S&I Chapter 1

Financial market participants who receive more money than they spend, such as investors are called

• deficit units

• surplus units

• secondary units

• primary units

Which of the following is not an issuer of bonds?

• corporations

• households

• government agencies

• the U.S. Treasury

Behavioral finance -

• studies the behavior of financial markets in response to changes in Federal Reserve policy.

• applies concepts from sociology and anthropology to the behavior of market participants.

• applies psychology to financial decision making.

• explains why markets are efficient.

Those financial markets that facilitate the flow of short-term funds are known as​

• primary markets

• capital markets

• money markets

• secondary markets

Tougher regulations on financial institutions can ________ the financial markets and encourage more participation by surplus and deficit units.

• overturn

• upset

• reverse

• stabilize

Which of the following is a capital market security/instrument?

Responses

• a six-month certificate of deposit

• a ten-year bond

• a three-month Treasury bill

• an agreement for a bank to loan funds directly to a company for nine months

The Securities Act of 1933 -

• required complete disclosure of relevant financial information for securities traded in the secondary market.

  required complete disclosure of relevant financial information for securities traded in the secondary market.

• imposed heavy penalties for insider trading.

• required complete disclosure of relevant financial information for publicly offered securities in the primary market.

  required complete disclosure of relevant financial information for publicly offered securities in the primary market.

• declared trading strategies to manipulate the prices of public secondary securities illegal.

  declared trading strategies to manipulate the prices of public secondary securities illegal.

Stock issued by a corporation is an example of a(n)

Responses

• money market security

• debt security

• equity security

• debt security and money market security

Which of the following is most likely to be described as a depository institution?

• credit unions

• finance companies

• pension funds

• insurance companies

In aggregate (total), ____ are the most dominant depository institution, with more total assets than other depository institutions.

• Savings and Loans

• commercial banks

• credit unions

• savings banks