MBF - The Financial System

Question 1

What is the maturity of a money market instrument?

Accepted Answer

less than 12 months

Question 2

An individual purchases shares in their personal share trading account, this is an example of

Accepted Answer

Direct Financing

Question 3

What is the main role of capital markets?

Accepted Answer

Provide capital for firms over a long period of time

Question 4

What is an example of indirect financing?

Accepted Answer

An investor owns $1million in a superannuation fund

Question 5

Who are referred to as surplus spending units (SSU)?

Accepted Answer

Units whose income exceeds planned expenditure

Question 6

What is a role of the money market?

Accepted Answer

All of the above

Question 7

What is the risk financial institutions are exposed to?

Accepted Answer

All of the above, plus a lot more

Question 8

Which type of financing method does not use a financial intermediary?

Accepted Answer

Direct

Question 9

What problem does a financial intermediary solve?

Accepted Answer

When DSUs cannot find SSUs

Question 10

In Australia, which banks are considered the 'Big 4'?

Accepted Answer

NAB, ANZ, CBA, Westpac

Question 11

What does the financial system consist of?

Accepted Answer

Financial markets and financial institutions

Question 12

What is an example of a capital market instrument?

Accepted Answer

Corporate bonds and government bonds

Question 13

Who is commonly referred to as the Wolf of Wall Street?

Accepted Answer

Jordan Belfort

Question 14

What is it called when shares are issued for the first time?

Accepted Answer

Initial public offering

Question 15

Does managing risk mean that risks are eliminated?

Accepted Answer

No

Question 16

Where are financial claims initially created and sold by DSUs?

Accepted Answer

Primary markets

Question 17

What is someone called if they own a share in a company? (Answer with the MOST right answer)

Accepted Answer

Shareholder or equityholder

Question 18

If someone thinks a stock is going to increase in value, what are they said to be?

Accepted Answer

Long

Question 19

When buying a share, what is a market order referred to as?

Accepted Answer

Buy or sell at the best price available at the time

Question 20

What is a characteristic of a money market instrument?

Accepted Answer

All of the above

Questions 20