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QUEZON CITY
COLLEGE OF BUSINESS AND ACCOUNTANCY
FINANCIAL MARKETS
FMRK211
PRELIM EXAMINATION
FIRST SEMESTER, AY–2019-2020
GENERAL DIRECTIONS
1. Read and carefully understand each statements before determining the correct
answers.
2. Encode the correct answer
3. Manage your time and complete this examination within 3 hours.
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15. In the United States, government II. MULTIPLE CHOICE : Choose the
bonds are issued by the letter of the correct answer
Department of Treasury which are
in the form of treasury bills issued 21. This is a trading exchange where
with a maturity of one year or transactions takes place in a less
lesser than one year; Treasury organized market. Markets have
bonds which are issued with been much less regulated than
longer maturities up to 20 years. exchanges.
A. True A. Over the counter market
B. False B. Primary market
C. Secondary market
16. Interbank market exists in D. Money market
London in which major banks ,
other large financial institutions 22. This is a type of derivative where
and some large financial parties engage in a binding
institutions and non-financial agreement to transact a given
corporations negotiate short-term asset at a pre-specified future
unsecured loan agreements. The point in time and at a pre-
market is centered in London . The specified price.
interest rates set on these loans A. Future contract
are called LIBOR rates. The LIBOR B. Call Options
rate are used as benchmarks in C. Forward contract
other debt and capital investment D. Put Options
contracts as the bank financing
costs spill over to these rates. 23. This type of government bond is
A. True issued by the US Department
B. False Treasury with a maturity between
two to ten years. They promise to
17. Long-term investors keep track of pay interest at semi-annual basis
their risk exposure through which are considered as coupon
exposure to specific industries, payments.
ownership of bonds and stocks A. Treasury bills
issued by different companies and B. Treasury notes
macroeconomic factors : exposure C. Treasury bonds
to varied interest and foreign D. Bullet bonds
exchange rates.
A. True 24. This type of financial institution
B. False take savings in the form of annual
premiums and further invest these
18. Financial markets are not only funds in stocks, bonds, real estate
facilitating the transfer of and mortgages.
resources but also ensuring that A. Mutual funds
the capital flows to the most B. Savings and loan association
efficient projects. C. Life insurance companies
A. True D. Pension funds
B. False
25.The following are the functions of
19. Small investors can obtain an the central bank , EXCEPT:
investment exposure to real estate A. Decrease the money supply by
markets without physically buying offering commercial banks to
real properties. This type of deposit money at high interest rate
investment is called Real-Estate B. Reduce liquidity in the financial
Investment Scheme. markets
A. True C. Push economic growth through
B. False enhancing lenders to engage more
in borrowing funds of loan
20. A stock is a security issued by a financing
corporation. The holder of the D. Supervise and regulate financial
ownership includes both cash flow markets
tights and control rights. These
privileges are granted both to
common and preference
shareholders.
A. True
B. False
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QUIZ :
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