CHAPTER 24
Understanding the Financial System Quiz
Test your knowledge on the financial system and its crucial role in the economy. This quiz covers a range of topics, from financial markets to regulatory bodies, ensuring you grasp the essentials.
- 10 questions to challenge your understanding
- Multiple choice format for ease of answering
- Learn while you assess your knowledge
The financial system plays a key role in the economy:
By stimulating economic growth.
By influencing economic performance of the actors and affecting economic welfare.
By enabling entities with funds allocate them to those who have potentially more productive ways to invest said tunds.
All of the above.
Financial markets provide the following three major economic functions:
Price discovery, liquidity and reduction of transaction costs.
Price discovery, liquidity and reduction of inflation rates.
Price discovery, liquidity and increase of transaction costs.
None of the above.
In any transaction related to a financial instrument:
The issuer is the party that owns the financial instrument, and therefore the right to receive the payments.
The issuer is the party that has agreed to make future cash payments.
The issuer is the entity who needs funds.
Answers b) and c) are correct.
Financial market regulation:
Is only based on European Directives.
Is aimed at ensuring the fair treatment of participants and the disclosure of accurate information for investment decision-making.
Answers a) and b) are correct.
Sets the country's monetary and exchange rate policy.
Financial credit establishments are not allowed to:
Grant loans, credits and facilitics, including consumer credit, mortgages and commercial transaction financing.
Issue and manage credit cards.
Receive repayable funds from the public in the form of deposits, loans and temporary assignments of financial assets or other comparable instruments.
Grant bonds.
The purpose of the CNMV is:
To ensure the transparency of the Spanish Securities market and the correct formation of prices in them, as well as protecting investors.
Promoting the proper working of payment systems in the euro area.
Issuing legal tender banknotes.
All of the above.
MARF is defined as:
An initiative aimed at channelling financial resources to a large number of solvent companies that can obtain financing using this market on the issuance of fixed-income securities.
A market for small to medium sized companies looking to expand, with a special set of regulations designed specifically for them, including costs and processes tailored to their particular characteristics.
Anelectronic trading platform for Spanish public debt, reverse repos and specific securities registered on AIAF.
The only international market for Latin American securities.
The contract for opening credit is defined as:
The bank charge made for payment of a note prior to maturity, expressed as a percentage of the note's face value.
A contract by which the creditor, in exchange for the receipt of a commission, undertakes to grant credit for the customer, according to the agreed limits of term and amount, by making deliveries of hard cash or by performing provisions that enable him to get hard Cash.
Money placed into a banking institution for safekeeping.
A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount.
Which of the following are amongst the different reasons that are allegegwhen deciding to go public:
To obtain funding by raising capital from the public.
To allow the existing shareholders to divest or cash in their investments.
To disseminate ownership of shares so as to give liquidity to Shareholders and place the company on the stock exchange.
All of the above.
Which of the following events is related to the mandatory takeover bid.
Attainment of 30% or more of the voting rights, in the context of an acquisition of shares and/or voting rights.
Having attained, directly or indirectly, a percentage of voting rights lower than 30%, provided that he/she appoints, within two years after the date of the above acquisition, a number of directors who, when added as the case may be to those already appointed, represent more than half of the members of the board of directors.
Answers a) and b) are correct.
Attainment of 50% of voting rights through a concerted action with third parties, without an acquisition.
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