Chapter 11 Test, Form A - Financial Markets

What kind of fund collects and invests income for later payments to eligible recipients?

• credit union fund

• insurance fund

• pension fund

• mutual fund

Which type of financial organization is a nonprofit service cooperative?

• commercial bank

• mutual fund

• insurance company

• credit union

What is the name of the fee paid for an insurance policy?

• premium

• pension

• contribution

• interest

Which of the following financial organizations specializes in buying installment contracts from merchants who sell on credit?

• a credit union

• an insurance company

• a finance company

• a bank

The rate of return on a corporate, municipal, or government bond is its _______.

• par value

• compensation rate

• interest rate

• coupon rate

What two investments are at opposite ends of the risk spectrum?

• Treasury notes and futures

• Savings bonds and Treasury notes

• Equities and futures

• CDs and EE savings bonds

What is the main advantage of a mutual fund for an investor?

• Its price doesn't change much.

• It offers diversity in investment.

• It has a set maturity date.

• It can be sold at a profit.

Which of the following is an advantage of a 401(k) plan?

• Most employers match a portion of your contributions.

• You never pay taxes on your contributions.

• You may withdraw funds at any time without penalty.

• Your contributions are invested in high-return, high-risk funds.

A marketplace where trading of securities such as equities, bonds, currencies, and derivatives occurs is referred to as a:

• call market.
• bear market.
• financial market.
• foreign exchange market.

Tags

NCCTE.2020.BF21.02.01

Which of the following is a primary financial market?

• Stock exchange

• Bond market

• Foreign exchange market

• Derivatives market