International Finance And Treasury - Study Mode

[#336] Risk stating assets are sold at low prices because of sudden surge in withdrawals of liabilities is classified as
Correct Answer

(B) liquidity risk

Explanation

Solution: Risk stating assets are sold at low prices because of sudden surge in withdrawals of liabilities is classified as liquidity risk. Liquidity is the ability of a firm, company, or even an individual to pay its debts without suffering catastrophic losses.

[#337] In capital markets, major suppliers of trading instruments are
Correct Answer

(A) government and corporations

Explanation

Solution: In capital markets, major suppliers of trading instruments are government and corporations. Capital markets refer to the places where savings and investments are moved between suppliers of capital and those who are in need of capital. Capital markets consist of the primary market, where new securities are issued and sold, and the secondary market, where already-issued securities are traded between investors.

[#338] Transfer of financial instruments from suppliers of funds to users of funds without any intermediary in between is classified as
Correct Answer

(C) direct transfer

Explanation

Solution: Transfer of financial instruments from suppliers of funds to users of funds without any intermediary in between is classified as direct transfer. A direct transfer is a transfer of assets from one type of tax-deferred retirement plan or account to another. Direct transfers are not considered official distributions and are therefore not taxable as income or subject to any penalties for early distribution.

[#339] Type of financial markets in which corporations issues new funds to raise funds is classified as
Correct Answer

(B) primary markets

Explanation

Solution: Type of financial markets in which corporations issues new funds to raise funds is classified as primary markets. The primary market is where securities are created. It's in this market that firms sell (float) new stocks and bonds to the public for the first time. An initial public offering, or IPO, is an example of a primary market.

[#340] For other non-price conditions, increase in equilibrium interest rate leads to
Correct Answer

(D) decrease restrictiveness

Explanation

Solution: For other non-price conditions, increase in equilibrium interest rate leads to decrease restrictiveness.