Exam 16: The Financial System

Treasury bills have a minimum denomination of $1,000.

A(n)_____ helps underwrite equity and debt (bond)offerings and helps devise and implement financial strategies.

_______ is a nondepository financial institution.

All market participants must keep detailed records of every aspect of every trade.What is this called?

The reserve requirement tool is rarely used by the Fed.

Which of the following policy tools does the Fed use most frequently?

Mortgage pass-through securities are relatively safe,even when loans are made to borrowers with poor credit ratings.

Many developing countries and virtually all developed countries have stock exchanges.

As market interest rates rise,bond prices rises.

To help facilitate the clearing of checks is one of the Federal Reserve's most important tasks.

Which of these connect major brokerages and individual traders virtually using the Internet,so that trades can be made directly without going through an intermediary?

The price of a bond is affected by its interest rate.

In order to join a credit union,you have to share something in common with other credit union members.

Which of the following statements is incorrect?

Which of the following actions would have the effect of increasing the supply of money and credit and lowering interest rates?

A ______ bond is a bond issue whose proceeds will be used to pay for a project that will produce income.

Commercial paper is securities sold by corporations,such as Raytheon,that mature from 1 to 270 months from the date of issue.

The basic form of corporate ownership is embodied in

When a company needs capital to purchase inventory,expand a plant,make major investments,acquire another firm,or pursue other business goals,it may sell a bond or stock issue to the investing public.This is done in the ______ market.

Bonds are issued in various denominations-face values-usually between $100 and $2,500.