Financial System Quiz

What is the primary aim of a financial system?

• Eliminate financial intermediaries

• Maximize shareholder wealth

• Facilitate the circulation and supply of funds

• Reduce transaction costs

Which of the following is NOT a type of financial market?

• Debt market

• Equity market

• Commodity market

• Insurance market

What is a primary market?

• A market for trading already issued securities

• A market for issuing securities for the first time

• A market for commodities

• A market for foreign exchange

Which of the following is a role of financial intermediaries?

• Eliminate risk

• Provide liquidity

• Control market prices

• Directly invest in stocks

What does the risk/return trade-off principle indicate?

• Risk and return are unrelated

• There is a correlated relationship between risk and return

• Lower risk guarantees higher returns

• Higher risk always leads to higher returns

What is Fintech primarily concerned with?

• Traditional banking methods

• Using technology to enhance financial services

• Regulating financial markets

• Investing in physical assets

Which of the following is an example of a financial security?

• Treasury Bills

• Real Estate

• Gold

• Art

What is a characteristic of a decentralized market?

• It is less regulated

• It has a physical location

• Participants trade directly with each other

• Single entity mediates transactions

Which of the following is a function of financial markets?

• Eliminating all risks

• Facilitating the exchange of financial instruments

• Providing loans directly to consumers

• Controlling interest rates

What is the role of a robo-advisor in Fintech?

• To automate investment advice

• To provide traditional banking services

• To manage physical assets

• To eliminate financial risks