1. Trading in securities previously issued (i.e. existing issues) takes place in the:
open market
secondary market
primary market
negotiated market
capital market
2. The financial system provides all the following services EXCEPT:
Provide credit
Payment services
Equitably distribute wealth
Provide liquidity
Risk protection
3. The function of the financial system that consists of providing a means of raising funds by converting securities and other assets into cash balances is called the:
savings function
wealth function
credit function
liquidity function
none of the above
4. Following the cut in U.S. credit rating by Standard & Poor's from AAA to AA+ on August 5, 2011,
Interest rates on U.S. Treasury bonds shot up sharply
The stock market tumbled
The stock market shot up sharply
The bond market remained unchanged
None of the above
5. As a result of the 2007-2009 global financial crisis, one U.S. dollar is now more valuable than one euro.
True
False
6. Due to the ongoing European debt crisis, one euro is now less in value than one U.S. dollar.
True
False
7. Since a rise in interest rates increases the cost of money in the economy, it is bad for everyone.
True
False