Reference no: EM133046649

FINANCIAL MARKETSTRUE OR FALSE EX: (FALSE; FALSE) 1.

Statement 1: Treasury bills are issued by the Bureau of Internal Revenue.

Statement 2: Example of risk sharing is the use of receivable financing.

2. Statement 1: Financial Systems provides pricing for financial instruments.

Statement 2: Financial markets includes bank and non-bank institutions.

3. Statement 1: The lower the transaction cost the more investors are willing to invest.

Statement 2: secondary markets provide a centralized marketplace where economic agents know they can transact quickly and efficiently.

4. Statement 1: Capital markets has fluctuations in their prices that are quietly small.

Statement 2: A fund manager trades the fund securities earning capital gains and collecting dividends or interest income from their investment

5. Statement 1: Bankers Acceptance are like postdated checks and are not subject for endorsement.

Statement 2: Commercial paper is an example of money market instrument.

6. Statement 1: Financial markets, financial institutions and financial regulators must be present for a financial system to work efficiently and effectively.

Statement 2: Financial instruments includes debt and equity instruments.

7. Statement 1: The primary motive of brokers is to earned profit.

Statement 2: Dealers are motivated by commission fees.

8. Statement 1: Different entity can raise funds in the capital market.

Statement 2: Entities may also transfer risk in the derivative market.

9. Statement 1: Financial investments are from corporations, government and individual.

Statement 2: Financial claims flow from users to suppliers are indirect transfers.

10. Statement 1: Public investors may be individuals who will own shares and bonds.

Statement 2: The one who issue the bonds are the borrowers while the one who received the bonds are the investors.

11. Statement 1: Open-end mutual funds are funds can be access to everybody but has restrictions.

Statement 2: Shares issued in an initial public offering is an example of secondary market

12. Statement 1: The objective of the borrower is to increase the value of his money with the earnings that he can get from his investment.

Statement 2: The borrowers would want to hold highly liquid assets to be more flexible that allows them to respond quickly to new opportunities or unexpected events.

13. Statement 1: Financial regulators ensure the safety and security of all the participants in the financial system.

Statement 2: It would be more beneficial if there are no financial institutions because without them, financial costs will be lower.

14. Statement 1: Capital markets are markets traded using stocks instruments only.

Statement 2: Public corporations are corporations who has shares traded in the public.

15. Statement 1: Investing in a government is the safest since it is risk-free.

Statement 2: Government may issue bills notes and even bonds.

16. Statement 1: Financial institutions will serve as intermediaries between two parties involve.

Statement 2: Financial institutions provide surplus units to transfer wealth from one generation to next.

17. Statement 1: Income earned from investing in government bills are free from tax but not final tax on passive income.

Statement 2: The security will be received by a bidder who has the highest return for the government to fund projects.

18. Statement 1: Some investments has higher risk and higher return.

Statement 2: Since government securities are risk-free, expect for lower return

19. Statement 1: There is a risk in holding investments whether equity or bonds.

Statement 2: Cost associated with debt may be in a form of interest.

20. Statement 1: The value of the derivative security changes, as the value of the underlying security to be exchanged changes.

Statement 2: Derivative security can only be used in a foreign exchange market.