Exam 5: Financial Markets, Institutions, and Securities

Equity capital can be raised through

Most businesses raise money by selling their securities in

A feature that gives the issuer the opportunity to repurchase bonds at a stated price prior to maturity is called

From the corporation's point of view, the advantages of issuing preferred stock include all of thefollowing EXCEPT

The claims of the equity holders on income have priority over

The riskiness of publicly traded bond issues is rated by independent agencies. According toDominion Bond Rate service, an AAA bond and a CCC bond are ____________ and___________ ,respectively.

To compensate for the uncertainty of future interest rates and the fact that the longer the term of aloan the higher the probability that the borrower will default, the lender typically

The___________ is created by a number of institutions and arrangements that allow the suppliers anddemanders of long-term funds to make transactions.

A firm has an outstanding issue of 1,000 shares of preferred stock with a $100 par value and an 8percent annual dividend. The firm also has 5,000 shares of common stock outstanding. If the stockis cumulative and the board of directors has passed the preferred dividend for the prior two years, how much must the preferred stockholders be paid prior to paying dividends to common stockholders?

The ___________is created by a financial relationship between suppliers and demanders of short-termfunds.

The significant portion of the return on a zero coupon bond is in the form of

All of the following are examples of restrictive debt covenants EXCEPT

A___________ accepts both demand and time deposits and primarily makes loans directly to both individual and business borrowers or through the financial markets.

A___________ accepts deposits and makes loans, and manages assets for estates and registered retirement savings plans.

The opportunity for management to purchase a certain number of shares of their firm's commonstock at a specified price over a certain period of time is

The major securities traded in the capital markets are

All of the following are services provided by financial institutions EXCEPT

All of the following are examples of restrictive debt covenants EXCEPT

A___________ is the largest financial intermediary handling individual savings. It receives premiumpayments that are placed in loans or investments to accumulate funds to cover future benefits.

Each of the following instruments demonstrates the safety of principal characteristic common to marketable securities EXCEPT