UNIT 7+8: Investment and Central Banking Quiz

What is the primary role of investment banks?

• To lend money to individuals

• To act as intermediaries between companies and investors

• To print currency for the government

• To manage personal savings accounts

What does underwriting securities issues mean?

• Selling stocks to the public

• Guaranteeing to buy securities if no other purchasers are found

• Providing financial advice to clients

• Issuing loans to companies

What is an IPO?

• A type of bond

• An initial public offering of stock

• A type of investment fund

• A financial advisory service

Who are institutional investors?

• Banks that lend money to businesses

• Government agencies managing public funds

• Companies that invest money on behalf of others

• Individuals saving for retirement

What is a divestiture?

• The merger of two companies

• The sale of a subsidiary

• The issuance of new stocks

• The purchase of a new company

Why do large corporations use investment banks?

• To manage their daily operations

• To provide insurance services

• For independent advice and experience in financial transactions

• To lend them money directly

What is one function of central banks?

• To provide personal loans

• To lend money to individuals

• To supervise and regulate the banking system

• To issue stocks and bonds

What does a central bank do with currency?

• It invests currency in the stock market

• It collects currency from the public

• It sells currency to other countries

• It prints and issues currency

What is a bank run?

• When a bank merges with another bank

• When a bank opens new branches

• When a bank issues new loans

• When many depositors withdraw their money at once

What is the role of central banks in exchange rates?

• To regulate stock prices

• To lend money to foreign governments

• To manage reserves of gold and foreign currencies

• To set fixed prices for goods