ch02 - Financial Markets and Institutions, 6e...

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Financial Markets and Institutions, 6e (Mishkin/Eakins)  Chapter 2    1
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Overview  of the  Financial  System 2.1 
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Mul tiple  Cho ice
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1) 
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Every  financial market performs the following function:  A) 
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It determines  the level of interest rates.  B) 
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It allows  common stock to be traded.  C) 
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It allows loans  to be made.  D) 
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It channels  funds from lenders - savers to borrowers - spenders.  Answer:  
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Question Status: 
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Previous Edition 2) 
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Financial  markets have the basic function of  A) 
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bringing  together people with funds to lend and people who want to borrow funds.  B) 
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assuring that the swings in the business cycle are less pronounced.  C) 
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assuring that  governments need never resort to printing money.  D) 
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both A and B of  the above.  E) 
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both B and C of  the above.  Answer:  
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Question Status: 
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Previous Edition 3) 
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Which of  the following can be described as involving direct finance?  A) 
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A corporation's  stock is traded in an over - the - counter market.  B) 
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People buy  shares in a mutual fund.  C) 
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A pension fund  manager buys commercial paper in the secondary market.  D) 
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An insurance  company buys shares of common stock in the over - the - counter markets.  E) 
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None of the  above.  Answer:  
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Question Status: 
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Previous Edition 4) 
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Which of  the following can be described as involving direct finance?  A) 
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A corporation's  stock is traded in an over - the - counter market.  B) 
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A corporation  buys commercial paper issued by another corporation.  C) 
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ch02 - Financial Markets and Institutions, 6e...

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