Capital markets reduce risk for investors because

brokerage firms study issuers reflected in stock/bond prices

The risk to an investor who buys stock is that the

price of the stock might go down

price of using someone else's money

someone who commits money in order to earn a profit

Secondary markets for stocks and bonds exist to allow

stock or bond owners to trade with ones who want to own them

Capital markets bring buyers and sellers together to

trade stocks, bonds, currencies and other financial assets

Which of the following do not benefit from capital markets?

Governments who want toissue stock

loan made by investors to acompany or government

share of ownership in a company

Different types of stock and bonds held by an investor

Investors earn money on bonds when the

company makes an interest payment.

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Capital Markets

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Questions 15

Answers

1
Capital markets reduce risk for investors because
banks require consumers to complete loan applications
brokerage firms study issuers reflected in stock/bond prices
regulators provide a risk index for all stocksand bonds
guaranteed earnings to those participating in capitalmarkets
2
The risk to an investor who buys stock is that the
company may be unable repay the loan
company may expand across the country
price of the stock might go up
price of the stock might go down
3
Interest is the
payment made to land owners and other natural resources
salary that investment brokers earn
amount entrepreneurs receive after all costs have been paid
price of using someone else's money
4
An investor is
someone who earns interest from loaning money
someone who studies stocks
someone who commits money in order to earn a profit
someone who pays interest to borrow money
5
Secondary markets for stocks and bonds exist to allow
governments to issue stocks
stock or bond owners to trade with ones who want to own them
over-the-counter markets to issue IPOs
consumers to take out loans
6
Which of the following is not an example of a market?
Checking accounts
Bond Markets
Online retailers
Car dealerships
7
Capital markets bring buyers and sellers together to
buy special goods and services not available anywhere else
sell goods and services at extremely low prices
trade stocks, bonds, currencies and other financial assets
barter goods and services in exchange for stocks and bonds
8
Which of the following do not benefit from capital markets?
Investors hoping to earn returns on financial investments
Governments who want toissue stock
Businesses and governments in need of financial capital
Employees of a company that just issued a successful IPO
9
A bond is a
loan made by investors to acompany or government
contract that gives an investor the right to trade
share in the ownership of a company
10
A stock is a
checking account
consumer loan
loan to a business or government
share of ownership in a company
11
To issue stock, a company or entrepreneur works through investmentbrokers to sell stocks in the
bond market
over-the-counter market
primary market
secondary market
12
What is a portfolio?
Different types of stock and bonds held by an investor
Investors hoping to earn returns on financial investments
A set of drawings in a folder
Employees of a company that just issued a successful IPO
13
An IPO is an
Initial Public Offering
Instant Public Offering
Internal Public Offering
Instant Public Opening
14
Investors earn money on bonds when the
price of the company stock goes up
company pays a dividend
company sells stock
company makes an interest payment.
15
Without capital markets entrepreneurs would need to _____________ toexpand.
sell stock
sell bonds
save enough money
buy stock

Capital Markets Flashcards | StudBud