International Finance And Treasury - Study Mode

[#391] Market value size of outstanding instruments of capital markets depends on factors
Correct Answer

(D) both b and c

Explanation

Solution: Market value size of outstanding instruments of capital markets depends on factors number of issued securities and market prices of securities.

[#392] When maturities of liabilities and assets are mismatched and risk incurred by financial intermediaries then this risk is classified as
Correct Answer

(A) interest rate risk

Explanation

Solution: When maturities of liabilities and assets are mismatched and risk incurred by financial intermediaries then this risk is classified as interest rate risk. The interest rate risk, or market risk, refers to the chance that investments in bonds also known as fixed-income securities will suffer as the result of unexpected interest rate changes.

[#393] Depository institutions includes
Correct Answer

(B) commercial banks and thrifts

Explanation

Solution: Depository institutions includes commercial banks and thrifts. A depository is a facility such as a building, office, or warehouse in which something is deposited for storage or safeguarding. It can refer to an organization, bank, or institution that holds securities and assists in the trading of securities.

[#394] Major liabilities of commercial banks are
Correct Answer

(B) deposits

Explanation

Solution: Major liabilities of commercial banks are deposits. A deposit is a financial term that has multiple definitions.On the one hand, a deposit is a transaction involving a transfer of funds to another party for safekeeping. On the other, a deposit also refers to a portion of funds used as security or collateral for the delivery of a good.

[#395] Money market where securities are issued by governments to obtain funds for short term is classified as
Correct Answer

(A) money market instruments

Explanation

Solution: Money market where securities are issued by governments to obtain funds for short term is classified as money market instruments. There are several money market instruments in most Western countries, including treasury bills, commercial paper, bankers' acceptances, deposits, certificates of deposit, bills of exchange, repurchase agreements, federal funds, and short-lived mortgage- and asset-backed securities.