Title: Quiz: Financial Markets And Institutions Quiz
Course: Business_Finance_ > Section: Module7

Q: What are the two main categories of financial markets mentioned in the module?
- Capital markets and real estate markets
- Capital markets and money markets
- Money markets and foreign exchange markets
- Commodity markets and capital markets
A: Capital markets and money markets

Q: Who oversees the regulatory framework governing financial markets in the United States?
- The Federal Reserve
- The Securities and Exchange Commission (SEC)
- The Department of Treasury
- The International Monetary Fund (IMF)
A: The Securities and Exchange Commission (SEC)

Q: How do financial institutions contribute to economic stability?
- By investing in foreign markets
- By acting as intermediaries between savers and borrowers
- By increasing taxes on businesses
- By limiting access to financial services
A: By acting as intermediaries between savers and borrowers

Q: Why is understanding the distinction between capital markets and money markets crucial for investors?
- It helps them choose between stocks and bonds
- It influences their investment strategies and risk management approaches
- It determines their eligibility for loans
- It affects their tax obligations
A: It influences their investment strategies and risk management approaches

Q: What role do economic indicators like interest rates and inflation play in financial markets?
- They have no impact on market performance
- They influence investment decisions and market sentiment
- They only affect government policies
- They are irrelevant to individual investors
A: They influence investment decisions and market sentiment

Q: Which of the following instruments is typically associated with money markets?
- Stocks
- Bonds
- Treasury bills
- Real estate
A: Treasury bills

Q: How can the interconnectedness of global financial systems affect local markets?
- It has no effect on local markets
- Events in one market can create ripple effects across others
- Local markets are always insulated from global events
- Only large corporations are affected by global financial systems
A: Events in one market can create ripple effects across others

Q: What is a primary function of banks in the financial system?
- To limit the flow of funds
- To accept deposits and extend loans
- To invest solely in foreign assets
- To create new currencies
A: To accept deposits and extend loans

Q: How might rising interest rates impact stock prices according to the module?
- They have no effect on stock prices
- They may lead to decreased borrowing and spending, negatively impacting stock prices
- They always increase stock prices
- They only affect government bonds
A: They may lead to decreased borrowing and spending, negatively impacting stock prices

Q: What is one of the challenges posed by the rise of fintech innovations in financial markets?
- Decreased competition
- Increased regulatory compliance concerns
- Reduced access to financial services
- Elimination of traditional banking
A: Increased regulatory compliance concerns