Economics Principles & Practices

Chapter 12: Financial Markets

Self-Check Quizzes

1
For people to use the savings of others, the economy must have a(n) _________ system, a network of savers, investors, and financial institutions that work together to transfer savings to investors.
A)saver
B)investment
C)transfer
D)financial
2
Financial institutions that pool the funds that savers provide and lend them to others are called financial __________.
A)go-betweens
B)intermediaries
C)investors
D)lenders
3
Finance companies, life insurance companies, pension funds, and real estate investment trusts are examples of __________ financial institutions, nondepository institutions that channel savings to investors.
A)nonbank
B)pension
C)insuratory
D)realtor
4
A __________ has three main components: the coupon, the maturity, and the par value.
A)bond
B)stock
C)rationing
D)mutual fund
5
In order to compare bonds, investors usually compute the bond's ________, the annual interest divided by the purchase price.
A)price-earnings ratio
B)past performance
C)future yield
D)current yield
6
The modern investor has a wide range of financial assets from which to choose. They vary in __________.
A)price, net worth, and safety
B)cost, maturity, and safety
C)tax status, maturity, and safety
D)cost, maturity, and net worth
7
When investors speak of the ___________ market, they mean a market where money is loaned for more than one year. Long-term CDs and corporate and government bonds that have more than a year to mature all belong to this category.
A)secondary
B)capital
C)money
D)primary
8
The oldest, largest, and most prestigious of the organized stock exchanges in the United States is the ____________.
A)Wall Street Exchange
B)Pacific Stock Exchange
C)American Stock Exchange
D)New York Stock Exchange
9
The _________ is a stock performance index that uses the price changes of 500 representative stocks as an indicator of overall market performance.
A)Standard & Poor's
B)Dow-Jones Industrial Average
C)Fortune 500
D)Market 500
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