#1
What is the primary function of financial markets?
To sell goods and services
To allocate capital and resources
To provide healthcare services
To enforce legal contracts
#2
What is the role of a central bank in financial markets?
Issuing corporate bonds
Regulating monetary policy and money supply
Facilitating stock trading
Providing insurance services
#3
What is the function of a futures contract in financial markets?
Buying and selling of stocks
Agreeing to purchase or sell an asset at a future date at a predetermined price
Issuing government bonds
Providing insurance services
#4
What is the role of a credit default swap (CDS) in financial markets?
Facilitating stock trading
Providing insurance against the default of a borrower
Issuing government bonds
Minimizing market volatility
#5
What does the term 'blue chip stocks' refer to in the context of financial markets?
Stocks with a low market capitalization
Highly reliable and financially stable stocks
Newly issued stocks
Stocks with speculative characteristics
#6
Which financial instrument represents ownership in a company?
Corporate bond
Preferred stock
Treasury bill
Mortgage-backed security
#7
What does the term 'IPO' stand for in finance?
International Portfolio Offering
Initial Public Offering
Investment Policy Objective
Internal Performance Oversight
#8
Which financial market is known for trading currencies between nations?
Equity market
Commodity market
Foreign exchange market
Derivatives market
#9
What is the purpose of a buyback (share repurchase) in corporate financing?
Issuing new shares to raise capital
Reducing the number of outstanding shares
Distributing dividends to shareholders
Acquiring other companies
#10
In the context of corporate financing, what does the term 'dividend' refer to?
Issuing new shares to raise capital
Payments made to shareholders from company profits
Buying back outstanding shares
Issuing long-term debt
#11
What is the purpose of a credit rating agency in the context of corporate financing?
To provide investment advice
To issue government bonds
To assess the creditworthiness of companies
To regulate financial markets
#12
In the context of financial markets, what does the term 'arbitrage' refer to?
Buying and holding assets for the long term
Exploiting price differences for profit
Issuing new shares to existing shareholders
Diversifying investment portfolio
#13
What does the term 'leverage' mean in the context of financial markets?
Increasing the risk of investments
Reducing the use of borrowed funds
Diversifying investment portfolio
Minimizing market exposure
#14
In the bond market, what is the relationship between bond prices and interest rates?
Inverse relationship
No correlation
Positive correlation
Constant relationship
#15
What does the term 'liquidity' mean in financial markets?
Ease of buying and selling without causing a significant price change
Investing in long-term assets
Reducing market volatility
Minimizing risk