Exam 16: The Financial System

Bonds with the highest level of risk are rated AAA.

Savings banks have greatly expanded their business lending activities in recent years while cutting back on their home mortgage lending activity.

There are __________ Federal Reserve districts.

Sales of most corporate and municipal securities are made via auctions.

The process by which money flows from savers to users is called the

Which of the following is a form of short-term financing sold by corporations,such as Raytheon,that mature from 1 to 270 days from the date of issue?

The National Association of Securities Dealers (NASD)purpose is to ensure that brokers perform their basic functions honestly and fairly,under constant supervision.

To the investing public,securities are sold in two ways: in open auctions and through investment bankers.

When the Fed buys government securities,it adds to the supply of money and credit,which causes a reduction in interest rates.

When a company offers stock for sale to the general public for the first time,it is called an initial public offering.

Francisco made a purchase at his local Walmart.Instead of writing a check,Francisco used a card issued by his bank with a Visa logo on the front.He entered his PIN and the purchase was automatically deducted from his checking account.Francisco used his __________ card.

A local government agency of Minnesota issued municipal securities for the purpose of building a community hospital.Austin Hunter Corp)a financial services company,decides to purchase these securities from the government and resell them to the investing public.Which of the following describes the process undertaken by Austin Hunter Corp.?

_____ are short-term debt securities issued by governments,financial institutions,and corporations.

CDs per depositor with denominations of $1,000,000 or less are federally insured.

The NASDAQ is a computerized communications network that links member investment firms and is the world's largest intranet.

Deposit insurance means that,in the event the bank fails,depositors are paid in full by the FDIC,up to $250,000.

The Treasury sells bonds that mature in 2,5,10,and 30 years from the date of issue.

Households are net users of funds,while businesses are net savers.

All of the following are types of securities EXCEPT

The Securities and Exchange Commission requires virtually all new public issues of corporate securities to be registered.As part of the registration process for a new security issue,the issuer must prepare a(n)