Financial Markets Introduction

What is the correct formula for saving?

• Savings = income + expenses

• savings = income - expenses

• saving = expenses - saving

• saving = income + saving

Which of the following commonly refers to the technique of spreading funds over a large number of investments to reduce the portfolio's overall risk?

• diversification

• mutual funds

• bear markets

• pension plans

What best refers to the length of time a person needs to work at a company before they can take the employer's matching contribution?

• mutual funds

• 401(k) plans

• diversification

• vesting

What best refers to the institutions such as banks that collect funds from savers that can be loaned to borrowers?

• financial intermediaries

• financial assets

• dividends

• Credit Unions

What best represents a member-owned financial cooperative that accepts deposits, makes loans, and provides other financial services?

• Bank

• Credit Union

• Stockbroker

• Life Insurance Company

Which of the following best refers to the network of savers, investors, financial institutions, and financial assets?

• stockbroker

• equities market

• Credit Union

• financial system

Which of the following best refers to stocks or documents that represent a claim on the income and property of the borrower?

• financial intermediaries

• financial assets

• mutual funds

• 401(k) Plans

Which of the following best refers to the funds that collect and invest income until payments are made to eligible persons in retirement?

• mutual funds

• pension funds

• bear markets

• bull markets

Commonly refers to a person who buys or sells equities for his or her clients.

• Insurance agent

• financial advisor

• stockbroker

• accountant

What theory argues that stocks are always priced about right and bargains are hard to find because they are so closely watched by so many investors?

• Efficient Market Hypothesis

• Theory of Demand

• Theory of Bull Markets

• Wall Street Hypothesis