2.01 Financial Markets
A type of market that allows traders to trade any time the market is open is known as a:
A. call market.
B. bond market.
C. financial market.
D. continuous market.
D. continuous market.
Proofing, encoding, capturing, and sorting are all steps in which banking process?
A. check payment
B. consumer lending
C. cash management
D. commercial lending
A. check payment
Which is an advantage of a money market account over a savings account?
A. The rate of return on a money market account is significantly better.
B. Money market accounts provide corporate ownership rights.
C. One can often write checks from a money market account.
D. Money market accounts are insured by the FDIC.
C. One can often write checks from a money market account.
One of the biggest risks to a real estate investment is:
A. depreciation.
B. a low rate of return.
C. lacking FDIC insurance.
D. the inability to write checks.
A. depreciation.
A form of money held or traded outside the country in whose currency its value is stated is known as:
A. U.S. currency.
B. Eurocurrency.
C. export currency.
D. import currency.
B. Eurocurrency.
Brian recently got his first part-time job as a food bagger at a local grocery store. He needs a safe place to store his income that allows him to withdraw money easily and frequently. Brian should consider opening which type of account?
A. savings
B. checking
C. health savings
D. individual retirement
B. checking
Which statement is true about certificates of deposit?
A. They may depreciate in value.
B. The riskiest investment is a certificate of deposit.
C. One must pay a penalty for withdrawing money early.
D. Certificates of deposit are issued by corporations or governments.
C. One must pay a penalty for withdrawing money early.
Which statement most accurately describes the relationship between risk and return?
A. For the potential of a low return, an investor usually accepts no risk.
B. For the potential of a high return, an investor usually accepts a low risk.
C. For the potential of a low return, an investor usually accepts a high risk.
D. For the potential of a high return, an investor usually accepts a high risk.
D. For the potential of a high return, an investor usually accepts a high risk.
A marketplace where trading of securities such as equities, bonds, currencies, and derivatives occurs is referred to as a:
A. call market.
B. bear market.
C. financial market.
D. foreign exchange market.
C. financial market.
A service that a bank provides to a company for the receipt of customers' payments, which are directed to a special post office box instead of directly to the company, is referred to as a/an:
A. lockbox.
B. vendor lease.
C. private placement.
D. asset management.
A. lockbox.
The purpose of the risk pyramid is to show a comparison of:
A. one stock to another.
B. one investment to another.
C. stocks to stock mutual funds.
D. corporate bonds to municipal bonds.
B. one investment to another.
Which is an example of a real estate investment?
A. a corporate bond
B. a certificate of deposit
C. partial ownership of a corporation
D. land to be developed in the future
D. land to be developed in the future
A level of performance that describes using the least amount of input to achieve the highest amount of output is known as:
A. commodity.
B. efficiency.
C. liquidity.
D. market.
B. efficiency.
Which type of protection ensures that a check, ATM, wire transfer, or debit card transaction will clear if the account balance falls below zero?
A. asset
B. liability
C. overdraft
D. system
C. overdraft
Which is an advantage of investing in bonds?
A. They are very low risk.
B. They are insured by the FDIC.
C. They offer extremely high rates of return.
D. They permit people to access their money at any time.
A. They are very low risk.
With a lending investment, investors:
A. avoid taking any risk.
B. hire a financial advisor.
C. allow borrowers to use their money for a price.
D. maintain a minimum amount of money in the investment.
C. allow borrowers to use their money for a price.
What type of investment involves several people pooling their money to purchase stocks and bonds?
A. secure
B. elective
C. mutual funds
D. money market accounts
C. mutual funds
A disadvantage of owning stocks is the:
A. high degree of risk.
B. low potential for return.
C. penalty for early withdrawal.
D. potential for loss of time and effort.
A. high degree of risk.