Exam 2: An Overview of the Financial System

An investment bank helps ________ issue securities.

The primary assets of a finance company are

Securities are ________ for the person who buys them,but are ________ for the individual or firm that issues them.

Adverse selection is a problem associated with equity and debt contracts arising from

Which of the following are not contractual savings institutions?

Banks can lower the cost of information production by applying one information resource to many different services. This process is called

A corporation acquires new funds only when its securities are sold in the

Which of the following are short-term financial instruments?

The primary assets of a pension fund are

Distinguish between direct finance and indirect finance. Which of these is the most important source of funds for corporations in the United States?

Which of the following benefit directly from any increase in the corporation's profitability?

The primary liabilities of a commercial bank are

Because these securities are more liquid and generally have smaller price fluctuations,corporations and banks use the ________ securities to earn interest on temporary surplus funds.

When I purchase ________,I own a portion of a firm and have the right to vote on issues important to the firm and to elect its directors.

Which of the following is a depository institution?

Which of the following statements about financial markets and securities is true?

In the United States,loans from ________ are far ________ important for corporate finance than are securities markets.

Equity holders are a corporation's ________. That means the corporation must pay all of its debt holders before it pays its equity holders.

Which of the following instruments are traded in a money market?

Which of the following are not traded in a capital market?