Exam 2: An Overview of the Financial System

Collateral is ________ the lender receives if the borrower does not pay back the loan.

________ institutions are financial intermediaries that acquire funds at periodic intervals on a contractual basis.

The time and money spent in carrying out financial transactions are called ________.

Which of the following can be described as involving direct finance?

Treasury bills are considered the safest of all money market instruments because there is no risk of ________.

The principal lender-savers are ________.

A financial market in which previously issued securities can be resold is called a ________ market.

If bad credit risks are the ones who most actively seek loans and, therefore, receive them from financial intermediaries, then financial intermediaries face the problem of ________.

If Microsoft sells a bond in London and it is denominated in dollars, the bond is a ________.

How do financial intermediaries play an important role in the economy?

The primary assets of credit unions are ________.

Which of the following are not contractual savings institutions?

Financial institutions that accept deposits and make loans are called ________ institutions.

Treasury bills pay no interest but are sold at a ________. That is, you will pay a lower purchase price than the amount you receive at maturity.

Financial markets have the basic function of ________.

Economies of scale enable financial institutions to ________.

A debt instrument sold by a bank to its depositors that pays annual interest of a given amount and at maturity pays back the original purchase price is called ________.

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

Which of the following instruments is not traded in a money market?

Which of the following can be described as involving indirect finance?