Financial Markets

What is the primary function of a financial market?

• To facilitate the exchange of goods and services
• To make a profit for investors

• To facilitate the exchange of assets, securities, and commodities
• To regulate financial institutions

Which of the following is a type of primary financial market?

• Stock Market

• Bond Market

• Money Market

• All of the above

Which financial market is known for trading in short-term debt securities?

• Stock Market
• Forex Market
• Commodity Market
• Money Market

Which financial instrument represents ownership in a corporation?

• Certificate of deposit

• Commodities
• Treasury bond

• Stocks

What is the term for the interest rate at which banks lend money to each other overnight?

• Prime Rate
• Discount Rate
• Federal Funds Rate
• Interest Rate

What does the acronym IPO stand for in the context of financial markets?

• Internal Public Offering

• Initial Public Offering
• Initial Price Offering

• International Public Offering

Which of the following is NOT a stock market index

• NASDAQ Composite

• Dow Jones Industrial Average

• S&P 500
• SEC Index

What is the term for a financial instrument that derives its value from an underlying asset, such as a stock or commodity?

• Bond
• Equity
• Mutual Fund
• Option

Which financial market is associated with the trading of currency pairs?

• Foreign Exchange Market

• Commodity Market
• Real Estate Market
• Stock Market

What is the main purpose of diversification in investment portfolios?

• Maximizing returns

• To ensure a guaranteed return
• Reducing risk

• Minimizing taxes