Mark your choice with an X or to indicate if the question/statement is True or False.

1. Debt markets are also referred to as the bond markets in which individuals, corporations and governments borrow to finance their activities.(True or False)

2. Over the Counter (OTC markets) are organized exchanges where buyers and sellers meet in one central location to trade. Good examples are New York Stock

Exchange, London Stock Exchange, BIST etc..(True or False)

3. Federal Reserve System in the U.S. is only a regulatory institution and does not have any role of managing economic, monetary policy and interest rate policy.(True or False)

4. Standard & Poor and Moodys are two leading Investment Banks in the U.S.(True or False)

5. Fannie Mae and Freddy Mac are two important Investment Banking Organizations in USA.(True or False)

6. The equity holder has a bankruptcy disadvantage and a bondholder on the other hand has a tax disadvantage.(True or False)

7. Money market transactions involve the exchange of financial instruments that are short term in nature, that mature generally in one year.(True or False)

8. Brokers are financial intermediairies in securities markets, who carry their own portfolios, buy and sell securities from their own inventories and thus make

investments for themselves and on behalf of their customers.(True or False)

9. One of the most important reasons for regulating the financial institutions and the markets is to ensure the soundness of the financial system by minimizing the risks for

the investors.(True or False)

10. Forward markets, require standardized derivative contracts with high transaction costs, they are more formal and involve detailed operational requirements than

future markets.(True or False)

11. Everything else being fixed decreasing or lower interest rates generally slow down the economy.(True or False)

12. Mortgage loans are always secured by the pledge of real property so that if the borrower defaults on the loan, the lender can foreclose and take the ownnership of

the property.(True or False)

13. A purchase of futures contract means having long position.(True or False)

14. Net Present Value (NPV) is the ratio of an investment market value to the cost of that investment.(True or False)

15. Bond ratings which are conducted by the rating agencies such as Security Exchange Commission and Central Banks. These ratings are utilized to control stock markets,

foreign exchange markerts, mortgage markets and derivatives markets.(True or False)