Other Market Agencies - SS2 Economics Past Questions and Answers - page 1
Which of the following is an example of an other market agency?
Credit union
Investment bank
Insurance company
Stock exchange
What is the primary function of pension funds?
Providing insurance against risks
Facilitating the buying and selling of commodities
Helping individuals save for retirement
Generating high returns for investors
Which of the following is NOT a function of hedge funds?
Investing in a variety of financial instruments
Generating high returns for investors
Managing risk
Providing insurance policies
(Hedge funds are investment funds that invest in a variety of financial instruments to generate high returns for their investors, as well as taking on more risk than traditional investment funds, but they do not provide insurance policies. That is the work of Insurance companies)
What is the primary function of credit rating agencies?
Facilitating secondary trading of securities
Providing investment advice to individuals
Providing credit ratings and analysis of financial instruments
Buying and selling commodities
How do insurance companies and pension funds help individuals manage risk?
Insurance companies provide protection against various risks, such as accidents, illness, and natural disasters. Pension funds help individuals save for retirement by investing their contributions in various financial instruments, which can help protect against the risk of outliving their savings.
What is the difference between traditional investment funds and hedge funds?
Traditional investment funds typically follow a more low-risk investment strategy, such as investing in a diversified portfolio of stocks and bonds. Hedge funds, on the other hand, use a variety of strategies to generate returns for their investors, including taking on more risk than traditional investment funds.