the economics of money, banking, and financial markets
! 39! © 2014 Pearson Canada Inc.! Describe the two methods of organizing a secondary market. Answer: A secondary market can be ...
! 40! © 2014 Pearson Canada Inc.! Treasury bills are considered the safest of all money market instruments because there is no ...
! 41! © 2014 Pearson Canada Inc.! Collateral is ____ the lender receives if the borrower does not pay back the loan. A) a liab ...
! 42! © 2014 Pearson Canada Inc.! Which of the following instruments are traded in a money market? A) Bank commercial loans B) ...
! 43! © 2014 Pearson Canada Inc.! Explain why Government of Canada Treasury Bills are considered as a financial instrument wit ...
! 44! © 2014 Pearson Canada Inc.! Bonds that are sold in a foreign country and are denominated in a currency other than that o ...
! 45! © 2014 Pearson Canada Inc.! 2.5 Function of Financial Intermediaries: Indirect Finance The process of indirect finance u ...
! 46! © 2014 Pearson Canada Inc.! Financial intermediaries provide customers with liquidity services. Liquidity services ____. ...
! 47! © 2014 Pearson Canada Inc.! The concept of diversification is captured by the statement ____. A) don't look a gift horse ...
! 48! © 2014 Pearson Canada Inc.! The problem created by asymmetric information before the transaction occurs is called ____, ...
! 49! © 2014 Pearson Canada Inc.! Typically, borrowers have superior information relative to lenders about the potential retur ...
! 50! © 2014 Pearson Canada Inc.! Although the dominance of ____ over ____ is clear in all countries, the relative importance ...
! 51! © 2014 Pearson Canada Inc.! Which of the following is a depository institution? A) A life insurance company B) A credit ...
! 52! © 2014 Pearson Canada Inc.! The primary liabilities of depository institutions are ____. A) premiums from policies B) sh ...
! 53! © 2014 Pearson Canada Inc.! Which of the following are not contractual savings institutions? A) Life insurance companies ...
! 54! © 2014 Pearson Canada Inc.! An investment intermediary that lends funds to consumers is ____. A) a finance company B) an ...
! 55! © 2014 Pearson Canada Inc.! The primary assets of money market mutual funds are ____. A) stocks B) bonds C) money market ...
! 56! © 2014 Pearson Canada Inc.! A goal of the Ontario Securities Commission is to reduce problems arising from ____. A) comp ...
! 57! © 2014 Pearson Canada Inc.! In order to reduce risk and increase the safety of financial institutions, commercial banks ...
! 58! © 2014 Pearson Canada Inc.! How does regulation reduce the problems of adverse selection and moral hazard? What regulatio ...
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