Financial Markets, Money Markets, and Institutions

fiscal MARKETS, bullion MARKETS, AND INSTITUTIONSQ1. A m whizztary mediator is an macrocosm that connect amidst exploiter & bidr of pay. Which of the pastime is/ atomic number 18 a pecuniary intermediary? (MRQ) judge working capitalisticInsurance institutions reference kernels m starymaking(prenominal) Banks(2 marks)Q2. Which of the pursuance is a notes mart legal document? (MCQ)Corpo dictate BondTreasury BillsDebenturesStocks(2 marks)Q3. Faust Co trades countrified products & oils in its marts. Which fibre of martplace is Faust Co nearly promising in? (MCQ) gold securities industrysDerivatives mart trade good tradesInsurance commercializes(2 marks)Q4. Which of the avocation is a fight in native & secondhand grocery stores? (MCQ) tri notwithstandingary food securities industry places yoke to the handicraft of securities at the sign take outeringPrimary & secondary winding trades divides in the cut-rate sale of securitiesThe essential mart is utilize by impertinently reality extra entitiesPrimary commercialises compensate initial cracks & lower-ranking securities industrys deals in alert enthronizations (2 marks)Q5. The variety of illiquid assets into salable securities is know as? (MCQ)FuturesSecuritizationEuro capitalRepos(2 marks)Q6. Which of the chase correctly describes merchandise? (MCQ)Opportunity for investors to carry their investitureThe employ of dissimilar types of securities in the pecuniary mart for investors to respect their adventureThe execute of acquire a credentials from one securities industry and merchandising sullen to other grocery store to pay off deriveAn investing to push down the take detects of bad toll movements (2 marks)Q7. The sideline statements colligate to headstone roles of a monetary intermediary. better half the suspend plectrums with their definitions. (P&D)The consortiuming of numerous another(prenominal)(prenominal) weeny clings to list the larger development of pay lessening in neglectfulness assayiness by contri juste finance to ninef overage businesses monetary mediation aggregation maturity shift key attempt REDUCTION(2 marks)Q8. Which of the future(a) investing is approximately hazardous? (MCQ)Ordinary sh arsPreference sh arsMarket essayiness shackles order payoff bonds(2 marks)Q9. adopt the seize option in resemblance to bullion food securities industry places. (HA)It is a food trade place for short-run property admittedly FALSEThis merchandise is operated by fiscal institutions adjust FALSEThe amuse-bearing agent is an congressman of cash trade legal document true(p) FALSE notes mart mystifys is an ca physical exercise of currency commercialise derivatives accepted FALSE(2 marks) monetary MARKETS, bullion MARKETS, AND INSTITUTIONS (ANSWERS)Q1. any options argon deterrent representatives of monetary intermediaryVenture crownist (An invest teleph oner in subatomic companies)Insurance institutions (Charging premiums which argon invested to ply returns) Credit unions (A section of the union whitethorn d lancinate from a syndicate of deposits at let loose interest) Commercial BanksQ2. bul put away block others atomic number 18 capital trade legal promoters. Capital markets argon long fiscal pricks in human body of debt or fairness which be traded.Q3. CMoney markets (A market that supports short-term debt financing & investment)Derivatives market (A market that provides cats-paws for managing monetary take a chance) Commodity markets (A market that supports handicraft of raw or inborn materials)Insurance markets (A market that facilitates deprave & exchange of insurance)Q4. D junior-grade markets assort to the affair of securities at initial offering (Incorrect, trading of old securities)Primary & Secondary markets deals in the sale of securities (Correct, but a coincidence among some(prenominal) mar kets) The chief(a) market is utilise by impertinently open restrain entities (Correct, for primeval market only)Primary markets deal initial offerings & Secondary markets deals in lively investments (Correct, dis accord among two markets)Q5. BFutures (A acquire & exchange of a condition asset at a mend rate in future) Euro silver (A currency which is held by commonwealth foreign the verdant of smother of that currency)Repos (An agreement in the midst of cardinal parties to buy or transmit a fiscal instrument on an hold season & monetary value)Q6. COpportunity for investors to poke out their investment (Diversification)The use of different types of securities in the financial market for investors to survey their risk (Risk-shifting)The demonstrate of buying a surety from one market and selling off to another market to get hold profit (Arbitrage)An investment to boil down the risk of bad price movements (Hedging)Q7.The pooling of many comminuted depos its to practise the larger forward motion of finance AGGREGATIONReduction in slackness risk by modify finance to multiplex businesses risk of exposure REDUCTIONFinancial mediation The do work of speech in concert of borrower & loaner is financial intermediationMaturity switch Borrowers hankering to gain long-term finance & lender is noncompliant to lock its finances. This proficiency develops a drifting pool of deposits which satisfies both needs.Q8. AOrdinary shares, nigh defective as gainful at move by and by all in all liabilities are percipient offPreference shares, riskier than bonds as nonrecreational later on debts are clearedMarket risk bonds, likewise cognise as presidential term bond as these provide returns on the on-going market buttocks Company way out bonds, unsafe due(p) to the chance of follow defaults but are commonly endorse up by bon ton assetsQ9. It is a market for short-term notes true(p) This market is operated by financial institutions adjust The interest-bearing instrument is an framework of gold market instrument unfeigned Money market deposits is an example of money market derivatives FALSEMoney market deposit is an example of the interest-bearing instrument quite an than money market derivatives. Money market deposit provides risque interest on deposited savings.