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CHAPTER 1

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CHAPTER 1

Uploaded by

eshaaban098
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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CHAPTER 1: Money and

Banking questions
(MCQ)
1- Markets in which funds are transferred from people who have an excess of
available funds to people who have a shortage.
A. Financial institutions
B. Financial markets
C. None of the above
D. All of the above

2- The maximum amount of profit is being obtain from use of their economic
resources.
A. Efficiency as producer
B. Efficiency as consumer
C. None of the above
D. All of the above

3-are investment securities where an investor lends money to a company or a


government for a set period of time, in exchange for regular interest payments.
A. Stock
B. Exchange currency
C. Bond
D. All of the above
4-it enable corporations or government to borrow to finance their activities.
A. Stock
B. Exchange currency
C. Bond
D. All of the above

5-Is the cost of borrowing or the price paid for the rental of funds.
A. Exchange rate
B. Interest rate
C. Bank rate
D. B and C are correct

6-When you own stock in a company, you are called a ………………. because you
share in the company's profits.
A. Shareholder
B. Investor
C. Demander
D. None of the above

7-The market where people get poor or rich quickly.


A. Stock market
B. Bond market
C. Foreign exchange market
D. Black market
8- ………..which is a contractual agreement by the borrower to pay the holder of
the instrument fixed pound amounts at regular intervals.
A. Bond
B. Stock
C. Currency
D. None of the above

9- A debt instrument is ……………. if its maturity is less than a year.


A. Long term
B. Short term
C. Intermediate term
D. None of the above

10- Which are claims to share in the net income and the assets of a business.
A. Bond
B. Stock
C. Loan
D. Non of the above

11- Is where securities are created. It's in this market that firms sell new stocks and
bonds to initial buyers for the first time.

A. Primary market
B. Secondary market
C. A and B
D. Neither A nor B
12- In which dealers at different locations who have an inventory of securities
stand ready to buy and sell securities "over the counter" to anyone who comes to
them and is willing to accept their prices.

A. Exchange market
B. Over the counter market
C. Money market
D. Capital market

13- Is a financial market in which only short-term debt instruments (generally


those with original maturity of less than one year) are traded.
A. Exchange market
B. Over the counter market
C. Money market
D. Capital market

TRUE OR FALSE
1. Financial markets are (banks, trust and mortgage FALSE
loan companies, insurance companies, mutual fund
companies, and other institutions).

2. Financial markets and institutions only affect your FALSE


everyday life.

3. Financial markets are markets in which funds are TRUE


transferred from people who have an excess of
available funds to people who have a shortage.

4. Banks and other financial institutions are what TRUE


make financial markets work.

5. Efficiency as consumer: The maximum amount of TRUE


satisfaction is being obtain from use of their
resources.
6. Fixed income is a term often used to describe FALSE
stocks.

7. Stocks are securities that represent an ownership TRUE


share in a company.

8. The number of units of domestic currency FALSE


required to buy one unit of foreign currency is
called interest rate.

9. Business firms are the main demander. TRUE

10. Debt securities such as (stocks &mortgage). FALSE

11. Equity Market such as stocks markets. TRUE

12. Equities have no maturity date so it’s considered FALSE


short-term

13.Secondary market is a financial market in which TRUE


securities that have been previously issued can be
resold.

14.The secondary markets for securities are not well FALSE


known to the public because the selling of
securities to initial buyers often takes place
behind closed doors.

15.Money market securities tend to be more liquid TRUE


and more widely traded than capital market.

16.Exchanges, where buyers and sellers of securities FALSE


(or their agents or brokers) meet in different
location to conduct trades.

17.The maturity of a debt instrument is the time FALSE


(term) to that instrument's start date.
18.Debt instruments with a maturity between one TRUE
and ten years are said to be long -term.

19.A debt instrument is short-term if its maturity is TRUE


less than a year.

20.Equity instruments are assets that require a fixed FALSE


payment to the holder, usually with interest.

21.Bonds are considered to be less risky investments. TRUE

22.Shareholders do not gain ownership in the FALSE


business or have any claims to the future profits.

23.Interest rates are important on a personal level, TRUE


because they guide our decisions to save and to
finance major purchases

24.Brokers are agents of investors who match buyers TRUE


with sellers of securities

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