Deck 4: Financial Markets and Instruments

Question 1

In borrowing and lending of federal funds, the federal funds rate is result of function between

A)assets and liability
B)cost and marketing
C)supply and demand
D)income and expense

Answer 1

supply and demand

Question 2

The demand for heavy loans can cause

A)excess funds for banks
B)deficiencies for banks
C)organized reservation
D)competitive reservations

Answer 2

deficiencies for banks

Question 3

The agreement which incurs the transaction between two parties and promise held that second party will sell security at specific maturity is classified as

A)repurchasing commercial notes
B)repurchase bills
C)purchase agreement
D)reverse repurchase agreement

Answer 3

reverse repurchase agreement

Question 4

Which among the following is correct regarding BPLR or bench mark prime lending rate?

A)It is lowest interest rate below PLR charged by a bank from the best customer of the financial year
B)It is highest interest rate above PLR charged by a bank from the any customer of the financial year
C)Both (a) & (b)
D)None of the above

Question 5

Which among the following coined the term "Second generation Reforms"?

A)World Bank
B)International Monetary Fund
C)Reserve bank of India
D)SBI

Question 6

The commercial paper issued with low interest rate thus the commercial paper are categorized as

A)payables rating
B)commercial rating
C)poor credit rating
D)better credit rating

Question 7

In primary markets, first time issued shares to be publicly traded in stock markets is considered as

A)traded offering
B)public markets
C)issuance offering
D)initial public offering

Question 8

Transaction cost of trading of financial instruments in centralized market is classified as

A)flexible costs
B)low transaction costs
C)high transaction costs
D)constant costs

Question 9

Stocks or shares that are sold to investors without transacting through financial institutions are classified as

A)direct transfer
B)indirect transfer
C)global transfer
D)pension transfer

Question 10

Type of financial security which have linked payoff to another issued security is classified as

A)linked security
B)derivative security
C)payable security
D)non-issuing security

Question 11

In primary markets, property of shares which made it easy to sell newly issued security is considered as

A)increased liquidity
B)decreased liquidity
C)money flow
D)large funds

Question 12

Liquidity status of certificate of deposit which is more negotiable is considered as

A)certified liquidity
B)term liquidity
C)more liquid
D)less liquid

Question 13

Commercial paper issued with low interest rate thus commercial paper are categorized as

A)payables rating
B)commercial rating
C)poor credit rating
D)better credit rating

Question 14

In borrowing and lending of federal funds, federal funds rate is result of function between

A)assets and liability
B)cost and marketing
C)supply and demand
D)income and expense

Question 15

A "hybrid" fund is one that:

A)invests in both bonds and stocks
B)started as a closed-end investment company, but changed to a mutual fund
C)has different "loads" for different classes of investors in the fund
D)can serve as an investment vehicle, but also provides check-writing privileges.

Question 16

A mutual fund that invests solely in stocks would be categorized as a/an:

A)bond fund
B)fixed income fund
C)money market fund
D)equity fund

Question 17

A large number (about 25%) of long-term mutual funds are _____________ funds, buying securities in proportions similar to those of a major stock index.

A)small cap
B)large cap
C)fixed income
D)index

Question 18

The bulk of the nation's money supply is created within the private banking system and is sometimes called:

A)inside money
B)net money
C)base money
D)outside money

Question 19

A type of bank account designed to compete with money market mutual funds, and having limited check-writing services, is known as:

A)wholesale CDs
B)demand deposit
C)repurchase agreement
D)NOW account

Question 20

__________would encompass fees received by the bank, but not revenues coming from interest charges on loans.

A)Net interest margin
B)Spread
C)Non interest income
D)Non interest expense

Question 21

Another name used for a bank income statement is:

A)report of income
B)statement of retained earnings
C)overhead efficiency report
D)report of condition