Quiz 3

Question 1

Commercial banks make money by

Answer 1

Borrowing at a lower rate and lending at a higher rate

Question 2

Financial institutions on the buy side

Answer 2

Buy, hold and trade financial products

Question 3

Buy Side Financial Institutions

Answer 3

Commercial Banks 
Mutual Funds
Money Managers 
Insurance Companies
Hedge Funds 
Financial Entities

Question 4

Financial Institution in the sell side do what

Answer 4

Create, make markets and sell financial products

Question 5

Sell Side Financial Institutions

Answer 5

Investment Banks

Commercial Banks

Question 6

Three general types of mutual funds include

Answer 6

Money market funds
Bond funds
Stock funds

Question 7

Primary role of the DMM

Answer 7

To hold inventory and to buy/sell shares

Question 8

Secondary Offerings usually lead to

Answer 8

A decrease in stock prices

Question 9

A factor that promotes well functioning financial markets is that borrowers and investors are held

Answer 9

Accountable

Question 10

IPO’s backed by Venture Capital have

Answer 10

Higher long term returns

Question 11

Investors seeking more risk invest in

Answer 11

Stocks