WorksheetsChapter 11 Financial Markets Review
Total questions: 20
Worksheet time: 16mins
_______ is an agreement to buy or sell at a specific date in the future at a predetermined price
equities
futures contract
bond
savings
_______ stocks that represent ownership shares in corporations
equities
capital market
secondary market
futures contract
_______ the dollars that become available for investors to use when others refrain from consuming
risk
equities
bond
savings
_______ formal contract to repay borrowed money and interest on the borrowed money at regular future intervals
equities
savings
bond
futures contract
_______ a market in which all financial assets can be sold to someone other than the original issuer
primary market
secondary market
financial system
capital market
_______ a market in which financial capital is loaned and/or borrowed for at least one year
primary market
secondary market
financial system
capital market
_______ a situation in which the outcome is not certain, but the probabilities can be estimated
equities
portfolio diversification
risk
bond
_______ a strategy of holding different kinds of investments to minimize risk
portfolio diversification
bond
futures contract
risk
_______ a market in which only the original issuer can sell or repurchase a financial asset
financial system
primary market
capital market
secondary market
_______ a network of savers, investors, financial assets, and financial institutions that work together to transfer savings to investment uses
secondary market
primary market
financial system
capital market
What kind of fund collects and invests income for later payments to eligible recipients?
pension fund
credit union fund
insurance 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?
interest
pension
contribution
premium
Which of the following financial organizations specializes in buying installment contracts from merchants who sell on credit?
a bank
a credit union
a finance company
an insurance company
The rate of return on a corporate, municipal, or government bond is its _______ .
par value
compensation rate
interest rate
coupon rate
Junk bonds usually have low ratings because _______ .
they have a low rate of return
they have a low risk of default
they are not risky investments
they are a high-risk investment
What is the main difference between Treasury bonds, Treasury notes, and Treasury bills?
the amount of time for maturity
the interest rate
the minimum purchase requirement
the method of sale
Which two investments are at opposite ends of the risk spectrum?
Treasury notes and futures
Savings bonds and Treasury notes
Equities and futures
Equities and futures
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 may withdraw funds at any time without penalty.
You never pay taxes on your contributions.
Your contributions are invested in high-return, high-risk fund
