Exam 2: Financial Markets and Institutions

Which one of these was a major cause of the deep recession and severe unemployment throughout much of Europe that followed the financial crisis of 2007-2009?

The cost of capital is the interest rate paid on a loan from a bank or some other financial institution.

Which one of the following is the biggest provider of payment mechanisms?

Firms can often determine the price of any commodities they use in their production process by consulting the price quotes provided by:

One contributing factor to the 2007-2009 financial crisis was the structuring of mortgage loans with:

An individual can save and invest in a corporation by lending money to it or by purchasing additional shares.

Which one of the following is least liquid?

The cost of capital is the minimum acceptable rate of return for capital investment.

Which one of the following funds provides a tax advantage to individual investors?

Almost all foreign exchange trading occurs on the floors of the FOREX exchanges in New York and London.

Which of the following is not a function of financial markets?

Like public companies,private companies can also use their stock price as a measure of performance.

One root of the financial crisis of 2007-2009 was the strict money policies promoted by the U.S.Federal Reserve and other central banks after the technology bubble burst (i.e.,money was relatively expensive during this time).

The opportunity cost of capital:

Insurance companies can usually cover the claims of policyholders because:

A company can pay for its expansion in all the following ways except:

One reason suggesting that banks may be better than individuals at matching lenders to borrowers is that banks:

A bond differs from a share of stock in that a bond:

When Patricia sells her General Motors common stock at the same time that Brian purchases the same amount of GM stock,GM receives:

The stocks of major corporations trade in many markets throughout the world on a continuous or near-continuous basis.