Financial Markets and Management Quiz

Primary market instruments are securities issued directly by companies to investors, such as stocks.

Mutual funds collect money from investors to invest in various assets, providing diversification and professional management.

Diversification involves investing in a variety of assets to minimize the impact of any one investment's performance on the overall portfolio.

Yield indicates the return on investment for a bond, representing the annual income as a percentage of its current price.

Futures contracts oblige parties to buy or sell assets at a set price on a specified date, providing a hedge against price fluctuations.

The coupon rate is the fixed annual interest rate paid on a bond as a percentage of its face value.

ROI measures the profitability of an investment relative to its cost.

Bulls are investors who are optimistic about the market and expect prices to rise, hence they buy securities.

Central banks regulate monetary policy and oversee the stability of the financial system, including controlling inflation.

Put options give the holder the right to sell an asset at a specified price within a specified period.

Liquidity measures how quickly an asset can be converted into cash without significantly affecting its price.

Investment banks assist companies in financial transactions, including mergers, acquisitions, and raising capital.

Balance sheets present a snapshot of a company's assets, liabilities, and equity at a given moment.

LIBOR is a benchmark interest rate representing the average interest rate at which banks lend to each other.

Market indices monitor and reflect the performance of a selection of stocks, representing a particular market or sector.

The Federal Reserve oversees the U.S. monetary system, regulating banks, and conducting monetary policy to maintain economic stability.

P/E ratio compares a company's stock price to its earnings per share, indicating the valuation and potential profitability of the company.

The SEC protects investors, maintains fair, orderly, and efficient markets, and facilitates capital formation through regulation.