I,`II,`and`III`only
D) I,`II,`and`IV`only
E) I,`II,`III,`and`IV
2) IBM`creates`and`sells`additional`stock`to`the`investment`banker`Morgan`Stanley.`Morgan`
Stanley`then`resells`the`issue`to`the`U.S.`public`through`its`mutual`funds.
This`transaction`is`an`example`of`a(n):
A) primary`market`transaction.
B) asset`transformation`by`Morgan`Stanley.
C) money`market`transaction.
D) foreign`exchange`transaction.
E) forward`transaction.
Version`1 2
,3) IBM`creates`and`sells`additional`stock`to`the`investment`banker`Morgan`Stanley.`Morgan`
Stanley`then`resells`the`issue`to`the`U.S.`public`through`its`mutual`funds.
Morgan`Stanley`is`acting`as`a(n)
A) asset`transformer.
B) asset`broker.
C) government`regulator.
D) foreign`service`representative.
E) derivatives`trader.
4) A`corporation`seeking`to`sell`new`equity`securities`to`the`public`for`the`first`time`in`order`t
o`raise`cash`for`capital`investment`would`most`likely:
A) conduct`an`IPO`with`the`assistance`of`an`investment`banker.
B) engage`in`a`secondary`market`sale`of`equity.
C) conduct`a`private`placement`to`a`large`number`of`potential`buyers.
D) place`an`ad`in`the` ` Wall`Street`Journal`soliciting`retail`suppliers`of`funds.
E) issue`bonds`with`the`assistance`of`a`dealer.
5) The`largest`capital`market`security`outstanding`in`2019`measured`by`market`value`was:
A) securitized`mortgages.
B) corporate`bonds.
C) municipal`bonds.
D) Treasury`bonds.
E) corporate`stocks.
Version`1 3
, 6) The`diagram`below`is`a`diagram`of`the:
A) secondary`markets.
B) primary`markets.
C) money`markets.
D) derivatives`markets.
E) commodities`markets.
7) and`
allow`a`financial`intermediary`to`offer`safe`liquid`liabilities`such`as`deposits`while`investi
ng`the`depositors'`money`in`riskier`illiquid`assets.
A) Diversification;`high`equity`returns
B) Price`risk;`collateral
C) Free`riders;`regulations
D) Monitoring;`diversification
E) Primary`markets;`foreign`exchange`markets
8) Depository`institutions`include:
A) banks`only.
B) thrifts`only.
C) finance`companies`only.
D) banks`and`thrifts.
E) All`of`these`choices`are`correct.
Version`1 4
