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Capital Market Institutions - SS2 Economics Past Questions and Answers - page 1

1

Which of the following is an example of a capital market institution?

A

Savings and loan association

B

Credit card company

C

Stock exchange

D

Credit union

correct option: c
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2

What types of financial instruments are typically traded in capital markets?

A

Short-term debt securities

B

Long-term debt securities

C

Insurance policies

 

D

Commodities

correct option: b
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3

Which of the following is not a role played by capital market institutions?

A

Helping companies raise capital

B

Providing research and analysis to investors

C

Facilitating short-term borrowing

D

Enabling secondary trading of securities

correct option: c

(It is money market institutions that facilitate short-term borrowing and not capital market institutions)

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4

What is the primary function of investment banks as capital markets institutions?

A

Issuing and selling securities for companies

B

Providing savings accounts to customers

 

C

Offering credit cards to consumers

D

Selling insurance policies to businesses

correct option: a

(These institutions assist companies in issuing and selling stocks and bonds to investors)

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5

What are examples of capital market institutions?

Examples of capital market institutions include stock exchanges, investment banks, and mutual funds.

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6

What role do mutual funds play in capital markets?

Mutual funds are a type of investment company that pools money from many investors to purchase a diversified portfolio of stocks, bonds, or other securities. They provide individual investors with access to a wide range of investment opportunities and professional management of their investments.

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