Financial Market Essay

3954 Words Oct 22nd, 2013 16 Pages
Student: ___________________________________________________________________________


The exchange of goods and services is made more efficient by: A. barters. B. money. C. governments. D. some combination of government transfer and barter. Short selling is: A. the sale of a financial product at a discount to its current market value. B. the sale of a financial product in small quantities. C. the sale of a financial product that the seller does not own. D. the sale of a financial product where the seller agrees to buy it back at a predetermined price. The term ‘medium of exchange' for money refers to its use as: A. coinage. B. currency. C. something that is widely accepted as payment for goods and services. D. any standard of
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D. by reducing their costs relative to their incomes.









A savings-surplus unit is an entity: A. that needs to borrow funds from a surplus unit. B. which has an income that exceeds its spending. C. whose spending exceeds its income. D. called a company.

10. The process of facilitating the flow of funds between borrowers and lenders performed by the financial system: A. is hindered by the problem of ‘double coincidence of wants'. B. greatly reduces the probability of inflation. C. increases the rate of economic growth of a country. D. occurs only through financial intermediaries. 11. Both real and financial assets have four principal attributes that are significant factors in the investment decision process. These are: I. liquidity II. capital gain III. risk IV. return or yield V. time pattern of future cash flows VI. price and cash flow volatility A. I, II, III, IV B. I, III, IV, V C. I, III, IV, VI D. II, III, IV, V 12. Which of the following is NOT associated with characteristics of shares? A. Part ownership of a company B. Capital gains C. A fixed interest payment D. Dividends 13. A financial institution that obtains most of its funds from deposits is a/an: A. investment bank. B. unit trust. C. commercial bank. D. general insurer. 14. Institutions that specialise in off-balance-sheet advisory services are called: A. depository financial institutions. B. contractual institutions. C. finance companies. D.

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