Cima C04 Exam Question No 58

Question No 58:

All of the following statements about the monetary system are true EXCEPT which ONE?

A. Financial intermediation links net savers and net debtors.
B. In developed economies cash and notes form only a very small part of the money supply.
C. The capital market deals in long term financial assets.
D. The more liquid a financial asset is, the higher is the expected rate of return.

Answer: D

Cima C04 Exam Question No 57

Question No 57:

Which ONE of the following does NOT normally form part of the equity capital market?

A. Central bank.
B. Pension funds.
C. Retail banks.
D. Venture capitalists.

Answer: D

Cima C04 Exam Question No 56

Question No 56:

The main function of the money market is to:

A. Enable businesses and government to obtain liquidity.
B. Encourage saving.
C. Permit the efficient buying and selling of shares.
D. Deal in credit instruments of more than one year maturity.

Answer: A

Cima C04 Exam Question No 55

Question No 55:

Which ONE of the following would tend to increase the degree of monopoly power of a company?

A. The ending of one of its patents.
B. An increase in excess profits.
C. A fall in the cross price elasticity of demand for its product.
D. Diversification into a wider range of products.

Answer: C