Week 1: Overview of Financial System(Accurately solved)

An over-the-counter agreement that locks in a price, generally interest rate or exchange rate, that will apply at a specified future date. correct answers Forward The ownership stake in the corporation that is given to shareholders of the corporation. correct answers Equity The markets in which securities are issued for the first time and the issuers receive the funds. correct answers Primary markets An instrument that derives its value from an underlying security or physical market commodity correct answers Derivative The assessment of the creditworthiness of a debt security given by a credit rating company correct answers Credit Rating As a result of this transformation ability, a bank can offer its customers deposits as well as loans and other investment products. correct answers Asset transformation The type of finance whereby funds are transferred from the provider of funds straight to the user of funds correct answers Direct finance An agreement to buy or sell a specified commodity or financial instrument, usually interest rates or foreign exchange that is offered by banks generally in an informal market correct answers Forward Discount securities sold into the money markets by good credit-worthy companies correct answers Commercial Paper Short-term securities sold into the money markets with a face value payable at maturity. correct answers discount securities The main form of equity issued by corporations, that gives the holder specified rights correct answers ordinary share The type of finance conducted with a financial intermediary (e.g. bank deposits) involving separate contractual agreements. correct answers In intermediated finance a new financial asset is created The correct answer is: intermediated finance The markets that trade securities such as shares and long-term bonds correct answers Capital markets