Question

1. Which of the following is a reason Congress established insurance funds for banks?
a. to prevent all future bank failures
b. to encourage depositors to withdraw their money from banks
c. to prevent banks and depositors from suing Congress for losses
d. to save the banks from losses when depositors withdraw their money

2. In an attempt to raise long-term funds, a company decides to issue bonds to lenders. These bonds do not have fixed interest payments, and the rate of interest changes depending on economic conditions. The bonds issued by this company are examples of ___ bonds.
a. floating-rate
b. junk
c. secured
d. serial
e. debenture

3. Danielle is an investor who wants to sell her stocks and bonds to other investors. Which of the following provides a mechanism for her to buy and sell stocks and bonds?
a. prediction markets
b. securities markets
c. primary markets
d. futures markets
e. foreign-exchange markets

Answer 1

1. a. to prevent all future bank failures

This is the primary objective of introducing insurance for banks and the people depositing money in a bank should also feel safe and secure as well.

2. a. Floating rate

Such bonds generally do not possess a fixed interest rate instead the rate varies based on time and various other factors as well.

3. b. Securities markets