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

1

What is the primary function of capital market institutions?

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A

To provide a platform for buying and selling securities

B

To provide investment advice to investors

C

To manufacture securities

D

To regulate financial markets

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2

What is the role of capital market institutions in managing risk?

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A

Providing risk management tools such as derivatives

B

Pricing securities

C

Facilitating capital raising

D

None of the above

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3

What is the benefit of providing liquidity to investors?

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A

Enables investors to buy and sell securities quickly and easily

B

Provides investment advice to investors

C

Facilitates capital raising

D

None of the above

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4

How do capital market institutions contribute to economic growth and development?

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A

By channelling savings from investors into productive investments

B

By providing liquidity to investors

 

C

By regulating financial markets

D

By managing risk for investors

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5

List three examples of securities that are traded on capital markets.

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6

What is the role of capital market institutions in pricing securities?

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