30 câu hỏi
The bond markets are important because
they are easily the most widely followed financial markets in the United States.
they are the markets where interest rates are determined.
they are the markets where foreign exchange rates are determined.
all of the above.
Compared to interest rates on long-term U.S. government bonds, interest rates on_________ fluctuate more and are lower on average.
medium-quality corporate bonds
low-quality corporate bonds
high-quality corporate bonds
three-month Treasury bills
none of the above
Compared to interest rates on long-term U.S. government bonds, interest rates on three-month Treasury bills fluctuate _________ and are _________ on average.
more; lower
less; lower
more; higher
less; higher
The stock market is important because
it is where interest rates are determined.
it is the most widely followed financial market in the United States.
it is where foreign exchange rates are determined.
all of the above
Which of the following can be described as involving direct finance?
A corporations stock is traded in an over-the-counter market.
People buy shares in a mutual fund.
A pension fund manager buys commercial paper in the secondary market.
An insurance company buys shares of common stock in the over-the-counter markets.
None of the above
Which of the following can be described as involving direct finance?
A corporations stock is traded in an over-the-counter market.
A corporation buys commercial paper issued by another corporation.
A pension fund manager buys commercial paper from the issuing corporation.
Both A and B of the above.
Both B and C of the above
Which of the following can be described as involving indirect finance?
A corporation takes out loans from a bank.
People buy shares in a mutual fund.
A corporation buys commercial paper in a secondary market.
All of the above.
Only A and B of the above
Which of the following can be described as involving indirect finance?
A bank buys a U.S. Treasury bill from one of its depositors.
A corporation buys commercial paper issued by another corporation.
A pension fund manager buys commercial paper in the primary market.
Both A and C of the above
Financial markets improve economic welfare because
they allow funds to move from those without productive investment opportunities to those who have such opportunities.
they allow consumers to time their purchases better.
they weed out inefficient firms.
they do all of the above.
they do A and B of the above
Which of the following are securities?
A certificate of deposit
A share of Texaco common stock
A Treasury bill
All of the above
Only A and B of the above
Which of the following statements about the characteristics of debt and equity are true?
They both can be long-term financial instruments.
They both involve a claim on the issuers income.
They both enable a corporation to raise funds.
All of the above.
Only A and B of the above
Which of the following are primary markets?
The New York Stock Exchange
The U.S. government bond market
The over-the-counter stock market
The options markets
None of the above
Intermediaries who are agents of investors and match buyers with sellers of securities are called
investment bankers.
traders.
brokers.
dealers.
none of the above
Intermediaries who link buyers and sellers by buying and selling securities at stated prices are called
investment bankers.
traders.
brokers.
dealers.
none of the above.
An important financial institution that assists in the initial sale of securities in the primary market is the...
investment bank.
commercial bank.
stock exchange.
brokerage house.
Which of the following statements about financial markets and securities are true?
Most common stocks are traded over-the-counter, although the largest corporations have their shares traded at organized stock exchanges such as the New York Stock Exchange.
A corporation acquires new funds only when its securities are sold in the primary market.
Money market securities are usually more widely traded than longer-term securities and so tend to be more liquid.
All of the above are true.
Only A and B of the above are true.
Which of the following statements about financial markets and securities are true?
A bond is a long-term security that promises to make periodic payments called dividends to the firms residual claimants.
A debt instrument is intermediate term if its maturity is less than one year.
A debt instrument is long term if its maturity is ten years or longer.
The maturity of a debt instrument is the time term) that has elapsed since it was issued
Which of the following markets is sometimes organized as an over-the-counter market?
The stock market
The bond market
The foreign exchange market
The federal funds market
all of the above
Which of the following is a money market security?
Treasury note
municipal bond
mortgage
commercial paper
Bonds that are sold in a foreign country and are denominated in that country's currency are known as
foreign bonds.
Eurobonds.
Eurocurrencies.
Eurodollars.
Bonds that are sold in a foreign country and are denominated in a currency other than that of the country in which they are sold are known as
foreign bonds.
Eurobonds.
Eurocurrencies.
Eurodollars.
The main sources of financing for businesses, in order of importance, are
financial intermediaries, issuing bonds, issuing stocks.
issuing bonds, issuing stocks, financial intermediaries.
issuing stocks, issuing bonds, financial intermediaries.
issuing stocks, financial intermediaries, issuing bonds
The presence of transaction costs in financial markets explains, in part, why
financial intermediaries and indirect finance play such an important role in financial markets.
equity and bond financing play such an important role in financial markets.
corporations get more funds through equity financing than they get from financial intermediaries.
direct financing is more important than indirect financing as a source of funds
Financial intermediaries can substantially reduce transaction costs per dollar of transactions because their large size allows them to take advantage of
poorly informed consumers.
standardization.
economies of scale.
their market power
The purpose of diversification is to
reduce the volatility of a portfolios return.
raise the volatility of a portfolios return.
reduce the average return on a portfolio.
raise the average return on a portfolio
Through risk-sharing activities, a financial intermediary _________ its own risk and_________ the risks of its customers.
reduces; increases
increases; reduces
reduces; reduces
increases; increases
When the potential borrowers who are the most likely to default are the ones most actively seeking a loan, _________ is said to exist.
asymmetric information
adverse selection
moral hazard
fraud
The concept of adverse selection helps to explain
which firms are more likely to obtain funds from banks and other financial intermediaries, rather than from the securities markets.
why indirect finance is more important than direct finance as a source of business finance.
why direct finance is more important than indirect finance as a source of business finance.
only A and B of the above.
only A and C of the above
Adverse selection is a problem associated with equity and debt contracts arising from...
the lenders relative lack of information about the borrowers potential returns and risks of his investment activities.
the lenders inability to legally require sufficient collateral to cover a 100 percent loss if the borrower defaults.
the borrowers lack of incentive to seek a loan for highly risky investments.
none of the above
When the least desirable credit risks are the ones most likely to seek loans, lenders are subject to the
moral hazard problem.
adverse selection problem.
shirking problem.
free-rider problem.
principal-agent problem