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Financial Markets ( Stage 3 ) Questions & Answers For Mid Term Examination 2018-2019

This document provides answers to questions about financial instruments, including stocks, bonds, bank loans, and insurance, as well as the functions, types, and rights associated with them. It also covers the definition and roles of financial markets, including primary and secondary markets, and the forms of financial markets.

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Financial Markets ( Stage 3 ) Questions & Answers For Mid Term Examination 2018-2019

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  1. Financial Markets( Stage 3 )Questions & Answers For Mid Term Examination2018-2019

  2. 2018-2019 Financial MarketsQuestions & AnswersChapter 1 Financial InstrumentsQ 1 : What are Financial Instruments ? Financial Instruments are securities, like Stocks, Bonds, Bank Loans, and insurance .Q 2 : Define Financial Instrument ? Financial Instrument is : 1. A written Legal obligation. 2. Obligate one to transfer money to another. 3. Specifies future payment. 4. Specifies certain condition. 21 Questions

  3. Q 3: What are Insurance Contracts ?Are examples of financial instrument that transfers risk from individuals to an insurance company.Q 4 : What are Financial Instruments Functions? 1. It can act as a means of payment. 2. It can also be store of money. 3. It allow for transfer of risk.

  4. Q 5 : What is stock : Stock represents a share in the property of corporation.Q 6 : What are the types of stocks ?1. Common Stocks 2. Preferred Stocks ?Q 7 : What are common stockholders rights : 1. They are the owners of a company. 2. They elects the board of directors. 3. They can receive annual cash payments, called dividends, when the company is profitable.

  5. Q 8 : Why a company ‘ s stocks prices rises ?When a company doing well and prospers.Q 9 : Why a company ‘ s stocks prices falls ?When a company not doing well and falters. Q 10 : When a company is profitable more people want to --------- its stocks, and when a company is not profitable more people want to --------- its stock .

  6. Q 11 : What is Bond ?Bond represents Long-term Loan.Q 12: Writethe variables that characterize bond ?1. its par value 2. its coupon rate 3. its maturity dateQ 13 : What are the Bondholders rights ? 1. They receive a specific annual interest.2. They receive all par value of bonds at maturity date 3. They receive their full financial rights first.

  7. Q 14 : What are Preferred Stocks ? Preferred stocks have a hybrid nature, they are similar to common stocks in some aspects and to bonds in others.Q 15 : What is Home Mortgages?It is a loan that is used to purchase real estate.

  8. Financial MarketsChapter 2 Financial MarketsQ 16 : Define Financial Market ?The place where Financial instruments are bought and sold .Q 17 :The roles of the Financial Markets are : a.They offer ---------- and ---------- Liquidity .b.They pool and ---------------- ----------------- .c.They allow --------------------------------------- .

  9. Q 18 : Write the types of Financial Markets:The types of financial markets are :1. Primary Financial Markets. 2. Secondary Financial Markets.Q 19 : Complete the followings:1. In primary markets people can buy and sell ------- . 2. In secondary markets people can buy and sell ----.

  10. Q 20 : Write the forms of Financial Markets?The forms of financial markets are : 1. Debt Market 2. Equity Market 3. Derivative MarketQ 21 : Complete the followings :1. Debt Market is for --------------------------- . 2. Equity Market is only for ------------------ . 3. Derivative Market is for ---------------- that designed to ------------------. _________________________________

  11. Topic 3 Stage 3 FM 2018-2019Financial MarketIs the place where financial instruments are bought and sold.Types of Financial MarketsFirst : Primary Financial MarketsIn which people can buy and sell newly issued securities.Second : Secondary Financial MarketsIn which people can buy and sell existing securities . First Semester

  12. The roles of the Financial MarketsFinancial Markets serve three roles :1. They offer savers and borrowers liquidity.2. They pool and communicate information.3. They allow risk sharing.

  13. The structure of Financial Markets There are lots of financial markets like :Stocks market, Bonds market , credit market, currency trading, and new securities …There are three possibilities to grouping them :1. by a new financial instruments are sold and resold. 2. by the way they trade financial instruments.3. by based on the types of financial instruments .

  14. Forms of Financial Markets1. Debt Market : Are for bonds, loans, and mortgages, for transfer resources from lenders to borrowers.2. Equity Market : the market is for stocks.3. Derivative Market : the market for trade in instruments which designed to transfer risk.

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