Name: not my name Id No.

: again it is your id
Center: A.A (just to remind you)
Assignment: guess
1. What do you mean equilibrium?
Equilibrium is when current output supplied equal to aggregated demand
That means Y= C + I + G, so Y – C – G = I (Y is the current output of goods
and services, C is national consumption, I is national investment and G
represent government purchase)
2. What are the three individual markets for goods and services?
 Goods market
 Money market
 Non money asset market
3. What is the function of financial system and the financial markets?
 The main function of financial system to channel funds between end users of
the system: from lenders (surplus unit) to borrowers (deficit unit) and also it
provides payments facilities, a Varity of services like insurance, pensions and
foreign exchange and other.
 The function of financial market is a) to provide a mechanism for
determining the price of the financial assets, b) they make asset more liquid
and c) the reduce the costs of exchange assets.
4. Write the two types of financial analyses debt securities?
 Negotiable (marketable) and
 Non negotiable
5. Write the characteristics of secondary securities?
 Have low default risk
 Can be usually purchased in small denominations
6. Write the purpose of financial intermediary?
 Intermediaries transform of assets
 Reduce transactional costs
 Reduce the problem arising out of asymmetric information
7. Write the two principal policies of insurance/ investment?
 Universal life policy and
 Variable life policy
8. Property and casually insurance companies provide a broad range of the
insurance protection against?
 Loss, damage, or destruction of property
 Loss or impairment of income producing ability
 Claims form damage by third parties because of alleged negligence
 Loss resulting from injuries or death due to occupational accidents
9. Write the two major classes of pension plan?
i. Defined contribution and
ii. Defined benefit plans
10. What are the types of investment companies?
 Open-end funds
 Closed-end funds and
 Unit trusts investment company
11. What are the sources of fund for bank?
 Deposits
 Non-deposit borrowings and
 Common stock and retained earning
12. The leverage ration as a measure of capital adequacy has three problems what
are those?
i. Market value: there is no assurance that the depositors and regulators are
adequately protected against losses due to market values
ii. Asset risk
iii. Off-balance sheet activities
13. What are the major national stock exchanges?
 The New York stock exchange (NYSE) and
 The American stock exchange (ASE or AMEX)
14. Describe the process of financial intermediaries and explain how intermediaries
are able to manage this process?
 A financial intermediary is ably to hold the long term, high risk; claims by
borrowers and finance this by issuing deposit claims with the characteristics
of low risk and short term.
15. Briefly describe the characteristics of secondary securities?
 Secondary securities are which security are traded in secondary markets compared
with primary securities, secondary securities.
- Have low default risk
- Can be usually purchased in small denominations