Question 1

Jenny has had a portion of stock in an e-commerce company for some time. She is ready to resell her stock. In what market would she do this?&#10;A)After market&#10;B)Resale market&#10;C)Secondary market&#10;D)Liquidity market

Accepted Answer

Jenny would resell her stock in the secondary market. This is where securities and financial assets are traded among investors after they have been issued in the primary market.

Question 2

Which of these statements most fully expresses why it is crucial to understand the basics of finance and economics?&#10;A)Failure to understand and implement sound financial practices can lead to personal bankruptcy.&#10;B)Failure to understand and implement sound financial practices led to the global financial crisis that started in 2008.&#10;C)Failure to understand and implement sound financial practices can lead to both personal and global financial collapse.&#10;D)Failure to understand and implement sound financial practices can lead to the failure of start-up companies and personal bankruptcy.

Accepted Answer

C) encompasses both the personal and global implications of not understanding and implementing sound financial practices, highlighting the broad spectrum of potential negative outcomes.

Question 3

Financial assets include intangibles that can change in value, such as stocks and bonds.

Accepted Answer

Financial assets include intangible assets like stocks and bonds, which can fluctuate in value based on market conditions.

Question 4

Financial markets bring together __________ and __________.&#10;A)households; banks&#10;B)firms; households&#10;C)borrowers; lenders&#10;D)lenders; savers

Accepted Answer

Financial markets are platforms where borrowers and lenders come together to trade financial instruments, such as bonds and stocks, facilitating the flow of funds from those who have surplus capital (lenders) to those who are in need of capital (borrowers).

Question 5

In financial markets, what is meant by the term liquidity?

Accepted Answer

The answer of In financial markets, what is meant by...

Question 6

Which of these entities are part of the so-called shadow banking industry?&#10;A)Insurance companies, credit review companies, &#160;and investment banks&#10;B)Finance companies, mutual funds, and insurance companies&#10;C)Savings and loan associations, large corporations, and mutual funds&#10;D)Savings and loan associations, credit unions, and credit review companies

Accepted Answer

Shadow banking refers to non-bank financial intermediaries that provide services similar to traditional commercial banks but outside normal banking regulations. This includes entities like finance companies, mutual funds, and insurance companies, which can engage in lending and other financial activities without the same level of regulatory oversight.

Question 7

Commercial banks face competition from a variety of institutions, including&#10;A)central banks, private equity companies, and finance companies.&#10;B)government, central banks, and investment banks.&#10;C)mutual funds, investment banks, and private equity partnerships.&#10;D)government, finance companies, and mutual funds.

Accepted Answer

Mutual funds, investment banks, and private equity partnerships are direct competitors to commercial banks as they offer alternative investment and financing options to customers. Central banks primarily regulate the banking sector rather than compete with commercial banks, and government is not a direct competitor in the financial services market.

Question 8

Which of these most accurately defines possible effects of fluctuating interest rates in the financial markets?&#10;A)Inflation&#10;B)Prices and levels of employment&#10;C)The rate of saving&#10;D)Risk levels

Accepted Answer

Fluctuating interest rates can directly impact prices and levels of employment as they influence borrowing costs, consumer spending, and business investment decisions.

Question 9

Financial assets include which of the following?&#10;A)Money, credit cards, and bonds&#10;B)Money, bonds, and stocks&#10;C)Credit cards, bonds, and stocks&#10;D)Savings accounts, money, and debit cards

Accepted Answer

Financial assets typically include money, bonds, and stocks. Money is a medium of exchange, bonds are debt investments, and stocks represent ownership in a company. Credit cards and debit cards are not considered financial assets; they are tools for accessing funds or credit. Savings accounts could be considered a financial asset, but they are not an option paired with only correct elements in the choices provided.

Question 10

Some of the most important central banks in the world include&#10;A)the People's Bank of China, the European Central Bank, and the Federal Reserve.&#10;B)the Deutsche Bundesbank, the People's Bank of China, and the Federal Reserve.&#10;C)the People's Bank of China, the Federal Reserve, and the Bank of England.&#10;D)the Federal Reserve, the European Central Bank, and the Bank of England.

Accepted Answer

The answer of Some of the most important central banks...

Deck 1: Introduction and Overview