Question 1

Firms that wish to raise funds for investment purposes issue securities in the

Accepted Answer

A)  primary and secondary markets. 
B)  primary markets. 
C)  secondary markets. 
D)  intermediary markets. 
A)  primary and secondary markets. 
B)  primary markets. 
C)  secondary markets. 
D)  intermediary markets.

Question 2

Established firms in need of additional capital can raise it in the secondary market.

Accepted Answer

A) True 
 B)False

Question 3

There are more companies listed on NASDAQ than are listed on the New York Stock Exchange.

Accepted Answer

A) True 
 B)False

Question 4

A company has the option to pay bond interest or not.

Accepted Answer

A) True 
 B)False

Question 5

Describe the tax benefits to a corporation of issuing debt rather than issuing stock.

Accepted Answer

The greatest advantage to issuing debt i

Question 6

Preferred stock prices are solely dependent on investors' expectations of future cash flows to the corporation.

Accepted Answer

A) True 
 B)False

Question 7

The principal savers in the financial markets are

Accepted Answer

A)  businesses. 
B)  banks. 
C)  individuals. 
D)  governments. 
A)  businesses. 
B)  banks. 
C)  individuals. 
D)  governments.

Question 8

Owners of common stock are the owners of the firm.

Accepted Answer

A) True 
 B)False

Question 9

In Financial markets, borrowers and lenders most both be located in the same country.

Accepted Answer

A) True 
 B)False

Question 10

A bond matures in less than 10 years.

Accepted Answer

A) True 
 B)False

Question 11

Capital markets are markets for short term debt instruments maturing in less than one year, and money markets are markets for long term debt instruments maturing in more than one year.

Accepted Answer

A) True 
 B)False

Question 12

Organized security exchanges do not physically occupy space.

Accepted Answer

A) True 
 B)False

Question 13

Insurance companies have a great deal of money to invest because

Accepted Answer

A)  there profit margins are so high. 
B)  because they are reluctant to cover insurable losses. 
C)  because they must hold large reserves to pay potential claims. 
D)  insurance do not actually have large sums to invest. 
A)  there profit margins are so high. 
B)  because they are reluctant to cover insurable losses. 
C)  because they must hold large reserves to pay potential claims. 
D)  insurance do not actually have large sums to invest.

Question 14

Bonds are less risky than are stocks because their return is more predictable.

Accepted Answer

A) True 
 B)False

Question 15

Each year, shareholders receive a dividend equal to the firm's net earnings divided by the number of shares of common stock.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following financial instruments is not traded in the capital markets?

Accepted Answer

A)  debt with a maturity of less than one year 
B)  bonds 
C)  common stock 
D)  preferred stock 
A)  debt with a maturity of less than one year 
B)  bonds 
C)  common stock 
D)  preferred stock

Question 17

Each of the following is true of Mutual Funds EXCEPT

Accepted Answer

A)  Funds can be classified as load or no-load funds. 
B)  Mutual Fund shares must be bought from or sold to the Fund by investors. 
C)  An index fund is the fund with the highest expenses payable by investors. 
D)  The NAV is the total value of stock held by the fund divided by the number of outstanding shares in the mutual fund. 
A)  Funds can be classified as load or no-load funds. 
B)  Mutual Fund shares must be bought from or sold to the Fund by investors. 
C)  An index fund is the fund with the highest expenses payable by investors. 
D)  The NAV is the total value of stock held by the fund divided by the number of outstanding shares in the mutual fund.

Question 18

Mortgage Backed securities are bonds whose cash flows are backed by large pools of mortgages.

Accepted Answer

A) True 
 B)False

Question 19

Private equity firms are financial intermediaries that are not traded on public capital markets.

Accepted Answer

A) True 
 B)False

Question 20

The difference between mutual funds and ETFs is that ETFs are traded on exchanges and mutual funds are not.

Accepted Answer

A) True 
 B)False

Firms that wish to raise funds for investment purposes issue securities in the

Established firms in need of additional capital can raise it in the secondary market.

