Insolvency and Liquidity Risk at Financial Intermediaries: Quiz Questions and Answers - Pr, Quizzes of Finance

Download Insolvency and Liquidity Risk at Financial Intermediaries: Quiz Questions and Answers - Pr and more Quizzes Finance in PDF only on Docsity!  Insolvency risk at a financial intermediary (FI) is the risk Selected Answer: 5. risk that an FI may not have enough capital to offset a sudden decline in the value of its assets.  Question 2 10 out of 10 points Primary markets are markets where users of funds raise cash by selling securities to funds suppliers. Selected Answer: Tru e  Question 3 10 out of 10 points Financial intermediaries (FIs) can offer savers a safer, more liquid investment than a capital market security, even though the intermediary invests in risky illiquid instruments because: Selected Answer: 4. Both A and B  Question 4 10 out of 10 points Which of the following are money market instruments? Selected Answer: 1. Negotiable CDs  Question 5 10 out of 10 points Commercial paper is Selected Answer: 5. short term unsecured promissory note issued by a company to raise funds for a short time period  Question 6 10 out of 10 points The NYSE is an example of a secondary market Selected Answer: Tru e  Question 7 10 out of 10 points Secondary markets are markets used by corporations to raise cash by issuing securities for a short time period. Selected Answer: Fals e  Question 8