Money market and capital markets

Question 1

True or false. Money markets are the markets that trade debt securities with maturities of one year or less

Answer 1

true

Question 2

True or false. Capital markets are the markets that trade debt or bonds and equity or stocks instruments with maturities of more than one year

Answer 2

True

Question 3

True or false. Banks are the sourcing cash for operational requirements and investing excess cash in short-term instruments

Answer 3

false. companies

Question 4

True or false. Banks as the acceptor of short-term commercial papers, issuer of certificates of deposits

Answer 4

true

Question 5

True or false. Money market provides funds to public and private institution to finance their needs

Answer 5

true

Question 6

True or false. The borrowing by the government avoids deficit financing or printing more notes increasing the money supply and price level

Answer 6

true

Question 7

True or false. Globalization of funds refers to the transferring of funds from one sector to another thus mobilizing the resources for the country’s development

Answer 7

false. mobilization of funds

Question 8

True or false. Commercial paper, bankers’ acceptances, treasury bills, government agency notes, local government notes, interbank, time deposits, and repurchase agreements are the types of money market iinstruments

Answer 8

true

Question 9

True or false. Bank acceptance note is an instrument representing a promised current payment by a bank

Answer 9

False. promised future payment

Question 10

True or false. High grade commercial papers are secured short term debt instrument issued by a bank, typically for the financing of accounts payable and inventories or meeting short-term liabilities

Answer 10

false. high grade commercial papers are unsecured short term debt instrument issued by a bank

Question 11

true or false. High grade commercial papers have maturities rarely range shorter than 270 days

Answer 11

false. longer than 270 days

Question 12

True or false. The most fundamental type of commercial paper is a promissory note, a written pledge to pay money

Answer 12

true

Question 13

True or false. Bank acceptance note is an instrument representing a promised future payment by a bank. The payment is accepted and guaranteed by the bank as a time draft to be drawn on a deposit. The draft specifies the amount of funds, the date of the payment and the entity to which the payment is owed

Answer 13

true

Question 14

True or false. Treasury bills, notes, and bonds are not marketable government debt securities

Answer 14

false. they are marketable government debt securities

Question 15

True or false. Local government notes are contracts in which the vendor of a security agrees to repurchase it from the buyer at an agreed price

Answer 15

false. term repurchase agreements

Question 16

true or false. National and local government is for funding national debt issued by national government and to finance capital projects

Answer 16

True

Question 17

True or false. national government finance capital expenditures and other investment opportunities

Answer 17

false. corporation

Question 18

True or false. Capital market trading only covers the primary market

Answer 18

false. it covers both primary and secondary market

Question 19

True or false. The selling of securities for the second time is referred to as initial public offering

Answer 19

false. selling of securities for the 1st time

Question 20

True or false. Primary market is a venue for the sale of previously issued securities

Answer 20

false. secondary market

Question 21

True or false. 2 types of primary markets are organized stock exchange and over-the-counter exchange

Answer 21

false. secondary market

Question 22

True or false. cash flows received by the investor or paid by the issuer are the periodic interest payments and the principal returned at maturity

Answer 22

true