Final answer:
Level sets of frequent, consistent cash flows are called annuities. In the financial market, a rise in both the demand for loans and the supply of loans will increase the quantity of loans made and received. Understanding the assets of a bank, like loans, is important in assessing the financial health and risk profile of the institution. So, the correct option is b. annuities.
Step-by-step explanation:
Level sets of frequent, consistent cash flows are referred to as annuities. An annuity is a financial product that pays out a fixed stream of payments to an individual, typically used as an income stream for retirees. They are contracts designed to pay out funds at a series of intervals, which can be either fixed or variable in their payment amounts.
Now, regarding the impact of changes in the financial market on the number of loans made and received, a rise in demand for loans will naturally lead to an increase in the number of loans made, as more people are seeking to borrow money. Similarly, a rise in the supply of loans indicates that there are more funds available for lending, and as such, more loans will be given out. Both an increase in demand and an increase in supply can lead to more active borrowing and lending in the financial market.
A bank's assets include cash in its vaults, reserves at the Federal Reserve Bank, loans made to customers, and bonds. The quality of these assets, especially loans, can affect the valuation and the willingness of other parties to lend or borrow. For instance, a borrower with a history of late payments on a loan is seen as a higher risk and less likely to repay the loan on time, which could decrease the desirability of that loan as an asset.