Question 1

Two examples of marketable assets include

Accepted Answer

A) savings accounts and demand deposits held at financial institutions. 
B) provincial and federal savings bonds. 
C) demand deposits and provincial savings bonds. 
D) equity securities and T-bills. 
A) savings accounts and demand deposits held at financial institutions. 
B) provincial and federal savings bonds. 
C) demand deposits and provincial savings bonds. 
D) equity securities and T-bills. D

Question 2

Why is the secondary market important?

Accepted Answer

The secondary market is where investors trade previously issued securities.It is important because it provides liquidity to investors.If an efficient secondary market did not exist, investors would be very reluctant to hold securities with longer maturities.If they are not willing to buy these securities, then securities in the primary market will become more difficult to sell.Hence, the secondary market is necessary for the proper functioning of the primary market.

Question 3

A financial security is

Accepted Answer

A) a jail term for a financial manager that has committed fraud. 
B) a contract that is created only when a new stock is issued to the public. 
C) a financial contract created whenever funds are transferred. 
D) a contract that is created only when a new bond is first sold. 
A) a jail term for a financial manager that has committed fraud. 
B) a contract that is created only when a new stock is issued to the public. 
C) a financial contract created whenever funds are transferred. 
D) a contract that is created only when a new bond is first sold. C

Question 4

Joe has just borrowed $5,000 from his aunt in order to make a down payment on a car.This borrowing transaction is an example of

Accepted Answer

A) indirect intermediation. 
B) direct intermediation. 
C) external intermediation. 
D) market transaction. 
A) indirect intermediation. 
B) direct intermediation. 
C) external intermediation. 
D) market transaction.

Question 5

Which of the following is NOT an example of a capital market security?

Accepted Answer

A) bond 
B) debenture 
C) common equity 
D) T-bill 
A) bond 
B) debenture 
C) common equity 
D) T-bill

Question 6

Which of the following items is NOT a real asset?

Accepted Answer

A) land 
B) television 
C) bond 
D) gold mine 
A) land 
B) television 
C) bond 
D) gold mine

Question 7

In Canada, the primary provider of funds to business and government is (are)

Accepted Answer

A) international banks. 
B) large Canadian banks. 
C) the household sector. 
D) market intermediaries. 
A) international banks. 
B) large Canadian banks. 
C) the household sector. 
D) market intermediaries.

Question 8

The three intermediation channels that transfer money from lenders to borrowers are

Accepted Answer

A) direct, indirect, and financial intermediation. 
B) direct, indirect, and monetary intermediation. 
C) direct, financial, and monetary intermediation. 
D) indirect, financial, and monetary intermediation. 
A) direct, indirect, and financial intermediation. 
B) direct, indirect, and monetary intermediation. 
C) direct, financial, and monetary intermediation. 
D) indirect, financial, and monetary intermediation.

Question 9

What are the differences between the primary markets and the secondary markets?

Accepted Answer

The primary market is where a borrower i

Question 10

The exchange that acts as the Canadian national derivatives market and conducts all options and futures trading is called the

Accepted Answer

A) Montreal Exchange (M
E) . 
B) Winnipeg Commodity Exchange. 
C) TSX Venture. 
D) Alpha Exchange. 
A) Montreal Exchange (M
E) . 
B) Winnipeg Commodity Exchange. 
C) TSX Venture. 
D) Alpha Exchange.

Question 11

If Canadian households, in aggregate, own real assets with a market value of $3.194 trillion, and also own net financial assets with a market value of $2.344 trillion, the total net assets of Canadian households have a market value of

Accepted Answer

A) $3.194 trillion 
B) $5.538 trillion 
C) $-0.850 trillion 
D) $0.850 trillion 
A) $3.194 trillion 
B) $5.538 trillion 
C) $-0.850 trillion 
D) $0.850 trillion

Question 12

Who are the biggest borrowers and lenders in Canada, respectively?

Accepted Answer

A) government and households 
B) government and banks 
C) banks and mutual funds 
D) Crown corporations and banks 
A) government and households 
B) government and banks 
C) banks and mutual funds 
D) Crown corporations and banks

Question 13

Given the following hypothetical information regarding the real and financial assets in Canada for 2022 (numbers in $ billions):
 
What is the value of the total net assets in Canada for 2022?

Accepted Answer

A) $5,842 billion 
B) $6,086 billion 
C) $6,124 billion 
D) $6,105 billion 
A) $5,842 billion 
B) $6,086 billion 
C) $6,124 billion 
D) $6,105 billion

Question 14

The spread of the financial crisis in the autumn of 2008 was NOT increased by

Accepted Answer

A) linkages between global financial markets. 
B) the cross listing of firms in different markets. 
C) the consolidation of the global financial system. 
D) excessive debt of the government. 
A) linkages between global financial markets. 
B) the cross listing of firms in different markets. 
C) the consolidation of the global financial system. 
D) excessive debt of the government.

