Chapter 2 Financial Markets

Beschreibung

Quiz am Chapter 2 Financial Markets, erstellt von run2hurdle am 26/09/2015.
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Quiz von run2hurdle, aktualisiert more than 1 year ago
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Zusammenfassung der Ressource

Frage 1

Frage
Money market securities have maturities of one year or less.
Antworten
  • True
  • False

Frage 2

Frage
Preferred stock pays a variable dividend.
Antworten
  • True
  • False

Frage 3

Frage
The cost of borrowing funds is most commonly called the interest rate.
Antworten
  • True
  • False

Frage 4

Frage
The primary market is the only market in which the issuer is directly involved in the transaction and recieves direct benefits from the issue.
Antworten
  • True
  • False

Frage 5

Frage
The over-the-counter market is generally reserved for stocks with very large trading volume.
Antworten
  • True
  • False

Frage 6

Frage
T-Bonds are money market securities, while T-bills and T-notes are traded in the capital market.
Antworten
  • True
  • False

Frage 7

Frage
Market makers include both specialist and dealers.
Antworten
  • True
  • False

Frage 8

Frage
Specialist and dealers determine the price of the security.
Antworten
  • True
  • False

Frage 9

Frage
Corporate bonds pay interest payments that are usually tax-exempt to investors.
Antworten
  • True
  • False

Frage 10

Frage
The New York Stock Exchange is an example of an organized market.
Antworten
  • True
  • False

Frage 11

Frage
Earnings should retained only if the firm needs capital very badly and would have difficulty raising it from external sources.
Antworten
  • True
  • False

Frage 12

Frage
The importance of the role of financial management is emphasized by examples of companies whose strategic financing decisions contributed to their demise, or to their success when economic conditions changed rapidly.
Antworten
  • True
  • False

Frage 13

Frage
The riskiness inherent in a firm's earnings per share (EPS) depends on both the types of projects the firm takes on and the manner in which the projects are financed.
Antworten
  • True
  • False

Frage 14

Frage
The two most important functions of markets are to establish fair prices and provide liquidity.
Antworten
  • True
  • False

Frage 15

Frage
Bonds are long-term loans that typically pay interest per year based on the average bank rate.
Antworten
  • True
  • False

Frage 16

Frage
The _______ is a financial relationship created by a number of institutions with arrangements that allow the suppliers and demanders of long term funds to make transactions.
Antworten
  • money market
  • bond market
  • capital market
  • eurobond market

Frage 17

Frage
The AMEX Exchange could be classified as a/an ______ security exchange.
Antworten
  • organized
  • over-the-counter
  • primary
  • closed

Frage 18

Frage
In the over-the-counter market, dealers are linked with the purchasers and sellers of securities through the _____ system.
Antworten
  • NASDAQ
  • bonds
  • stocks
  • short-term funds

Frage 19

Frage
Common stockholders expect to receive a return through capital gains and
Antworten
  • interest payments
  • dividends
  • fixed periodic dividends
  • coupon payments

Frage 20

Frage
Bonds with an AAA rating will have a ______ interest rate compared to bonds with a BAA rating.
Antworten
  • lower
  • equal
  • higher
  • undetermined

Frage 21

Frage
The______ is the financial market in which securities are initially issued.
Antworten
  • OTC
  • secondary market
  • primary market
  • private placement

Frage 22

Frage
________ are long-term debt instruments that are used by business and government to raise large sums of money.
Antworten
  • T-bills
  • Common stock
  • Preferred stock
  • Bonds

Frage 23

Frage
Shares of ____ are units of ownerships interest, or equity, in a corporation.
Antworten
  • bank loans
  • common stock
  • debt
  • commercial paper

Frage 24

Frage
The possibility that the issuer of debt will not pay the principal as scheduled.
Antworten
  • liquidity risk
  • default risk
  • contractual risk
  • maturity risk

Frage 25

Frage
Which of the following does not need to be considered when assessing the impact of financial decision?
Antworten
  • Financial market conditions
  • timing of the earnings flow
  • project earnings
  • all of the above must be considered.

Frage 26

Frage
Money markets are markets for
Antworten
  • foreign currency exchange
  • corporate stocks
  • long-term bonds
  • short-term debt securities

Frage 27

Frage
Which of the following is not a major participant in the money market.
Antworten
  • Federal Reserve
  • Commercial Banks
  • Money Market Mutual Funds
  • Wall Street Dealers

Frage 28

Frage
If a $2,000 bond is quoted at 120:16, the price of the bond is ______
Antworten
  • 1,205.31
  • 1,205.00
  • 2,410.62
  • 2,410.00

Frage 29

Frage
The difference between Common Stock and Preferred Stock lies in:
Antworten
  • vote or not
  • fixed or variable dividends
  • Priority of claim on assets
  • all of the above
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