Exam 16: The Financial System

Alex buys a money market instrument.It will mature within,at most,_____.

The chairman of the Federal Reserve Board can accelerate economic activity by lowering interest rates.What primary method does the Federal Reserve use to accomplish this?

Commercial paper is generally considered a very high-risk security.

Complete the following using the terms listed. a.bonds b.Commercial banks c.NASDAQ d.Credit unions e.financial system f.call provision g.insider trading h.Federal Open Market Committee (FOMC) i.Securities j.New York Stock Exchange k.Internet-only banks l.limit order m.debentures n.primary market o.net savers -_____ is a global electronic marketplace where securities are bought and sold.

___ are short-term securities issued by the U.S.Treasury and backed by the full faith and credit of the U.S.government.

When evaluating loan applications,banks consider the borrower's ability and willingness to repay the loan.

Complete the following using the terms listed. a.bonds b.Commercial banks c.NASDAQ d.Credit unions e.financial system f.call provision g.insider trading h.Federal Open Market Committee (FOMC) i.Securities j.New York Stock Exchange k.Internet-only banks l.limit order m.debentures n.primary market o.net savers -______ are cooperative financial institutions that are owned by their depositors,all of whom are members.

______ are loans made to borrowers with poor credit ratings.

What type of financial institution raises money from investors by selling shares?

The vast majority of funds flow through direct transfers.

Complete the following using the terms listed. a.bonds b.Commercial banks c.NASDAQ d.Credit unions e.financial system f.call provision g.insider trading h.Federal Open Market Committee (FOMC) i.Securities j.New York Stock Exchange k.Internet-only banks l.limit order m.debentures n.primary market o.net savers -The process by which money flows from savers to users is called the _____.

Which of the following agencies regulates both state and federally chartered commercial banks?

The New York Stock Exchange (NYSE)is a secondary market.

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

Discuss the advantages and disadvantages of issuing shares of common stock.

Jaxon works as a senior accountant at Martinez Inc. ,a multinational technology giant.As a senior accountant at the company,Jaxon had exclusive access to some of the sensitive financial information of Martinez.It was later found that Jaxon had sold some of the sensitive information to a rival company for an undisclosed amount.Which of the following describes Jaxon's activity?

Which of the following is a nondepository financial institution?

Bonds with ratings of BBB and above are classified as _____.

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

Regulation of U.S.financial markets is primarily a function of the federal government;states do not regulate them in any way.