1. True or False: Financial markets are markets where financial assets, such as stocks, bonds, foreign exchange, commodities and their derivatives, are traded.

2. True or False: Financial institutions can be divided into depository and non-depository institutions.

3. True or False: Depository institutions include insurance companies, pension funds, securities companies and finance companies.

4. True or False: To protect the financial system, the government creates deposit insurance.

5. True or False: Governments regularly inspect the financial health of banks through the means of examination and disclosures, while internal controls and risk management processes help to monitor any mounting risk.

6. True or False: The Consumer Financial Protection Bureau (CFPB) is responsible for consumer protection in the financial sector which includes: banks, credit unions, securities firms, payday lenders, mortgage-servicing operations, and other financial companies operating in the United States.

7. True or False: The role of government regulation is to limit the risky behavior adopted by the financial system.

8. True or False: Transactions in the financial markets can only occur via an exchange.

9. True or False: Stress testing and VaR calculations are adopted to calculate possible losses under adverse scenarios.

10. True or False. In the United States, the government is the regulator of banks and holding companies.

11. Fill in the blank: _______________ include equity markets and debt markets where equity and debt instruments and their derivatives are traded.

12. Fill in the blank: Transactions in financial markets can occur via an exchange or directly between two counterparties, which is called _______________.

13. (Choose all that apply) Financial markets consist of:

14. Which of the following are depository institutions? (Choose all that apply)

15. Which of the following are non-depository institutions? (Choose all that apply)

16. Which of the following statements are correct? (Choose all that apply)

17. Fill in the blank: Stress testing and _______________ calculations are also adopted to calculate worst possible losses under adverse scenarios.

18. Fill in the blank: In the U.S., the _______________ is the regulator for banks and bank holding companies.

19. Which of the following statements are true? (Choose all that apply)

20. Fill in the blank: As a lender of last resort a(n) _______________ is ready to lend to an illiquid bank when no one else will, provided the bank has collateral in the form of high-quality assets.

21. Fill in the blank: _______________ regularly inspect the financial health of banks through the means of examination and disclosures, while internal controls and risk management processes help to monitor any mounting risk.

22. Who is the regulator of the insurance sector in the United States?

23. Fill in the blank: The _______________ provides deposit insurance guaranteeing the safety of a depositor’s accounts in each insured bank.

24. Fill in the blank: The _______________ regulates the futures and option markets.

25. Which of the following sentences are true? (Choose all that apply)

26. Derivative instruments include which of the following? (Choose all that apply)

27. Fill in the blank: _______________ are transactions between investors where they exchange the risk and the payments.

28. Fill in the blank: Central Banks ensure the solvency and liquidity of financial institutions through _______________, which requires financial institutions to maintain a positive capital position equal to at least a certain portion of their assets.

29. Fill in the blank: The _______________ is responsible for enforcing the federal securities laws, proposing securities rules, and regulating the securities industry, the stock exchange, and the electronic securities markets in the U.S.

30. Fill in the blank: _______________ is when one party might take excessive risk, but doesn’t have to bear the consequences.

31. Duration analysis is limited as it fails to consider which of the following? (Choose all that apply)

32. How can change in bond price be calculated using modified duration?

33. Macaulay duration is measured in:

34. If the YTM of a bond is equal to its coupon rate, the bond is selling at:

35. Bond price = $100, Annual Interest = $6. Current Yield is:

36. Which of the following statements are true? (Choose all that apply)

37. Which of the following statements are true? (Choose all that apply)

38. Fill in the blank: _______________, which evaluate the ability of a bond-issuer to repay its debt by issuing ratings, are also an essential part of the debt markets.

39. Bonds can be issued by which of the following? (Choose all that apply)

40. Which of the following statements are true? (Choose all that apply)