Which Of The Following Is The Largest Borrower In The Money Markets?

Financial Markets and Institutions, 8e (Mishkin)

Chapter 11 The Money Markets

1) Action in money markets increased significantly in the late 1970s and early on 1980s considering of

rising brusk-term interest rates.

regulations that express what banks could pay for deposits.

2) Money market securities take all the following characteristics except they are non

money.

3) Money market instruments

A) are usually sold in large denominations.

B) have low default run a risk.

C) mature in ane twelvemonth or less.

are characterized past all of the above.

4) The banking industry

should accept an efficiency advantage in gathering information that would eliminate the need

for the money markets.

exists primarily to mediate the disproportionate information problem between saver-lenders and

borrower-southwardpenders.

is discipline to more than regulations and governmental costs than the money marketsouthward.

v) In situations where asymmetric information problems are not astringent,

the money markets have a singled-out cost advantage over banks in providing brusque-term funds.

vi) Brokerage firms that offered money market place security accounts in the 1970s had a cost reward

over banks in attracting funds because the brokerage firms

were non subject to deposit reserve requirements.

were non subject to the deposit interest rate ceilings.

7) Which of the post-obit statements about the coin markets are truthful?

Not all commercial banks deal for their customers in the secondary market.

Coin markets are used extensively by businesses both to warehouse surplus funds and to

heighten short-term funds.

8) Which of the post-obit statements about the coin markets are true?

Virtually money market securities do not pay involvement. Instead, the investor pays less for the

security than it will be worth when information technology matures.

Alimony funds invest a portion of their assets in the money marketplace to have sufficient liquidity

to run across their obligations.

Unlike most participants in the money market, the U.Due south. Treasury Department is e'er a

demander of money market funds and never a supplier.

9) Which of the following are true statements about participants in the coin markets?

Large banks participate in the money markets by selling large negotiable CDs.

The U.S. regime and corporations infringe in the coin markets considering cash inflows

and outflows are rarely synchronized.

The Federal Reserve is the single most influential participant in the U.S. money market place.

10) The about influential participant(s) in the U.South. money market

is the Federal Reserve.

onei) The Fed is an active participant in coin markets mainly because of its responsibility to

control the coin supply.

12) Commercial banks are large holders of ________ and are the major issuer of ________.

U.S. regime securities; negotiable certificates of deposit

13) The primary part of large diversified brokerage firms in the money marketplace is to

make a market for money marketplace securities by maintaining an inventory from which to buy or

sell.

14) Finance companies raise funds in the money market by selling

commercial newspaper.

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