Financial markets and institutions act as a risk reducer in that:

Group of answer choices

They make the financial system safer to invest in.

They sell insurance products to reduce the exposure to financial and physical losses.

They insure the value of everyones savings.

They only sell securities with limited or no risk.

A deficit-budget unit:

Group of answer choices

Spends more than it earns.

Spends exactly what it earns.

Earns more than it spends.

In the direct transfer of funds, the parties:

Group of answer choices

Use an investment banker.

Know each other.

Use the U.S. Treasury.

Use a financial intermediary.

The primary financial markets are:

Group of answer choices

The oldest markets in any country.

The markets in the countrys major financial center.

Where securities are traded.

Where securities are initially issued.

A major difference between the New York Stock Exchange (NYSE) and the NASDAQ market is:

Group of answer choices

The NASDAQ has a physical location; whereas the NYSE is a network of computers.

Generally, younger, high-tech firms are on the NASDAQ; older, more established firms trade on the NYSE.

The NASDAQ has listing requirements for its stocks; the NYSE does not.

The NASDAQ lists only stocks of small firms; the NYSE lists the stocks of both large and small firms.

Exchange traded funds (ETFs) are portfolios of:

Group of answer choices

The shares of the stock exchanges.

Stocks that cannot be purchased individually.

The shares of major investment banks

Stocks that trade as a single investment.

An advantage of being listed on a physical stock exchange is that the listed company:

Group of answer choices

Can report higher profits.

Finds it easier to sell future stock issues.

Might have a lower cost of capital through the prestige of being listed.

Receives special treatment from the government.