Overview of financial system
Quiz by Thanh Trần Ngọc
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- Q1
Well-functioning financial markets
cause inflation.
cause financial crises
produce an efficient allocation of capital.
eliminate the need for indirect finance.
60s - Q2
Which of the following can be described as direct finance?
You take out a mortgage from Vietcombank.
You buy shares in a mutual fund.
You buy shares of common stock in the secondary market.
You borrow money from a friend.
60s - Q3
The Ho Chi Minh Exchange is an example of:
A financial market
All of them
A financial institituion
A financial instrument
60s - Q4
Assume that you borrow $2000 at a 10% interest rate to finance your new project. For this loan to be profitable, the minimum amount this project must generate in annual earnings:
$201
$400
$200
$199
60s - Q5
If the maturity of a debt instrument is less than one year, the debt is called ________.
intermediate-term
medium-term
short-term
long-term
60s - Q6
Which of the following statements about the characteristics of debt and equity is false?
They both enable a corporation to raise funds.
They can both be short-term financial instruments.
They can both be long-term financial instruments.
They both involve a claim on the issuer's income.
60s - Q7
When an investment bank ________securities, it guarantees a price for a corporation's securities and then sells them to the public.
undertakes
overtakes
underwrites
overwrites
30s - Q8
A short-term debt instrument issued by well- known corporations is called
commercial mortgages
corporate bonds.
municipal bonds.
commercial paper.
60s - Q9
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
free-riding
moral hazard
costly state verification
adverse selection
30s - Q10
Which of the following is a depository institution?
A mutual fund
A pension fund
A credit union
A life insurance company
60s - Q11
Which of the following is not a secondary market?
Futures market
Foreign exchange market
Initial public offering (IPO)
Exchange
60s - Q12
An investment intermediary that lends funds to consumers is
a finance fund.
a finance company.
an investment bank.
a business company
60s - Q13
A five-year mortgage is in
Equity market
Debt market and capital market
Debt market
Debt market and money market
30s - Q14
Treasury Bills are in the
debt market and money market
debt market
equity market
equity market and money market
60s - Q15
Repurchase Agreements (Repo) are in
money market and debt market
money market and equity market
equity market and capital market
debt market
60s