Answer:
1a. Backed by the U.S. government, these financial instruments are short-term debt obligations with a maturity of less than one year. They are considered risk-free investments.
Identification: U.S. Treasury Bills (T-bills)
b. Issued by money-centered financial firms, these short- or medium-term insured debt instruments pay higher interest than a regular savings account. They are low-risk instruments and have low returns.
Identification: Certificate of deposit
c. These financial instruments are investment pools that buy such short-term debt instruments as Treasury bills (T-bills), certificates of deposit (CDs), and commercial paper. They can be easily liquidated.
Identification: Money Market Mutual Fund
d. These financial instruments are contractual agreements that give one party a long-term agreement to use an asset by providing regular payments.
Identification: Lease Agreement
2. The instruments which are traded in capital markets are Common Stock, Preferred Stock, Corporate Bonds and Certificates of deposits excluding Long-term bank loans.
3. The process in which derivatives are used to reduce risk exposure is called <u>hedging</u>.
The answer that fits the given blank above is the term CROWDSOURCING. When we say crowdsourcing, this is the process or the ability to obtain or gather information that would be later used for a certain project or task. This involves a large number of people and typically asking their preferences and opinions.
Answer: Option (B) is correct.
Explanation:
Correct Option: Shows what portion of total money income is accounted for by different proportions of the nation's households.
Lorenz curve is a graphical representation of income inequality and wealth inequality in an economy. In a graphical representation, there is a straight line and if Lorenz curve is same as the straight line then there is an income equality. The gap between straight line and curved line shows us the income inequality among the households. The larger the gap between these two curves the greater will be the income inequality in an economy.
