Channel funds from savers to borrowers who need long-term financing for productive investments. | Card: 2 / 102 |
False. Secondary markets provide liquidity but do not raise new capital for issuers. | Card: 4 / 102 |
Which market function determines fair value through buyer-seller interaction? | Card: 7 / 102 |
Investors gain confidence and companies benefit from lower required returns on securities. | Card: 10 / 102 |
Enable business expansion, job creation, infrastructure development, and innovation funding throughout economy. | Card: 12 / 102 |
True or False: Diversification can eliminate all investment risks including systematic risk. | Card: 13 / 102 |
False. Diversification reduces unsystematic risk but cannot eliminate systematic market-wide risk. | Card: 14 / 102 |
Primary markets raise new capital for issuers; secondary markets provide trading liquidity. | Card: 16 / 102 |
Fill in the blank: The _____ effect occurs when rising equity prices increase household wealth. | Card: 17 / 102 |
Which participants provide continuous bid and ask quotes in markets? | Card: 19 / 102 |
Liquid markets attract more investors and reduce the company's cost of capital. | Card: 22 / 102 |
Provide transparency, shareholder voting rights, regulatory oversight, and market discipline for management. | Card: 24 / 102 |
True or False: Investment banks always guarantee to sell entire securities offerings. | Card: 25 / 102 |
Riddle: I aggregate information from millions of participants to establish fair value. What am I? | Card: 27 / 102 |
Fill in the blank: _____ underwriting means investment banks purchase securities and bear market risk. | Card: 29 / 102 |
Enable risk transfer, hedging strategies, price discovery, and leverage for market participants. | Card: 32 / 102 |
What distinguishes institutional investors from retail investors in capital markets? | Card: 33 / 102 |
Institutional investors manage large sums professionally for others; retail investors invest personally. | Card: 34 / 102 |
Which function helps governments finance infrastructure without immediate tax increases? | Card: 35 / 102 |
Brokers act as agents earning commissions; dealers trade from inventory earning spreads. | Card: 40 / 102 |
Fill in the blank: _____ markets enable international risk diversification across different economies. | Card: 41 / 102 |
How do capital markets transmit monetary policy effects throughout the economy? | Card: 43 / 102 |
Interest rate changes flow through bond yields affecting corporate borrowing costs and investment. | Card: 44 / 102 |
What happens when capital markets lack sufficient liquidity for large transactions? | Card: 45 / 102 |
Price volatility increases and transaction costs rise significantly for market participants. | Card: 46 / 102 |
Which self-regulatory organization oversees broker-dealers and their representatives? | Card: 47 / 102 |
True or False: Stock market performance always reflects current economic conditions accurately. | Card: 49 / 102 |
False. Markets are forward-looking and may rise during recessions expecting future improvement. | Card: 50 / 102 |
![]() Unlock all Flashcards with EduRev Infinity Plan Starting from @ ₹99 only |
Funds flow to entities offering best risk-adjusted returns based on investor assessment. | Card: 52 / 102 |
Fill in the blank: _____ provide protection if member broker-dealers fail financially. | Card: 53 / 102 |
Become buyer to every seller and seller to every buyer, guaranteeing trade completion. | Card: 56 / 102 |
Safeguard securities, handle settlements, collect dividends, and maintain ownership records for investors. | Card: 58 / 102 |
Which market participant maintains continuous inventory to facilitate trading? | Card: 59 / 102 |
True or False: Higher stock prices always benefit new investors entering the market. | Card: 61 / 102 |
False. Higher prices make shares more expensive for new investors to purchase. | Card: 62 / 102 |
Exchanges are centralized with listing requirements; OTC markets are decentralized dealer networks. | Card: 64 / 102 |
Fill in the blank: The _____ function of capital markets reflects investor expectations about future conditions. | Card: 65 / 102 |
Provide long-term investment vehicles that historically outpace inflation and build wealth. | Card: 68 / 102 |
What occurs when central banks conduct quantitative easing through capital markets? | Card: 69 / 102 |
Asset purchases inject liquidity, lower long-term rates, and encourage portfolio rebalancing. | Card: 70 / 102 |
Which type of underwriting provides issuers with guaranteed capital proceeds? | Card: 71 / 102 |
True or False: Alternative Trading Systems must register as traditional stock exchanges. | Card: 73 / 102 |
False. ATS register as broker-dealers and comply with Regulation ATS requirements. | Card: 74 / 102 |
Investing member contributions in capital markets to generate long-term returns above inflation. | Card: 76 / 102 |
Fill in the blank: _____ bonds are specifically issued to fund environmental projects. | Card: 77 / 102 |
Create new financial instruments, trading technologies, and investment vehicles meeting changing needs. | Card: 80 / 102 |
Technology advances, regulatory changes, and participant demands for efficiency and lower costs. | Card: 82 / 102 |
Which function helps insurance companies meet future claim obligations? | Card: 83 / 102 |
True or False: Sectoral performance in capital markets signals changing economic conditions. | Card: 85 / 102 |
True. Relative sector strength indicates industry-specific and broader economic health trends. | Card: 86 / 102 |
Clearing corporation becomes counterparty to both sides, eliminating direct counterparty risk. | Card: 88 / 102 |
Fill in the blank: _____ trading allows investors to purchase portions of expensive stocks. | Card: 89 / 102 |
Bond yield spreads between corporate and government securities indicate perceived credit risk. | Card: 92 / 102 |
What regulatory principle requires investment advisers to prioritize client interests? | Card: 93 / 102 |
Fiduciary duty requiring advisers to act in client's best interest and disclose conflicts. | Card: 94 / 102 |
Which innovation democratizes market access for smaller investors? | Card: 95 / 102 |
True or False: Money market instruments typically have maturities exceeding one year. | Card: 97 / 102 |
False. Money market instruments have maturities of one year or less for liquidity. | Card: 98 / 102 |
What enables real-time price adjustments as new information becomes available? | Card: 99 / 102 |
Continuous trading mechanisms that incorporate market participant knowledge and expectations into pricing. | Card: 100 / 102 |
Fill in the blank: _____ funds employ sophisticated strategies including leverage and short selling. | Card: 101 / 102 |






