Financial Instruments and Economic Indicators Quiz
Test your knowledge on leading, lagging indicators, derivatives, options, & more in financial economics.
#1
What is the purpose of a stock option?
To grant ownership in a company
To provide the right to buy or sell a stock at a specified price within a certain period
To provide fixed income to the investor
To represent debt owed by a corporation
#2
What is the primary function of a central bank?
To regulate the stock market
To manage the country's monetary policy
To facilitate international trade agreements
To provide loans to commercial banks
#3
What is the primary function of the Securities and Exchange Commission (SEC)?
To regulate the stock market and protect investors
To set interest rates and manage monetary policy
To provide insurance for bank deposits
To oversee international trade agreements
#4
Which of the following is a characteristic of a bear market?
Rising stock prices
High investor confidence
Declining stock prices
Strong economic growth
#5
What is the purpose of a put option?
To grant ownership in a company
To provide the right to sell a stock at a specified price within a certain period
To provide fixed income to the investor
To represent debt owed by a corporation
#6
Which of the following is considered a leading economic indicator?
Gross Domestic Product (GDP)
Consumer Price Index (CPI)
Unemployment Rate
Building Permits
#7
Which of the following is a derivative financial instrument?
Stock
Bond
Option
Certificate of Deposit (CD)
#8
What does the Consumer Confidence Index (CCI) measure?
The level of optimism or pessimism among consumers regarding the economy
The level of inflation in consumer goods
The amount of disposable income available to consumers
The purchasing power parity of consumers
#9
Which of the following is NOT a component of the Dow Jones Industrial Average (DJIA)?
Apple Inc.
Microsoft Corporation
Coca-Cola Company
Boeing Company
#10
What does the term 'liquidity' refer to in finance?
The ease with which an asset can be converted into cash without affecting its market price
The amount of profit generated by an investment
The total value of assets owned by a company
The stability of a financial institution
#11
What is the purpose of a futures contract?
To represent ownership in a company
To provide fixed income to the investor
To guarantee the right to buy or sell an asset at a predetermined price on a future date
To provide voting rights in a corporation
#12
What is the primary role of a bond rating agency?
To facilitate trading of bonds in the secondary market
To provide investment advice to bondholders
To evaluate the creditworthiness of bond issuers
To regulate the issuance of bonds by corporations
#13
Which economic indicator is often referred to as the 'mother of all indicators'?
Consumer Price Index (CPI)
Gross Domestic Product (GDP)
Unemployment Rate
Producer Price Index (PPI)
#14
What is the purpose of a credit default swap (CDS)?
To provide insurance against the default of a particular bond or loan
To facilitate currency exchange between two parties
To provide financing for infrastructure projects
To regulate the issuance of corporate bonds
#15
What is the primary function of a central clearing counterparty (CCP) in financial markets?
To facilitate stock trading on a centralized exchange
To provide insurance against market crashes
To act as an intermediary for clearing and settling trades
To regulate the issuance of government bonds
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