Financial Markets,Institutions and Interest Rates
Respond to five questions about financial markets, financial institutions, and interest rates.
Overview
Respond to five questions about financial markets, financial institutions, and interest rates.
It is necessary to be able to apply the knowledge you have gained by classifying market transactions and
financial instruments and by describing how financial markets work.
By successfully completing this assessment, you will demonstrate your proficiency in the following course
competencies and assessment criteria:
Competency 1: Evaluate the global financial environment.
- Define factors that determine the nominal interest rate on a financial security.
- Categorize financial transactions as taking place in the primary or secondary market.
- Identify financial instruments as money market securities or capital market securities.
Competency 2: Define finance terminology and its application within the business environment.
- Define the concept of terms structure of interest rates.
- Describe services offered by each type of financial institution.
Competency Map
Use this online tool to track your performance and
progress through your course.
Resources
Suggested Resources Suggested Resources
The following optional resources are provided to support you in completing the assessment or to provide a
helpful context. For additional resources, refer to the Research Resources and Supplemental Resources in the left navigation menu of your courseroom.
Library Resources
The following e-books or articles from the Capella University Library are linked directly in this course:
Details Attempt 1 Available Attempt 2 Attempt 3
Tutorials Support Log Out Shifali Kapoor
Assessment 2 – BUS-FP3062 – Winter 2019 – Section 02 3/3/19, 7(54 PM
https://courserooma.capella.edu/webapps/blackboard/content/listContent.jsp?course_id=_166600_1&content_id=_7345959_1&mode=reset Page 2 of 3
Weaver, S. C., & Weston, J. F. (2001). Finance and accounting for nonfinancial managers. New York, NY: McGraw-Hill.
Sherman, E. H. (2011). Finance and accounting for nonfinancial managers (3rd ed.). New York, NY:
American Management Association.
Course Library Guide
A Capella University library guide has been created specifically for your use in this course. You are encouraged to refer to the resources in the BUS-FP3062 – Fundamentals of Finance Library Guide to help direct your research.
Bookstore Resources
The resources listed below are relevant to the topics and assessments in this course and are not required. Unless noted otherwise, these materials are available for purchase from the Capella University Bookstore. When searching the bookstore, be sure to look for the Course ID with the specific ñFP (FlexPath) course designation. Cornett, M., Adair, T., & Nofsinger, J. (2016). M: Finance (3rd ed.). New York, NY: McGraw-Hill.
Assessment Instructions
Respond to the following five questions. Write your responses in a Word document, and number them 1-5.
1. Categorize each of the following transactions as taking place in either the primary or secondary
market:
Supercorp issues $180 million of new common stock.
HiTech, Inc. issues $30 million of common stock in an IPO.
Megaorg sells $10 million of HiTech preferred stock from its marketable securities portfolio.
The XYA Fund buys $220 million of previously issued Supercorp bonds.
A. B. Corporation sells $15 million of XYZ common stock.
2. Identify whether the following financial instruments are capital market securities or money market
securities:
U.S. Treasury bills.
U.S. Treasury notes.
U.S. Treasury bonds.
Mortgages.
Federal funds.
Negotiable certificates of deposit.
Common stock.
State and government bonds.
Assessment 2 ñ BUS-FP3062 – Winter 2019 – Section 02 3/3/19, 7(54 PM
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Corporate bonds.
3. Identify the different types of financial institutions. What are the main services each of these financial
institutions offers?
4. Define the six factors that determine the nominal interest rate on a security.
5. Define the concept of term structure of interest rates. What are three theories that explain the future
yield curve of interest rates?
Use references to support your answers as needed. Be sure to cite all references using correct APA style.
Your responses should be free of grammar and spelling errors, demonstrating strong written communication
skills.
How to use the scoring guide
Financial Markets and Institutions Scoring Guide
Use the scoring guide to enhance your learning.
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