fin4

Which answer best describes the term money market:

A market for trading short-term debt instruments, such as treasury bills, commercial paper, bankers' acceptances, and certificates of deposit.

What happens when an overdraft occurs and the positive balance exceeds the agreed terms?

Additional fees may be charged

Which answer best describes the term financial institution?

An institution that provides financial services for its clients or members.

A security or guarantee (usually an asset) pledged for the repayment of a loan if one cannot procure enough funds to repay is known in finance as:

Collateral

A financial transaction whereby a business sells its accounts receivable to a third party at a discount is know in finance as:

None of these answers.

All of the following are advantages of commercial paper, EXCEPT:

High credit limit

When a lender provides a short-term unsecured loan to be repaid at the borrower's next pay day, it is called:

Payday loan

Which is NOT an example of an asset?

Personal debt

What is the difference between secured and unsecured loans?

Secured loans are backed by a form of collateral.

Which of the following is NOT an advantage of person to person lending?

Simple compliance to legal regulations

Which answer best describes the term asset?

Something of economic value.

Which answer best describes the term London Interbank Offered Rate?

The average interest rate estimated by leading financial institutions in London that they would be charged if borrowing from others.

What happens if the borrower defaults on paying back a secured loan, and the sale of the collateral is not enough to pay back the remainder of the loan?

The creditor obtains a defficiency judgement

The greatest value of credit cards to merchants is:

The issuing bank commits to payment

Money invested in an innovative enterprise in which both the potential for profit and the risk of loss are considerable is known in finance as:

Venture capital