Financial markets – Practice 1

 

Choose the correct answer:
  1. A money market security issued by large banks and corporations is  [a commercial paper]
  2. A foreign exchange agreement between two parties to exchange a given amount of one currency for another and, after a specified period of time, to give back the original amounts swapped is called  [a currency swap]
  3. A debt security, in which the authorized issuer owes the holders a debt and is obliged to repay the principal and interest (the coupon) at a later date, termed maturity is  [a bond]
  4. The right abbreviation used for foreign exchange rates or market is  [FX]
  5. An agent who buys or sells for a principal on a commission basis without having title to the property is [a broker]
  6. The risk of loss due to a debtor's non-payment of a loan or other line of credit (either the principal or interest (coupon) or both) is called  [credit risk]
  7. The practice of creating economic value in a firm by using financial instruments to manage exposure to risk is called [risk management]
  8. A dividend is the income received from  [shares]
  9. The financial instruments whose price and value derive from the value of assets underlying them are [derivatives]
  10. Markets which are characterized by optimism, investor confidence and expectations that strong results will continue are called  [bull markets]