There are more companies listed on NASDAQ than are listed on the New York Stock Exchange.

A company has the option to pay bond interest or not.

Describe the tax benefits to a corporation of issuing debt rather than issuing stock.

Preferred stock prices are solely dependent on investors' expectations of future cash flows to the corporation.

The principal savers in the financial markets are

Owners of common stock are the owners of the firm.

In Financial markets, borrowers and lenders most both be located in the same country.

A bond matures in less than 10 years.

Capital markets are markets for short term debt instruments maturing in less than one year, and money markets are markets for long term debt instruments maturing in more than one year.

Organized security exchanges do not physically occupy space.

Insurance companies have a great deal of money to invest because

Bonds are less risky than are stocks because their return is more predictable.

Each year, shareholders receive a dividend equal to the firm's net earnings divided by the number of shares of common stock.

Which of the following financial instruments is not traded in the capital markets?

Each of the following is true of Mutual Funds EXCEPT

Mortgage Backed securities are bonds whose cash flows are backed by large pools of mortgages.

Private equity firms are financial intermediaries that are not traded on public capital markets.

The difference between mutual funds and ETFs is that ETFs are traded on exchanges and mutual funds are not.

Getting Started-Principles of Finance

Understanding Financial Statements, Taxes, and Cash Flows

Financial Analysis-Sizing up Firm Performance

Time Value of Money-The Basics

The Time Value of Money-Annuities and Other Topics

An Introduction to Risk and Return-History of Financial Market Returns

Risk and Return-Capital Market Theory

Debt Valuation and Interest Rates

Stock Valuation

Investment Decision Criteria

Analyzing Project Cash Flows

Risk Analysis and Project Evaluation

The Cost of Capital

Capital Structure Policy

Dividend Policy

Financial Forecasting and Planning

Working Capital Management

International Business Finance

Corporate Risk Management

Filters

Exam 2: Firms and the Financial Market

Firms that wish to raise funds for investment purposes issue securities in the

Established firms in need of additional capital can raise it in the secondary market.

There are more companies listed on NASDAQ than are listed on the New York Stock Exchange.

A company has the option to pay bond interest or not.

Describe the tax benefits to a corporation of issuing debt rather than issuing stock.

Preferred stock prices are solely dependent on investors' expectations of future cash flows to the corporation.

The principal savers in the financial markets are

Owners of common stock are the owners of the firm.

In Financial markets, borrowers and lenders most both be located in the same country.

A bond matures in less than 10 years.

Capital markets are markets for short term debt instruments maturing in less than one year, and money markets are markets for long term debt instruments maturing in more than one year.

Organized security exchanges do not physically occupy space.

Insurance companies have a great deal of money to invest because

Bonds are less risky than are stocks because their return is more predictable.

Each year, shareholders receive a dividend equal to the firm's net earnings divided by the number of shares of common stock.

Which of the following financial instruments is not traded in the capital markets?

Each of the following is true of Mutual Funds EXCEPT

Mortgage Backed securities are bonds whose cash flows are backed by large pools of mortgages.

Private equity firms are financial intermediaries that are not traded on public capital markets.

The difference between mutual funds and ETFs is that ETFs are traded on exchanges and mutual funds are not.

Getting Started-Principles of Finance

Understanding Financial Statements, Taxes, and Cash Flows

Financial Analysis-Sizing up Firm Performance

Time Value of Money-The Basics

The Time Value of Money-Annuities and Other Topics

An Introduction to Risk and Return-History of Financial Market Returns

Risk and Return-Capital Market Theory

Debt Valuation and Interest Rates

Stock Valuation

Investment Decision Criteria

Analyzing Project Cash Flows

Risk Analysis and Project Evaluation

The Cost of Capital

Capital Structure Policy

Dividend Policy

Financial Forecasting and Planning

Working Capital Management

International Business Finance

Corporate Risk Management

Filters