SUMATIVE ASSESSEMENT - CH01 FMO

Which of the following are the features of the money market?

• Maturity of period is more than 1 year

• Highly Risky

• Unsecured Instruments

Which of these are the types of financial market?

• Money Market

• Capital Market

• Government Market

• Statutory Market

What are/is the major objectives of Capital Market?

• To mobilize resources for investments

• To facilitate buying and selling securities

• To facilitate the process of efficient price discovery

Which statements below is / are INCORRECT?

• Investment in the capital market requires huge / big financial outlay to invest compare to money market

• Capital market yields a higher return for investors than the money market

• Money market much safer than capital market

Financial Market is defined as .....

• Receive funds from deposits and premiums and in turn make loans to borrowers.

• Transfer funds from savers to borrowers.

• Anything generally accepted as a means of payment.

Participants in the financial market.

• Banks

• Brokers

• Car Dealers

• Financial Institutions

• Stock Exchange

Which statements below is incorrect?

• Create

  liquidity that allows

  businesses to grow and

  entrepreneurs to raise

  money for their ventures.

• Increase the risk by having information publicly available to investors and traders.

• Calm the economy by instilling confidence in investors.

• Investor confidence stabilizes the economy.

Answer explanation

Reduce risk by having information publicly available to investors and traders. Play a crucial role in managing risks by facilitating the diversification and transfer of risk through various financial instruments.