Statement I: Users of the funds from finanical institutions and markets have the obligation to return the same without interest. Statement II: Financial instituions and markets are also concerned with creating financial asstes. Statement I is true. Statements I and II are false. Statement II is true. Statements I and II are true.
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Statement I: Users of the funds from finanical institutions and markets have the obligation to return the same without interest.
Statement II: Financial instituions and markets are also concerned with creating financial asstes.
Statement I is true.
Statements I and II are false.
Statement II is true.
Statements I and II are true.
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- Which of the following statements are true?I. Money markets are used to facilitate the transfer of short-term funds from individuals, corporations, or governments with excess funds to those with deficient funds. Even investors who focus on long-term securities tend to hold some money market securities because this enables them to maintain liquidity.II. Financial institutions manage their liquidity by participating in money markets. They may issue moneymarket securities when they experience cash shortages and need to boost liquidity. They can also sell holdings of money market securities to obtain cash.III. The value of a money market security represents the future value of the present cash flows generated by that security. Since money market securities represent debt, their expected cash flows are typically known.IV. The pricing of money market securities changes in response to a shift in the required rate of return by investors. The required rate of return changes in response to…Which of the following is not an economic purpose of financial instruments? a Allows transfer of fund from entities with excess funds (investors) to entities who needs funds (issuer) for business purposes (e.g. to pay for tangible assets). b Permit transfer of fund that allows sharing of inherent risk associated with the cash flows coming from tangible asset investment between the issuer and investor. c Allows the money market to be the preferred place for firms to temporarily store excess funds up until such time they are needed again by the organization. d All are economic purposes of financial instruments.The essential role of ____________ is to bring together the net users of funds and the net savers of A) Financial markets b) financial institution c) Financial claims d) primary markets
- Which of the following acts as an intermediary between the savers and investors' by mobilizing funds between them? a. Financial Markets b. Households c. Financial Instruments d. GovernmentWhich of the following is not a source of funds for immediate liquidity purposes? Question 9Answer a. Excess cash above regulatory reserve requirements. b. Funds borrowed on the money market. c. Proceeds from an IPO. d. Sale of liquid assets such as T-bills.Which of the following acts as an intermediary between the savers and investors by mobilising funds between them? a.Financial Markets b.Households c.Financial Instruments d.Government
- Due to the increased need for security for the performance of obligations arising from these transactions and due to the growing size of the financial system, where does the transfers of funds from one party to another are made?Which of the following best describe the flow of funds in a financial market? *a. suppliers of funds to demanders of fundsb. Financial market to suppliers of funds to demanders of fundsc. demanders of funds to suppliers of fundsd. suppliers of funds to financial institutions to demanders of fundsWho are the suppliers and demanders of funds in the financial system and in what ways can they become suppliers and demanders of funds?
- Illustrate with a diagram the flow of funds from lenders to borrowers in a financial system. Diagram must include: Savers Borrowers Financial markets Function of the financial intermediaries Function of the financial markets Direct finance Indirect financeAccording to IAS 32 Financial Instruments: Presentation, which of the following could be classified as financial assets? Bank overdraft Cash at bank Inventories A current asset investment A forward contract27.Which of the following statements are true?Statement I. Money markets are used to facilitate the transfer of short-term funds from individuals, corporations, or governments with excess funds to those with deficient funds. Even investors who focus on long-term securities tend to hold some money market securities because this enables them to maintain liquidity. Statement II. Financial institutions manage their liquidity by participating in money markets. They may issue money market securities when they experience cash shortages and need to boost liquidity. They can also sell holdings of money market securities to obtain cash.Statement III. The value of a money market security represents the future value of the present cash flows generated by that security. Since money market securities represent debt, their expected cash flows are typically known.Statement IV. The pricing of money market securities changes in response to a shift in the required rate of return by investors. The…