Econ 2035 -Exam 1 (LSU, Rakitan)
Questions and All Correct Answers.
What are the financial key components? - Answer Financial assets, financial institutions, and
financial regulators.
What do financial intermediaries include? - Answer Financial banks, investment banks,
hedge funds, mutual funds, and insurance companies.
Examples of financial regulators? - Answer Federal Reserve and other central banks.
What is the goal of the financial system? - Answer Consumption now vs consumption later
What are the four attributes of money? - Answer 1. Unit of account
2. Store of value
3. Medium of exchange
4. Standard of deferred payment
What is standard of deferred payment? - Answer pv=fv/(1+r)^t
What are the attributes of a currency? - Answer Acceptance, durable, valuable "relative to its
weight," fungible, standardized.
What are stocks? - Answer Financial securities that represent partial ownership of a
corporation; also called equities. Stocks are basically ownership in a corporation.
What is foreign exchange? - Answer Refers to units of foreign currency.
Banks have begun to sell loans on financial markets through a process called _______. - Answer
securitization
What is securitization? - Answer The process of converting loans and other financial assets
that are not tradable into tradable securities.
Securitized loans are loans that have been bundled with other loans and resold to investors;
they are both financial ________ and financial _______. - Answer assets; securities
Questions and All Correct Answers.
What are the financial key components? - Answer Financial assets, financial institutions, and
financial regulators.
What do financial intermediaries include? - Answer Financial banks, investment banks,
hedge funds, mutual funds, and insurance companies.
Examples of financial regulators? - Answer Federal Reserve and other central banks.
What is the goal of the financial system? - Answer Consumption now vs consumption later
What are the four attributes of money? - Answer 1. Unit of account
2. Store of value
3. Medium of exchange
4. Standard of deferred payment
What is standard of deferred payment? - Answer pv=fv/(1+r)^t
What are the attributes of a currency? - Answer Acceptance, durable, valuable "relative to its
weight," fungible, standardized.
What are stocks? - Answer Financial securities that represent partial ownership of a
corporation; also called equities. Stocks are basically ownership in a corporation.
What is foreign exchange? - Answer Refers to units of foreign currency.
Banks have begun to sell loans on financial markets through a process called _______. - Answer
securitization
What is securitization? - Answer The process of converting loans and other financial assets
that are not tradable into tradable securities.
Securitized loans are loans that have been bundled with other loans and resold to investors;
they are both financial ________ and financial _______. - Answer assets; securities
