PIF2013 CH3 Market Structure and Classifications

What is the money market primarily concerned with?

• Stock market trading

• Real estate transactions

• Short-term papers

• Long-term investments

Which of the following is a money market instrument?

• Commercial papers

• Bonds

• Stocks

• Real estate

What does the capital market encompass?

• Short term cash equivalents

• Only bonds

• Only stocks

• Medium to long term financial assets

What is the primary function of the primary market?

• Trading previously issued securities

• Investing in commodities

• Selling new securities for the first time

• Buying real estate

What is a characteristic of the secondary market?

• Involves buying and selling previously issued securities

• Is only for institutional investors

• Involves new issues of securities

• Only deals with government bonds

What is a forward contract?

• A type of stock

• An agreement to buy or sell an asset at a future date

• A loan agreement

• A standardized contract traded on an exchange

What does a future contract involve?

• Buying or selling an asset at a specified future date

• Trading real estate

• A loan agreement

• Investing in stocks

What is an option in financial terms?

• A type of stock

• A right but not an obligation to buy or sell

• A loan agreement

• A mandatory contract

What is the main purpose of the Islamic money market?

• To issue government bonds

• To trade stocks

• To manage liquidity in accordance with Shariah

• To invest in real estate

What is the role of the central bank in the money market?

• To conduct daily monetary operations

• To manage corporate bonds

• To trade real estate

• To issue stocks