UNO Finance Capital Transferred Between Savers and Borrowers Questions – Description
Self-Test (CHAPTER 2)
Please choose at least 8 questions to answer them shortly.
1. Name three ways capital is transferred between savers and borrowers.
2. Why are efficient capital markets necessary for economic growth?
3. Distinguish between physical asset markets and financial asset markets.
4. What’s the difference between spot markets and futures markets?
5. Distinguish between money markets and capital markets.
6. What’s the difference between primary markets and secondary markets?
7. Differentiate between private and public markets.
8. Why are financial markets essential for a healthy economy and economic growth?
9. What’s the difference between a commercial bank and an investment bank?
10. List the major types of financial institutions, and briefly describe the primary function of each.
11. What are some important differences between mutual funds, Exchange Traded Funds, and hedge funds? How are they similar?
12. What are the differences between the physical location exchanges and the NASDAQ stock market?
13. What is the bid-ask spread?
14. Differentiate between primary and secondary markets.
15. What is an IPO?
16. Would you expect a portfolio that consisted of the NYSE stocks to be more or less risky than a portfolio of NASDAQ stocks?
17. What does it mean for a market to be “efficient”?
18. Is the market for all stocks equally efficient? Explain.
19. Why is it good for the economy that markets be efficient?
20. Is it possible that the market for individual stocks could be highly efficient, but the market for whole companies could be less efficient? Explain.
21. What is behavioral finance? What are the implications of behavioral finance for market efficiency?
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