FINC 3310 Leavell Exam 1
money market is the financial market in which only short-term debt instruments are traded.
Brokers are agents of investors who match buyers with sellers of securities
real interest rate more accurately reflects the total cost of borrowing.
Bonds with relatively low risk of default are called
investment grade bonds.
Financial institutions exist to
lower transactions costs
efficiently move money between savers and
users of money.
Money is defined as
anything that is generally accepted in payment for goods and services or in the
repayment of debt.
Every financial market performs the following function:
it channels the funds from lenders-savers to
Typically, increasing interest rates
discourages corporate investments.
The price paid for the rental of borrowed funds is commonly referred to as the
A country whose financial markets function poorly is likely to
experience economic hardships and financial
Long term debt and equity instruments are traded in the
A corporation acquires new funds only when its securities are sold in the
Foreign currencies that are deposited in banks outside the home country are known as
A loan that requires the borrower to make the same payment every period until the maturity date is called
fixed payment loan.
A coupon bond pays the owner of the bond
a fixed interest payment every period and repays the face
value at the maturity date.