Financial Institutions and Markets - FIN 137

Fill in the blank flashcards based on notes from the Financial Institutions and Markets course.

A market in which financial assets are traded is called a __.

Financial Market

The two types of markets are and .

Primary market and Secondary market

_ securities are used to meet short-term liquidity needs, typically maturing in 1 year or less.

Money market

_ market securities meet long-term liquidity needs and involve a commitment of funds for more than a year.

Capital market

Financial institutions serve as __ in the transfer of funds between surplus and deficit units.

intermediaries

In financial markets, __ securities include bonds, stocks, mortgages, and mortgage-backed securities.

Capital market

Liquidity is crucial for a healthy secondary market as it determines how easily securities can be __ without a loss of value.

liquidated

Illiquid markets can lead to and of securities.

higher transaction costs and loss of value

A __ is a financial contract whose value is derived from the value of underlying assets.

Derivative security

Financial markets facilitate the flow of __ among market participants.

funds