Exam 1: The Financial Environment

An economy's _____________________ is the interaction of policy makers,a monetary system,financial institutions,and financial markets to expedite the flow of financial capital from savings into investment:

_________ individuals exhibit sound ethical behavior in their personal and business dealings and practices.

The list of financial institutions that either failed or were merged with other firms or bailed out by the federal government during financial crisis of 2007-2009 include all of the following except:

________________ facilitate the transfer of financial assets among individuals,institutions,businesses,and governments.

All of the following are true regarding mortgage backed securities except:

Finance at the macro level is the study of financial institutions and financial markets and how they operate within the financial system in both the U.S.and global economies.

The secondary securities markets are involved in creating and issuing new securities,mortgages,and other claims to wealth.

While the financial press chooses to highlight examples of unethical behavior,most individuals exhibit sound ethical behavior in their personal and business dealings and practices.

Securities market institutions include:

The possible conflict between managers and owners is sometimes called the

An efficient ______________ that is comprised of a central bank and a banking system that is able to create and transfer a stable medium of exchange called money.

A credit rating indicates the expected likelihood that a borrower will miss interest or principal payments and possibly default on the debt obligation in the form of a loan,mortgage,or bond.

Credit ratings are prepared by government organizations on individuals,financial institutions,business firms,and government entities.

The primary securities markets are

The ______________ is a term used to describe the financial system,institutions,markets,businesses,individuals,and global interactions that help the economy operate efficiently

The Economic Stabilization Act of 2008 was passed in response to the financial crisis.

The study of how individuals prepare for financial emergencies,protect against premature death and property losses,and accumulate wealth is called:

A mortgage-back security is an investment created by using a mortgage as collateral for a loan.

A mortgage-back security is a debt security created by pooling together a group of mortgage loans whose periodic payments belong to the holders of the security.

Financial markets encourage investment by: