1. Because of and a Depository Institution (DI) can offer highly liquid and low risk deposit accounts to customers so the DI can fund bank assets that have higher risk and are less liquid. A. Diversification; high equity returns B. Price risk; collateral C. Free riders, regulations D. Monitoring; diversification E. Primary markets; foreign exchange markets 2. If the original security issuer receives no new funds with given transaction, it must be a(n) transaction. A. capital market B. secondary market C. capital market D indirect E. direct 3. MOA A Financial Institution (FI) buys securities of one maturity having raised funds by issuing securities with a different maturity. This activity is described as A. transmission of monetary policy. B. maturity intermediation. asset diversification. a direct transfer of funds. E. denomination intermediation. 4. Capital market securities from one issuer have expected returns than for most money market securities from the same issuer, and the risk is generally A. higher; higher B. lower; lower C lower; higher D higher; lower E. similar; similar 5. Some factors promote some financial institutions to engage in other financial services like banking, security brokerage, insurance, etc. Which of these is not commonly one of those factors? A B. Changing regulations allow financial institutions to offer more financial services. The federal government requires them to do this. Global financial institutions have increased competition. There has been an increase in the need to manage the major risks at financial institutions. The cost of providing financial services is being reduced by improvements in technology. D E