1.
AE18-FINANCIAL
MARKETS
AE18-QZ-001

2.
ANSWER THE FOLLOWING QUESTIONS: COPY-
PASTE ANSWERS WILL BE SCORED ZERO
1. Surplus and Deficit Units (10 points)
Explain the meaning of surplus units and deficit
units. Provide an example of each.

3.
ANSWER THE FOLLOWING QUESTIONS: COPY-
PASTE ANSWERS WILL BE SCORED ZERO
2. Types of Markets (20 points)
Distinguish between primary and secondary
markets. Distinguish between money and capital
markets

4.
ANSWER THE FOLLOWING QUESTIONS: COPY-
PASTE ANSWERS WILL BE SCORED ZERO
3. Imperfect Markets (10 points)
Distinguish between perfect and imperfect
security markets. Explain why the existence of
imperfect markets creates a need for financial
intermediaries.

5.
ANSWER THE FOLLOWING QUESTIONS: COPY-
PASTE ANSWERS WILL BE SCORED ZERO
4. Efficient Markets (10 points)
Explain the meaning of efficient markets.Why
might we expect markets to be efficient most of
the time?

6.
ANSWER THE FOLLOWING QUESTIONS: COPY-
PASTE ANSWERS WILL BE SCORED ZERO
5. Role of Accounting in Financial Markets (25
points)
Integrate the roles of accounting, regulation, and
financial market participation.That is, explain how
financial market participants rely on accounting and
why regulatory oversight of the accounting process is
necessary.