1. Which of the following best describes the role of financial markets?
Financial markets transfer funds from those who need funds to those who have excess
funds.
Financial markets primarily cater to government institutions and international organizations.
Financial markets solely deal with short-term securities trading.
Financial markets are responsible for setting interest rates and government bond yields.
2. In which types of markets do investors buy and sell existing securities?
Derivative markets
Primary markets
Secondary markets
Capital markets
3. Which of the following types of institutions accept deposits from surplus units and provide credit to
deficit units, primarily through loans and purchases of securities?
Depository institutions
Brokerage firms
Non-depository institutions
Investment banks
4. Which of the following acts seeks to ensure that businesses disclose accurate financial information for
investors participating in financial markets?
Dodd–Frank Wall Street Reform and Consumer Protection Act
Glass–Steagall Act
Gramm–Leach–Bliley Act
Securities Act of 1933
5. Which of the following best describes the purpose of derivative securities in financial markets?
Risk management and speculation
Corporate financing and debt issuance
Regulatory compliance and reporting
Long-term investment and stability
6. Which of the following types of institutions play a critical role in financial intermediation by generating
funds from sources other than deposits?
Mutual funds
Credit unions
Insurance companies
Commercial banks
7. Which of the following regulations has a primary goal ensuring that businesses disclose accurate
financial information to investors participating in financial markets?
The JOBS act
The Affordable Care Act
The Sarbanes–Oxley Act of 2002
The Interest and Risk Act
