Econ 3131
1. The securities, intermediaries, and markets that exist to match savers and borrowers comprise the financial ________. a. system
b. market
c. economy
d. security
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2. A contract in which a borrower promises to compensate the lender in the future is called a financial ________. a. stock
b. debt
c. investment
d. security
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3. A contract that makes the owner of a security a part owner of the company that issued the security is known as a(n) ________ security. a. debt
b. equity
c. bond
d. economic
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4. A payment (or series of payments) made by the borrower to the investor in a debt security in addition to repayment of the principal is called: a. maturity.
b. interest.
c. dividend.
d. bonus.
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5. A dividend is the periodic payment made on a(n) ________ security. a. equity
b. debt
c. bond
d. money
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6. When savers buy securities only from borrowers, they are using ________ finance. a. indirect
b. intermediate
c. macroeconomic
d. direct
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7. When savers invest through financial intermediaries, they are using ________ finance. a. intermediate
b. indirect
c. macroeconomic
d. direct
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8. Which of the following is NOT an example of a financial intermediary? a. commercial bank
b. savings institution
c. household
d. life insurance company
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9. Diversification means ownership of ________ by a(n) ________. a. one security; investor
b. one security; borrower
c. a variety of securities; borrower
d. a variety of securities; investor
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10. Which of the following is NOT a function of financial intermediaries? a. Helping savers concentrate on just one financial investment.
b. Gathering information about borrowers.
c. Matching borrowers and savers who have different time
b. market
c. economy
d. security
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2. A contract in which a borrower promises to compensate the lender in the future is called a financial ________. a. stock
b. debt
c. investment
d. security
•
3. A contract that makes the owner of a security a part owner of the company that issued the security is known as a(n) ________ security. a. debt
b. equity
c. bond
d. economic
•
4. A payment (or series of payments) made by the borrower to the investor in a debt security in addition to repayment of the principal is called: a. maturity.
b. interest.
c. dividend.
d. bonus.
•
5. A dividend is the periodic payment made on a(n) ________ security. a. equity
b. debt
c. bond
d. money
•
6. When savers buy securities only from borrowers, they are using ________ finance. a. indirect
b. intermediate
c. macroeconomic
d. direct
•
7. When savers invest through financial intermediaries, they are using ________ finance. a. intermediate
b. indirect
c. macroeconomic
d. direct
•
8. Which of the following is NOT an example of a financial intermediary? a. commercial bank
b. savings institution
c. household
d. life insurance company
•
9. Diversification means ownership of ________ by a(n) ________. a. one security; investor
b. one security; borrower
c. a variety of securities; borrower
d. a variety of securities; investor
•
10. Which of the following is NOT a function of financial intermediaries? a. Helping savers concentrate on just one financial investment.
b. Gathering information about borrowers.
c. Matching borrowers and savers who have different time