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please solve it i need answers fast Topic 1 - Introduction to the Financial System Question 1 Which of the following statements is false? a)
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Topic 1 - Introduction to the Financial System Question 1 Which of the following statements is false? a) A surplus unit is a saver of funds who gives up consumption now to increase their future consumption b) A deficit unit purchases financial instruments c) The financial system facilitates the flow of funds between surplus units and deficit units d) A financial asset entitles the holder to future cash flows Question 2 Investors risk preference can be categorised as risk averse, risk neutral and risk seeking. A risk averse investor: a) Dislikes risk and will not tolerate risk b) Focuses only on expected return when making investment decisions c) Focuses only on the level of risk and chooses investments with high risk d) Will tolerate higher risk if compensated with a higher return Question 3 Financial institutions are categorised based on the differences between their sources and uses of funds. A type of financial institution is investment banks. Investment banks: a) Take deposits from customers and make loans b) Receive periodic premiums from policy holders c) Provide advice to clients and earn fee income d) Issue securities to borrow money and make loans to individuals and businesses Question 4 A financial market is a market where financial instruments are bought and sold. The capital market: a) is where longer term securities are issued and traded b) is supported by the foreign exchange and derivatives market c) Incorporates the equity market, corporate debt and government debt markets d) All of the given answers are correct Question 5 Financial instruments include equity, debt and derivatives. Which of the following is an example of an equity instrument? a) Commercial bills b) Preference shares c) A term loan from a bank d) A futures contractStep by Step Solution
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