Chapter 8

Question 1

Most transactions use___and ____as they are considered a more efficient way to do business is compared to the barter system

Answer 1

Cash and near-cash items

Question 2

Enumerate the three main roles of money

Answer 2

1. Medium of exchange, as it is generally accepted as payment for goods and services
2. a store of value, and the unit of account 3. a standard measurements that generally determines the value of things

Question 3

Used as a medium of exchange; it has value because everyone thinks that it has value

Answer 3

Money

Question 4

It is considered a legal tender, that currently, it is the form, by law, a debtor may require a creditor to accept in payment of a debt

Answer 4

Money

Question 5

Gaining popularity in the digital financial system

Answer 5

Bitcoins

Question 6

Are not regulated in any specific country, are considered a speculative asset, and are accepted by a few groups of people.

Answer 6

Bitcoins

Question 7

Network of institutions, markets, and contracts, that bring together lenders and borrowers

Answer 7

Financial system

Question 8

Two main players in the system

Answer 8

1. Lenders
   2.borrowers

Question 9

They believe that money that they have now has the potential of snowballing in the future. Hence they lend it to financial institutions like a bank.

Answer 9

Lenders

Question 10

Can be a household that needs to buy, but does not have enough money and hand to acquire it; a firm that needs some more capital to fund an asset; or the government that typically spends more than it owns.

Answer 10

Borrowers

Question 11

The lender is in Barrow were agreed to fulfill their goals a few exchanges in: (Enumerate them)

Answer 11

1. Banking system.
2. Government.
3. Stock market.

Question 12

This is where depositord are considered lenders, and those who loan funds for themselves, the bond market

Answer 12

Banking system

Question 13

May choose to acquire its funds, by issuing an IOU promising to pay on a regular basis, and the principle at a certain date

Answer 13

Government

Question 14

It is basically a place for ownership in a company may be sold and bought

Answer 14

Stock market

Question 15

Fluctuations in the stock market are not dependable metrics of _____

Answer 15

Economic well-being

Question 16

Changes in the stock market may just be reactions to _______in the performance of any economy or of the company

Answer 16

real or perceived changes

Question 17

True or false
Money is a liability of the central bank

Answer 17

True

Question 18

True or false
Real asset is something with intrinsic value

Answer 18

True

Question 19

What are examples of financial system?

Answer 19

1. Crowd sourcing of funds
2. raising capital from investors
3. distributing the risk that is attached to the investment

Question 20

It means committing funds to one or more assets, which can be a financial or real asset

Answer 20

Investment

Question 21

It may be understood as a part of wealth that may be used to fund the investment of another

Answer 21

Savings

Question 22

It is someone else’s liability and are manufactured by the stock market, or any financial institution

Answer 22

Financial asset

Question 23

Examples are valuable pieces of jewelry machines or other physical assets that may be traded in a hard market

Answer 23

Real asset

Question 24

It means that the stock market creates assets, traded that are intangible

Answer 24

Manufactured

Question 25

What are the five investment assets that are traded in the market?

Answer 25

Stocks Bonds Currencies Real estate Commodity

Question 26

Securities that mature, and less than one year that are traded in the money market

Answer 26

Short term instruments

Question 27

Mature more than a year that are traded in the capital market

Answer 27

Long-term instruments

Question 28

forms of financial instrument value of which is derived from another instrument

Answer 28

Financial derivatives

Question 29

forms of financial instrument value of which is derived from another instrument

Answer 29

Financial derivatives

Question 30

An example of financial derivatives were in the stock is the base, and the option would be its derivative

Answer 30

Stock option

Question 31

It refers to the coins pieces of stamped metals used as a trading medium. Any currencies used in the same way

Answer 31

Money

Question 32

It means money on hand

Answer 32

Cash

Question 33

The market for longer loanable funds

Answer 33

Capital market

Question 34

Instruments used as evidence of a borrowers that to a lender. It is used by companies to finance.

Answer 34

Debentures

Question 35

Enumerate the process of investment

Answer 35

Portfolio management Allocation of assets Construction decision

Question 36

Building that collection or set of assets

Answer 36

Portfolio management

Question 37

Splitting of the portfolio into five or less types of investment classes

Answer 37

Allocation of assets

Question 38

Choosing from the top down or bottom up approaches in portfolio management

Answer 38

Construction decision

Question 39

Tries to allocate assets by country or region,, as well as the type of asset

Answer 39

Top down portfolio management

Question 40

Looking at specific company, then investing in it with the tendency of investing in just one country and or one class

Answer 40

Bottom up

Question 41

Involves channeling of funds, by means of financial intermediaries, transferring and scheduling of risks, appropriation of the investment class and managing ownership of funds

Answer 41

Investment management

Question 42

Examination of the control of a company as exercised by its directors

Answer 42

Corporate governance

Question 43

What are the key players in financial systems?

Answer 43

Firm Household Government Financial intermediaries

Question 44

Businesses issuing securities, ( debt and equity) or financial instruments

Answer 44

Firm

Question 45

The one who lend in borrow from financial intermediaries

Answer 45

Household

Question 46

the one that never over funds and this considered always in shortage

Answer 46

Government

Question 47

It’s a one that positions between the debtors and the creditors

Answer 47

Financial intermediaries

Question 48

Are able to fund a technology based industry and employee more workers

Answer 48

Prospective venture capitalists

Question 49

Issued debenture and shares to public and other fund institutions that are expecting good returns from fixed or fixed assets

Answer 49

Capital markets

Question 50

Help address transactions that involve foreign currencies help raise funds for these companies and support the Forex requirement of some companies who are dealing with other countries

Answer 50

Foreign exchange markets

Question 51

Set as a policy is establishing development, banks and merchant banks to raise funding for infrastructure buildings

Answer 51

Economic liberalization

Question 52

Allow companies with investable fund stories in highly risky information and technology, business or promote other new ventures

Answer 52

Venture capitalist

Question 53

Would discourage migration from rural to urban areas

Answer 53

Equitable interest rates

Question 54

Having a good financial system allows balance in the industrial agriculture and service sectors

Answer 54

Sustain macro economics

Question 55

Equitable interest, interest interest rates offered in various places with discourage migration from rural to urban areas

Answer 55

Balance regional development

Question 56

Trade practice legislation, in terms of market, and the use of one common currency just like the European Union

Answer 56

Foster economic integration

Question 57

Vigorous financial systems in one economy, and potential investors in various sectors

Answer 57

Attract foreign investment

Question 58

Vigorous financial systems in one economy, and potential investors in various sectors

Answer 58

Attract foreign investment

Question 59

Loss and other legislation may be enforced to mitigate the risks of unwanted and speculative

Answer 59

Uphold fiscal policy

Question 60

Allows companies with investable funds to invest in highly risky information and technology, business or promote other new ventures

Answer 60

Infrastructure technology development

Question 61

It allows the issuance of letters of credit finance, them, and even offer to discount some financial instruments like bill

Answer 61

Trade development

Question 62

Helps address trans sections that involve foreign currencies help praise funds for these companies and support the Forex requirement

Answer 62

Capital securities market

Question 63

Opportunities for bunks and other financial institutions, like funds and other others, to have more skilled workers

Answer 63

Develop labor employment