Financial markets – Practice 1
Choose the correct answer:
- A money market security issued by large banks and corporations is [a commercial paper]
- 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]
- 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]
- The right abbreviation used for foreign exchange rates or market is [FX]
- An agent who buys or sells for a principal on a commission basis without having title to the property is [a broker]
- 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]
- The practice of creating economic value in a firm by using financial instruments to manage exposure to risk is called [risk management]
- A dividend is the income received from [shares]
- The financial instruments whose price and value derive from the value of assets underlying them are [derivatives]
- Markets which are characterized by optimism, investor confidence and expectations that strong results will continue are called [bull markets]