In a world without financial institutions, the fund flows between households and corporations are likely to be low becauseA.households tend to prefer shorter, more liquid securities.B.households are able to monitor the activities of the corporation more closely than financial institutions.C.households tend to prefer direct investments in corporate securities.D.the securities issued by financial institutions are more attractive to households than the securities issued by corporations. E.households are less likely to face price risk when corporate securities are sold.

Which of the following statements is FALSE?A.In a world without FIs, the level of fund flows between household savers and the corporate sector is likely to be low.B.In a world without FIs, the users of corporate funds in the economy would have to directly approach the household savers of funds in order to satisfy their borrowing needs.C.Households can only be the savers or the providers of funds if they consume less than they could earn.D.Households are often averse to directly investing in corporate securities because of three types of costs: monitoring cost, liquidity costs, and interest rate risk.E.The long-term nature of corporate equity and debt securities would likely eliminate at least a portion of those households willing to lend money.

Which type of financial institutions is more highly exposed to liquidity risk? A.Commercial banks B.Property-casualty insurance companies.C.Life insurance companies.D.Hedge fundsE.Mutual funds.

Which of the following is not a financial resource for a household?WagesLoansRetained earningsDividend on investment

Which of the following is not true of financial institutions?Group of answer choicesthey encompass a broad range of business operations within the financial services sector including banks, insurance companies, brokerage firms, and investment dealers.they are vital to a functioning capitalist economy in matching people seeking funds with those who can lend or invest it.they are uniquely American institutions found only in the U.S.they vary by size, scope, and geography.company engaged in the business of dealing with financial and monetary transactions such as deposits, loans, investments, and currency exchange.

Which of the following statements about financial markets is not true? Group of answer choicesAn inital public offering is a way for companies to raise financial capital to build or expand their business.All of these.Investment banks facilitate the IPO connection between investors and entrepreneurs.Once investors purchase stock, they become part owners in the company and take on the risk of company failure.Bond purchasers become partial owners of the company they invest in.