Question 15

Finance is the study of how and under what terms

Accepted Answer

A) savings are allocated between lenders and borrowers. 
B) investments are allocated between investors and brokers. 
C) institutions with excess money make share purchase decisions. 
D) households allocate money between spending and saving. 
A) savings are allocated between lenders and borrowers. 
B) investments are allocated between investors and brokers. 
C) institutions with excess money make share purchase decisions. 
D) households allocate money between spending and saving.

Question 16

As of 2018 what was the major proportion of Canadian households' financial assets?

Accepted Answer

A) stocks and bonds 
B) deposits 
C) foreign investment 
D) claims on retirement and insurance funds 
A) stocks and bonds 
B) deposits 
C) foreign investment 
D) claims on retirement and insurance funds

Question 17

Which is the only province where trades in unlisted securities need to be reported?

Accepted Answer

A) British Columbia 
B) Quebec 
C) Alberta 
D) Ontario 
A) British Columbia 
B) Quebec 
C) Alberta 
D) Ontario

Question 18

Why can't the Canadian government issue equity?

Accepted Answer

A) because assets belong to all Canadians 
B) it is not listed in the financial markets 
C) it has too much debt 
D) because expenditures exceed revenues 
A) because assets belong to all Canadians 
B) it is not listed in the financial markets 
C) it has too much debt 
D) because expenditures exceed revenues

Question 19

If the stock of a listed firm decreases by 50 percent, what does it mean to the shareholders?

Accepted Answer

A) Their ownership of the firm will decrease by 50 percent. 
B) Total value of their holdings decreases by 50 percent. 
C) The debt of the firm decreases by 50 percent. 
D) nothing 
A) Their ownership of the firm will decrease by 50 percent. 
B) Total value of their holdings decreases by 50 percent. 
C) The debt of the firm decreases by 50 percent. 
D) nothing

Question 20

An example of direct intermediation would be

Accepted Answer

A) an individual borrowing money from a bank. 
B) an individual borrowing money from their mother. 
C) an individual using a real estate broker to finance their home purchase. 
D) a stockbroker selling securities to an individual. 
A) an individual borrowing money from a bank. 
B) an individual borrowing money from their mother. 
C) an individual using a real estate broker to finance their home purchase. 
D) a stockbroker selling securities to an individual.

Exam 1: An Introduction to Finance

Two examples of marketable assets include

Why is the secondary market important?

A financial security is

Joe has just borrowed $5,000 from his aunt in order to make a down payment on a car.This borrowing transaction is an example of

Which of the following is NOT an example of a capital market security?

Which of the following items is NOT a real asset?

In Canada, the primary provider of funds to business and government is (are)

The three intermediation channels that transfer money from lenders to borrowers are

What are the differences between the primary markets and the secondary markets?

The exchange that acts as the Canadian national derivatives market and conducts all options and futures trading is called the

If Canadian households, in aggregate, own real assets with a market value of $3.194 trillion, and also own net financial assets with a market value of $2.344 trillion, the total net assets of Canadian households have a market value of

Who are the biggest borrowers and lenders in Canada, respectively?

Given the following hypothetical information regarding the real and financial assets in Canada for 2022 (numbers in $ billions): What is the value of the total net assets in Canada for 2022?

The spread of the financial crisis in the autumn of 2008 was NOT increased by

Finance is the study of how and under what terms

As of 2018 what was the major proportion of Canadian households' financial assets?

Which is the only province where trades in unlisted securities need to be reported?

Why can't the Canadian government issue equity?

If the stock of a listed firm decreases by 50 percent, what does it mean to the shareholders?

An example of direct intermediation would be

Business Corporate Finance

Financial Statements

Financial Statement Analysis and Forecasting

Time Value of Money

Bond Valuation and Interest Rates

Equity Valuation

Risk, Return, and Portfolio Theory

The Capital Asset Pricing Model Capm

Market Efficiency

Forwards, Futures, and Swaps

Options

Capital Budgeting, Risk Considerations, and Other Special Issues

Cash Flow Estimation and Capital Budgeting Decisions

Mergers and Acquisitions

Leasing

Investment Banking and Securities Law

Debt Instruments

Equity and Hybrid Instruments

Cost of Capital

Capital Structure Decisions

Dividend Policy

Working Capital Management: General Issues

Working Capital Management: Current Assets and Current Liabilities

Filters