The securities, intermediaries, and markets that exist to match savers and borrowers comprise the financial ________. a. system
A contract in which a borrower promises to compensate the lender in the future is called a financial ________. a. stock
A contract that makes the owner of a security a part owner of the company that issued the security is known as a(n) ________ security. a. debt
A payment (or series of payments) made by the borrower to the investor in a debt security in addition to repayment of the principal is called: a. maturity.
A dividend is the periodic payment made on a(n) ________ security. a. equity
When savers buy securities only from borrowers, they are using ________ finance. a. indirect
When savers invest through financial intermediaries, they are using ________ finance. a. intermediate
Which of the following is NOT an example of a financial intermediary? a. commercial bank
b. savings institution
d. life insurance company
Diversification means ownership of ________ by a(n) ________. a. one security; investor
b. one security; borrower
c. a variety of securities; borrower
d. a variety of securities; investor
Which of the following is NOT a function of financial intermediaries? a. Helping savers concentrate on just one financial investment.
b. Gathering information about borrowers.
c. Matching borrowers and savers who have different time horizons.
d. Pooling the funds of many people.
A place or a mechanism by which borrowers, savers, and financial intermediaries trade securities is called a financial ________. a. primary
The interest paid on a security will be ________ when the price of the security is ________. a. greater; greater
b. lower; zero
c. greater; lower
d. zero; lower
Which of the following was a cause of the Asian crisis of the 1990s? a. Consistent plans for monetary policy and exchange rates.
b. Lack of government involvement in the financial sector.
c. Strong banking systems.
d. Poor debt management.
Which of the following did NOT result from the government's delay in closing down bankrupt S&Ls in the late 1980s? a. large financial losses
b. lack of accounting rules
c. distorted real estate markets
d. worsening of 1990-1991 recession
In the U.S., it is common for home buyers to have a cash down payment of ________ percent. a. 20
One of the main lessons of the financial crisis of 2008 was that, when foolish financial practices occur, there must be a quick response from ________. a. financial journalists
b. consumer-run Web sites
c. corporate boards of directors
d. government regulators
The gain that an investor anticipates making, on average, from a financial security is called ________. a. expected return
c. standard deviation
The amount of uncertainty about the return on a security is known as ________.
Standard deviation is the measure of the ________ a security.
b. risk to
The easiness to buy or sell a security in the secondary market when wanted without incurring significant costs...
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