Chapter2AnOverviewoftheFinancialSystem.pptVIP

Chapter 2:Q1 Which of the following statements about the characteristics of debt and equity is false? They can both be long-term financial instruments. They both enable a corporation to raise funds. They both involve a claim on the issuer’s income. They can both be short-term financial instruments. Chapter 2:Q6 A short-term instrument issued by well-known corporations is called municipal bonds. corporate bonds. commerical paper. commercial mortgages. Chapter 2:Q15 Typically, borrowers have superior information relative to lenders about the potential returns and risks associated with an investment project. The difference in information is called risk sharing. asymmetric information. moral selection. adverse hazard Chapter 2:Q18 _________ are financial intermediaries that acquire funds by selling shares to many individuals and using the proceeds to purchase diversified portfolios of stocks and bonds. Mutual funds Insurance companies Financial companies Investment banks * * * * * * * * * * * * * * * * * ? 2016 Pearson Education Ltd. All rights reserved. 1-* ? 2016 Pearson Education Ltd. All rights reserved. 20-* ? 2016 Pearson Education Ltd. All rights reserved. 20-* ? 2016 Pearson Education Ltd. All rights reserved. 19-* ? 2016 Pearson Education Ltd. All rights reserved. 19-* ? 2016 Pearson Education Ltd. All rights reserved. 20-* ? 2016 Pearson Education Ltd. All rights reserved. 20-* ? 2016 Pearson Education Ltd. All rights reserved. 19-* ? 2016 Pearson Education Ltd. All rights reserved. 19-* Chapter 2 An Overview of the Financial System Preview This chapter presents an overview of the study of financial markets and institutions. Learning Objectives Compare and contrast direct and indirect finance. Identify the structure and components of financial markets. List and describe the different types of financial market instruments. Recognize the international dimensions of financial markets. Learning Objectives Summarize the roles of trans