1. The New York Stock Exchange is an example of a:

A. physical exchange

B. virtual exchange

C. broker

D. financial intermediary

2. The total authorized capital in the company is divided up into small units and each individual unit is called a:

A. debenture

B. share

C. certificate of incorporation

D. allotmen

3. Which of the following is a money market instrument?

A) A Treasury note.

B) A federal funds loan.

C) A corporate bond.

D) A mortgage loan. 4. Which of the following is a capital market instrument?

A) A certificate of deposit.

B) A federal funds loan.

C) Commercial paper.

D) A Treasury bond.

5.When we talk about buying stocks on a margin, we are talking about:

A. buying stocks whose price has been significantly reduced

B. borrowing money to buy stocks and securing the loan with the stock

C. buying stocks a low price and selling when the price increase

D. buying stocks a high price and selling stocks before the price falls

6. Which of the following BEST describes the spot market?

i. The contract entered in the spot market becomes immediately effective prices are settled at current prices

ii. Securities can be traded and money can be transferred through internet; real time market for instant sale of commodities

iii. Does not involve primary activity and it is speculative in nature; here everything is in a fluid state.

iv. Market for the sale of securities or bonds collaterized by the value of mortgage loans A. i and ii only

B. ii and iii only

C. ii and iv only

D. ii, iii and iv only

8.A mortgage loan in which only interest is paid initially, followed by a large payment of the principal at maturity is known as a/an _______________ mortgage.

A. conventional

B. adjustable-rate

C. reverse annuity

D. balloon

the instrument at a strike price determined today, any time before the expiration date is known as a/an:

A. futures contract

B. option on future

C. option

D. derivative