Question 1

____ securities have a maturity of one year or less; ____ securities are generally more liquid.

Accepted Answer

A)  Money market; capital market
B)  Money market; money market
C)  Capital market; money market
D)  Capital market; capital marketE) None of the above
F) A) and C)

Question 2

Which of the following transactions would not be considered a secondary market transaction?

Accepted Answer

A)  An individual investor purchases some existing shares of stock in IBM through his broker.
B)  An institutional investor sells some Disney stock through its broker.
C)  A firm that was privately held engages in an offering of stock to the public.
D)  All of the above are secondary market transactions.E) All of the above
F) A) and D)

Question 3

By requiring full disclosure of information, securities laws prevent investors from making poor investment decisions.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is not a reason why depository financial institutions are popular?

Accepted Answer

A)  They offer deposit accounts that can accommodate the amount and liquidity characteristics desired by most surplus units.
B)  They repackage funds received from deposits to provide loans of the size and maturity desired by deficit units.
C)  They accept the risk on loans provided.
D)  They use their information resources to act as a broker, executing securities transactions between two parties.
E)  They have more expertise than individual surplus units in evaluating the creditworthiness of deficit units.F) A) and E)
G) A) and B)

Question 5

If financial markets are efficient, this implies that investors can ignore the various investment instruments available.

Accepted Answer

A) True 
 B)False

Exam 1: Role of Financial Markets and Institutions

Which of the following transactions would not be considered a secondary market transaction?

Correct Answer
verified

securities have a maturity of one year or less; securities are generally more liquid.

Correct Answer
verified

If financial markets are efficient, this implies that investors can ignore the various investment instruments available.

Correct Answer
verified

Which of the following is not a reason why depository financial institutions are popular?

Correct Answer
verified

By requiring full disclosure of information, securities laws prevent investors from making poor investment decisions.

Correct Answer
verified

Exam 1: Role of Financial Markets and Institutions

Which of the following transactions would not be considered a secondary market transaction?

Correct AnswerverifiedShow Answer

____ securities have a maturity of one year or less; ____ securities are generally more liquid.

Correct AnswerverifiedShow Answer

If financial markets are efficient, this implies that investors can ignore the various investment instruments available.

Correct AnswerverifiedShow Answer

Which of the following is not a reason why depository financial institutions are popular?

Correct AnswerverifiedShow Answer

By requiring full disclosure of information, securities laws prevent investors from making poor investment decisions.

Correct AnswerverifiedShow Answer

Correct Answer
verified

securities have a maturity of one year or less; securities are generally more liquid.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified