CONFIDENTIAL 5 BA/FEB2022/FIN435 SECTION B (TRUE/FALSE) 1. Financial markets include the capital markets which mainly deal in short-term (True/False) 2. Interest rates on banker's acceptances are low because the risk of default is very low. (True/False) Liquidity risk is the risk where the borrowers not being able to repay the loan leading to banks suffer the losses. 3. (True/False) Transaction risk happens when there is a default payment on the delivery date by one party, causing another party to incur losses 4. (True/False) 5. Labuan FSA is the statutory body responsible for the development and administration of the Labuan International Business and Financial Centre (True/False) Intermediaries who are agents of investors and match buyers with sellers of securities are called brokers 6. (True/False) Money markets are referred to as retail markets because small individual investors are the primary buyers of money market securities 7. (True/False) 8. Non-Bank Financial Institutions (NBFIS) are part of the financial institutions in the intermediation process and their roles are specialized in nature such as pension fund, providing insurance business, promoting economic activities for economic development, credit institution, and others. (True/False) 9. Secured Loan is refers to loans not backed by any assets (clean basis) and lender has first claim upon default payment. (True/False) 10. Interest rates are important to financial institutions since an interest rate increase will decrease the cost of acquiring funds and increase the income from assets. (True/False) 11. Ability to meet commitments is one of the example of red flags. (True/False) Cash deposit machines will provide facilities to deposit money to own account, third party accounts and cash payment through online transaction. 12. (True/False) 13. The real interest rate is equal to the nominal rate minus inflation (True/False) O Hak Cipta Universiti Teknologi MARA CONFIDENTIAL CONFIDENTIAL 6 BA/FEB2022/FIN435 Al-Mudharabah (investment) conce / 7contract made between provide of capital (depositor) and an entrepreneur er fund manager (the Bank) to enable the bank to carry out business ventures within the Shartah quidelines. 14.