Exam 2: The Domestic and International Financial Marketplace

An investor decides to sell his stock based on information he received about some internal audit revealing that the company has severe financial problems. Trading on this information is called ____.

A multinational corporation ____.

The barriers to the free flow of capital among the major world capital markets include all of the following EXCEPT ____.

Capital markets are said to be efficient. This means _____.

If a treasury bond can be purchased for $9,450 today and the bond holder will receive $850 in interest and the face value at maturity is $10,000, what is the holding period return (round % to 1 decimal)?

If Japanese yen are deposited in a bank in Paris, the deposits would be called ____

Each of the following contributed to the start of the financial crisis in 2007 EXCEPT ____.

Changes in the tax code that speed up depreciation _____ the present value of investment cash flows and therefore make the investment _____ desirable.

There are three degrees of market efficiency. All of the following statements are correct EXCEPT ____.

Insider trading is defined as _____.

The fact that no investor can expect to earn excess returns based on an investment strategy using only historical stock price or return information is an example of ____ market efficiency.

If the spot rate for Swiss francs is $0.6658/franc and the 180-day forward rate is $0.6637, the market is indicating that the Swiss franc is expected to _____.

What is the holding period return to an investor who bought 100 shares of Oil Slick stock nine months ago for $36 per share, received two $50 dividend checks, and sold the stock today at $38 a share (round % to 2 decimals)?

Maher purchased 100 shares of Chill Pill Pharmaceuticals at $30 per share last spring and sold them in six months for $36 per share. The stock paid no dividend. What was Maher's holding period return?

Define the differences between the money market and the capital market.

In an efficient capital market ____.

What are the differences between the primary and secondary markets?

Which of the following (if any) are not financial intermediaries?

The difference between a put option and a call option is that ____.

Financial intermediaries _____.