IB final quiz 4

an equity loan is made when

a corporation sells stocks to investors

a ______ is a situation in which a country cannot service its foreign debt obligations

currency crisis

as investors increase the number of stocks in their portfolio, the portfolios risk...

declines rapidly in the beginning

the international monetary system refers to the institutional arrangements that govern

exchange rates

the globalization of capital has universally been seen as a positive development

false

market makers are

financial service companies that connect investors and borrowers

the asian economic crisis and the global financial crisis of 2008-2009 were caused by

high inflation rates

the _______ refers to the institutional arrangements that govern exchange rates

international monetary fund

the systematic risk of the stock market is....

level of non diversifiable risk in an economy

international monetary fund members were ______ in the Jamaica agreement

permitted to sell their own gold reserves at the market price

which of the following is a factor that initiated the collapse of the fixed exchange rate system

recession in third world countries

the monetary autonomy argument holds that

should be allowed to choose its own inflation rate

moral hazard arises when people behave recklessly because

they know they will be saved if things go wrong

by using the global capital market, investors have a much wider range or investment opportunities than in a domestic market

true

debt loans include cash from banks and funds raised from the sale of corporate bond to investors

true

depositors are not protected against bank failure in the eurocurrency market

true

governments allow convertibility to preserve foreign exchange reserves

true

the relatively low correlation between the movements of stock markets in different countries indicates that countries face different economic conditions

true

there are many impediments to the flows of goods and services in an efficient market

true