Exam 1: Investments: Background and Issues

According to the Flow of Funds Accounts of the United States, the largest liability of U.S. households is ________.

An example of a real asset is: I. A college education II. Customer goodwill III. A patent

Asset allocation refers to ________.

Security selection refers to ________.

Methods of encouraging managers to act in shareholders' best interest include: I. Threat of takeover. II. Proxy fights for control of the board of directors. III. Tying managers' compensation to stock price performance.

The Dodd-Frank Reform Act does all of the following except:

Which of the following is not a financial intermediary?

Financial markets allow for all but which one of the following?

Financial assets represent ________ of total assets of U.S. households.

Surf City Software Company develops new surf forecasting software. It sells the software to Microsoft in exchange for 1,000 shares of Microsoft common stock. Surf City Software has exchanged a ________ asset for a ________ asset in this transaction.

In 2017 mortgages represented approximately ________ of total liabilities and net worth of American households.

A major cause of the mortgage market meltdown in 2007 and 2008 was linked to ________.

The efficient market hypothesis suggests that ________.

In securities markets, there should be a risk-return trade-off with higher-risk assets having ________ expected returns than lower-risk assets.

In real assets represented approximately ________ of the total asset holdings of American households.

________ represents an ownership share in a corporation.

The 2002 law designed to improve corporate governance is titled the ________.

An example of a derivative security is ________.

Firms that specialize in helping companies raise capital by selling securities to the public are called ________.

According to the Flow of Funds Accounts of the United States, the largest financial asset of U.S. households is ________.