TEST BANK For Financial Markets and Institutions, 8th Edition by Anthony Saunders, Marcia Cornett, All Chapters 1 - 25, Complete Newest Version

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,TEST BANK FOR pp pp




Financial Markets And Institutions 8th Edition Anthony Saunders
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Chapter 1 pp




Student name: pp




1) What factors are encouraging financial institutions to offer overlapping financial
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services such as banking, investment banking, brokerage, etc.? 1.I. Regulatory changes
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allowing institutions to offer more services
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2.II. Technological improvements reducing the cost of providing financial services
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3.III. Increasing competition from full-service global financial institutions
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4.IV. Reduction in the need to manage risk at financial institutions
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A) I only
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B) II and III only
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C) I, II, and III only
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D) I, II, and IV only
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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.
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Morgan Stanley then resells the issue to the U.S. public through its mutual funds.
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This transaction is an example of a(n):
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A) primary market transaction. pp pp



B) asset transformation by Morgan Stanley.
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C) money market transaction. pp pp



D) foreign exchange transaction.
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E) forward transaction. pp




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,3) IBM creates and sells additional stock to the investment banker Morgan Stanley.
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Morgan Stanley then resells the issue to the U.S. public through its mutual funds.
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Morgan Stanley is acting as a(n)
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A) asset transformer.
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B) asset broker.
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C) government regulator. pp



D) foreign service representative.
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E) derivatives trader. pp




4) A corporation seeking to sell new equity securities to the public for the first time in
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order to raise cash for capital investment would most likely:
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A) conduct an IPO with the assistance of an investment banker.
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B) engage in a secondary market sale of equity.
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C) conduct a private placement to a large number of potential buyers.
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D) place an ad in the
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E) issue bonds with the assistance of a dealer.
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5) The largest capital market security outstanding in 2019 measured by market value was:
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A) securitized mortgages. pp



B) corporate bonds. pp



C) municipal bonds. pp



D) Treasury bonds. pp



E) corporate stocks. pp




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, 6) The diagram below is a diagram of the:
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A) secondary markets. pp



B) primary markets. pp


C) money markets. pp



D) derivatives markets. pp


E) commodities markets. pp




7) and allow a financial intermediary to offer safe liquid
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liabilities such as deposits while investing the depositors' money in riskier illiquid assets.
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A) Diversification; high equity returns pp pp pp



B) Price risk; collateral
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C) Free riders; regulations
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D) Monitoring; diversification pp



E) Primary markets; foreign exchange markets
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8) Depository institutions include:
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A) banks only. pp


B) thrifts only. pp



C) finance companies only. pp pp



D) banks and thrifts. pp pp



E) All of these choices are correct.
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