| A financial system’s primary concern is funneling money from | lender-savers to borrower-spenders |
| Is a process by which investment bankers purchase new securities directly from the issuing company and resell them to the investors | underwriting |
| The ease with which a security can be sold and converted into cash | marketability |
| The following theory states that security prices reflect all public information, but not all private information | semistrong-form efficiency |
| The process of converting financial securities with one set of characteristics into securities with another set of characteristics | financial intermediation |
| If you are a borrower, which would you prefer to occur during the life of your loan? | a level of inflation that is higher than that anticipated at the outset of the loan |
| If the supply of loanable funds decreases relative to the demand for those funds, then we would expect…? | interest rates to increase |
| The term money market is used because…? | the instruments traded in this market are close substitutes for cash |
| The nominal rate of interest is made up of…? | both the real rate of interest and compensation for inflation |
