Chapter 1: Financial Markets

Question 1

Are very important for businesses as well as for individuals.

Answer 1

Assets

Question 2

Are the term of the Balance-sheet that give us the total worth of a business.

Answer 2

Assets

Question 3

Two Categories of Assets

Answer 3

1. Real Assets
2. Financial Assets

Question 4

Are the ssets that a business or investor owns

Answer 4

Real Assets

Question 5

Physical assets that help a company generate revenue

Answer 5

Real Assets

Question 6

Carry an intrinsic value of their own because of their substance and properties are thus important to a business.

Answer 6

Real Assets

Question 7

More popular with investors for tax benefits, less correlation with equity, attractive return, and inflation protection.

Answer 7

Real Assets

Question 8

Are liquid assets that one can easily or quickly convert into cash.

Answer 8

Financial Assets

Question 9

refer broadly to any marketplace where the trading of securities occurs, including the stock market, bond market, forex market, and derivatives market, among others.

Answer 9

Financial Markets

Question 10

are vital to the smooth operation of capitalist economies.

Answer 10

Financial Markets

Question 11

Put a check and wrong that appropriates to the basis.

Valuation

Answer 11

Financial Assets -❌
Real Assets - ✅

Question 12

Put a check and wrong that appropriates to the basis.

Liquidity

Answer 12

RA - ❌
FA - ✅

Question 13

Put a check and wrong that appropriates to the basis.

Tangibility

Answer 13

RA - ✅
FA - ❌

Question 14

Put a check and wrong that appropriates to the basis.

Growth

Answer 14

RA - ❌
FA - ❌

Question 15

Put a check and wrong that appropriates to the basis.

Purpose

Answer 15

RA - ✅ (for businesses)
FA - ✅ (for investment)

Question 16

Put a check and wrong that appropriates to the basis.

Accounting

Answer 16

RA - historical value
FA - amortized cost and fair value

Question 17

Put a check and wrong that appropriates to the basis.

Inflation Hedging

Answer 17

RA - ✅
FA - ✅/❌

Question 18

Put a check and wrong that appropriates to the basis.

Balance Sheet

Answer 18

RA - ✅
FA - 🟰

Question 19

Put a check and wrong that appropriates to the basis.

Trade

Answer 19

RA - ❌
FA - ✅

Question 20

Put a check and wrong that appropriates to the basis.

Tax Benefits

Answer 20

RA - ✅
FA - ❌

Question 21

Put a check and wrong that appropriates to the basis.

Reliability

Answer 21

RA - ✅
FA - ❌

Question 22

Types of Financial Markets

Answer 22

1. Money Market
2. Capital Market

Question 23

True or False

When financial markets fail, economic disruption including recession and unemployment can result.

Answer 23

True

Question 24

True or False

Real assets determine claims on real assets, whereas financial assets merely represent the wealth of an economy.

Answer 24

False

Question 25

is one of the major services through which the financial market helps in the growth of the economy.

Answer 25

Liquidity

Question 26

helps people exchange goods to cash immediately when needed, so the number of people switching towards _________ has increased.

Answer 26

Liquidity

Question 27

True or False

In addition, many financial intermediaries don’t provide liquidity to the ones who need it.

Answer 27

False

Question 28

Types of Liquidity

Answer 28

1. Funding Liquidity
2. Market Liquidity

Question 29

It increases the supply of money in the economy with a different method of interchanging out bonds in exchange for cash to the general public.

Answer 29

Financial Markets

Question 30

is the collective form of all the trades and issues of debt securities, offers companies and the government opportunities to secure their money for financing a project or investment.

Answer 30

Bond Market

Question 31

Financial markets often known by the name _____________

Answer 31

Debt Market