Financial Management Quiz

What is the primary function of financial markets?

• To provide loans to individuals

• To control inflation

• To enhance capital allocation

• To regulate government spending

Which type of market involves buying or selling assets for immediate delivery?

• Futures Market

• Primary Market

• Spot Market

• Secondary Market

What is an Initial Public Offering (IPO)?

• A market for secondary trading

• A type of bond

• The first sale of stock by a private company

• A loan from a bank

Which of the following is NOT a type of financial institution?

• Commercial Bank

• Investment Bank

• Insurance Company

• Retail Store

What do capital markets primarily deal with?

• Real estate transactions

• Short-term loans

• Long-term securities

• Currency exchange

What is the role of a stock exchange?

• To provide loans to businesses

• To facilitate the buying and selling of stocks

• To regulate interest rates

• To issue new securities

Which of the following is a characteristic of an efficient market?

• Prices are fixed by the government

• Prices are always rising

• Prices reflect all available information

• Only insiders can make profits

What distinguishes primary markets from secondary markets?

• Primary markets are for short-term loans, while secondary markets are for long-term loans

• Primary markets are for government bonds, while secondary markets are for stocks

• Primary markets are regulated, while secondary markets are not

• Primary markets deal with new securities, while secondary markets deal with existing ones

What is the intrinsic value of a stock?

• The price set by the government

• The price at which it is currently trading

• The price based on expected future cash flows

• The price that is always higher than market price

Which of the following is a money market instrument?

• Stocks

• Treasury Bills

• Real Estate

• Bonds