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Financial Markets & Financial Instruments Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Page 1

Question 1 1. The capital market is where _____ are bought and sold. The money market is where _____ are bought and sold.

Question 2 2. In which market are newly issued stocks and bonds bought and sold?

Question 3 3. M1 consists of which of the following?

Question 4 4. Which of these is the most liquid?

Question 5 5. _____ are profits paid out to shareholders based on their percentage of ownership in the company.

Page 2

Question 6 6. Which of the following statements about the earliest financial markets is TRUE?

Question 7 7. A share in the ownership of a company, no matter how small of a percentage, is called _____.

Question 8 8. Who gets to vote at a shareholder's meeting?

Question 9 9. Which exchange rate would most likely be used for a good or service that will be delivered at a future date?

Question 10 10. If the exchange rate between the U.S. dollar and Mexican Peso is 13 Pesos to 1 U.S. dollar, how many dollars would a gallon of ice cream costing 52 pesos be?

Page 3

Question 11 11. How does the primary bond market differ from the secondary market?

Question 12 12. Thomas has purchased a bond and he is supposed to receive regular installments during the life of the bond. What are these financial installments called?

Question 13 13. Which of the following is an index commonly used as a benchmark for investing?

Question 14 14. What is it called when stock is sold for the first time to raise capital?

Question 15 15. What does this mean: USD/JPY = 119.962?

Page 4

Question 16 16. Which of the following can be responsible for currency fluctuations?

Question 17 17. What does an aggregator do?

Question 18 18. Who provides loans to mortgage originators?

Question 19 19.

X is a type of bond that is payable to whoever holds it. As such, anyone can claim ownership of X. Because of the risk associated with X, very few are in circulation today.

Identify X.

Question 20 20. How is an unsecured bond different from a secured bond?

Page 5

Question 21 21. Robert has a very low risk tolerance and wants to invest in money market funds. Why would Robert choose U.S. Treasury funds?

Question 22 22. A money market fund is a(n) _____.

Question 23 23. What are the two segments of the financial market?

Question 24 24. The supply curve for money looks like which of the following?

Question 25 25. Which of the following financial markets executes trades electronically?

Page 6

Question 26 26. What is a dividend?

Question 27 27. Which of the following statements regarding an exchange rate is not true?

Question 28 28. Which of the following is TRUE of a bond's market value?

Question 29 29. What does the S&P in S&P 500 stand for?

Question 30 30. Ultimately what is the main factor affecting profits from currency trading?

Financial Markets & Financial Instruments Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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