Chapter 2 Financial Markets

Descripción

Test sobre Chapter 2 Financial Markets, creado por run2hurdle el 26/09/2015.
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Test por run2hurdle, actualizado hace más de 1 año
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Creado por run2hurdle hace más de 8 años
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Resumen del Recurso

Pregunta 1

Pregunta
Money market securities have maturities of one year or less.
Respuesta
  • True
  • False

Pregunta 2

Pregunta
Preferred stock pays a variable dividend.
Respuesta
  • True
  • False

Pregunta 3

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

Pregunta 4

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

Pregunta 5

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

Pregunta 6

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

Pregunta 7

Pregunta
Market makers include both specialist and dealers.
Respuesta
  • True
  • False

Pregunta 8

Pregunta
Specialist and dealers determine the price of the security.
Respuesta
  • True
  • False

Pregunta 9

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

Pregunta 10

Pregunta
The New York Stock Exchange is an example of an organized market.
Respuesta
  • True
  • False

Pregunta 11

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

Pregunta 12

Pregunta
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.
Respuesta
  • True
  • False

Pregunta 13

Pregunta
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.
Respuesta
  • True
  • False

Pregunta 14

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

Pregunta 15

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

Pregunta 16

Pregunta
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.
Respuesta
  • money market
  • bond market
  • capital market
  • eurobond market

Pregunta 17

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

Pregunta 18

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

Pregunta 19

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

Pregunta 20

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

Pregunta 21

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

Pregunta 22

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

Pregunta 23

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

Pregunta 24

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

Pregunta 25

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

Pregunta 26

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

Pregunta 27

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

Pregunta 28

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

Pregunta 29

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