43. Which of the following can be described as involving indirect finance?

A. A bank buys a U.S. Treasury bill from one of its depositors.

B. A corporation buys commercial paper issued by another corporation.

C A pension fund manager buys commercial paper in the primary market.

D. Both A and C of the above.

44. Financial markets improve economic welfare because

A. they allow funds to move from those without productive investment opportunities to those who have such opportunities.

B they allow consumers to time their purchases better.

C. they weed out inefficient firms.

D. they do all of the above.

E. they do A and B of the above.

45. A country whose financial markets function poorly is likely to

A. efficiently allocate its capital resources.

B. enjoy high productivity.

C. experience economic hardship and financial crises.

D. increase its standard of living.

46. Which of the following are securities?

A) A certificate of deposit

B) A share of Texaco common stock

C) A Treasury bill

D) All of the above

E) Only A and B of the above

47. Which of the following statements about the characteristics of debt and equity are true?

A. They both can be long-term financial instruments.

B. They both involve a claim on the issuer's income.

C. They both enable a corporation to raise funds.

D. All of the above.

E. Only A and B of the above.

48. Intermediaries who link buyers and sellers by buying and selling securities at stated prices are called

A. investment bankers.

B. traders.

C. brokers.

D. dealers.

E. none of the above.

49. An important financial institution that assists in the initial sale of securities in the primary market is the

A. investment bank.

B. commercial bank.

C. stock exchange.

D. brokerage house.