Question 1

The consolidation of U.S.and global stock markets has

Accepted Answer

A) been increasing recently, as shown by the merger of the NYSE and Euronext. 
B) been decreasing recently, as shown by the decrease in multi-listed stocks. 
C) led to lower risk in investments because markets have become less interdependent. 
D) led to increased reliance on human interactions in securities trading. 
A) been increasing recently, as shown by the merger of the NYSE and Euronext. 
B) been decreasing recently, as shown by the decrease in multi-listed stocks. 
C) led to lower risk in investments because markets have become less interdependent. 
D) led to increased reliance on human interactions in securities trading.

Question 2

An example of a non-marketable financial asset is a

Accepted Answer

A) demand deposit. 
B) T-bill. 
C) commercial paper. 
D) common share. 
A) demand deposit. 
B) T-bill. 
C) commercial paper. 
D) common share.

Question 3

What is the main difference between real assets and financial assets?

Accepted Answer

A) Real assets are tangible and financial assets are intangible. 
B) Real assets have known values, while the values of financial assets are not known. 
C) Real assets are intangible and financial assets are tangible. 
D) Real assets have unknown values, while the values of financial assets are known. 
A) Real assets are tangible and financial assets are intangible. 
B) Real assets have known values, while the values of financial assets are not known. 
C) Real assets are intangible and financial assets are tangible. 
D) Real assets have unknown values, while the values of financial assets are known.

Question 4

How do governments obtain the majority of their short- and long-term financing?

Accepted Answer

A) T-bills and Canada Savings Bonds 
B) T-bills, traditional bonds, and Canada Savings Bonds 
C) T-bills, equity, and traditional bonds 
D) traditional bonds and Canada Savings Bonds 
A) T-bills and Canada Savings Bonds 
B) T-bills, traditional bonds, and Canada Savings Bonds 
C) T-bills, equity, and traditional bonds 
D) traditional bonds and Canada Savings Bonds

Question 5

You are provided with the following hypothetical information regarding the real and financial assets in Canada for 2022 (numbers in $ billions):
 
What is the value of the net financial assets owned by non-residents for 2022?

Accepted Answer

A) $901 billion 
B) $51 billion 
C) $2,293 billion 
D) There is not enough information to answer the question. 
A) $901 billion 
B) $51 billion 
C) $2,293 billion 
D) There is not enough information to answer the question.

Question 6

Explain what an auction market is and how it works.

Accepted Answer

Stock exchanges are auction markets.Brok

Question 7

Which is the world's largest and most famous stock market?

Accepted Answer

A) New York Stock Exchange (NYS
E)  
B) Toronto Stock Exchange (TSX) 
C) Tokyo Stock Exchange (TS
E)  
D) London Stock Exchange (LS
E)  
A) New York Stock Exchange (NYS
E)  
B) Toronto Stock Exchange (TSX) 
C) Tokyo Stock Exchange (TS
E)  
D) London Stock Exchange (LS
E)

Question 8

Which of the following was NOT a reason for the credit crunch of 2008-09?

Accepted Answer

A) mistrust between financial intermediaries 
B) illiquidity of debt markets 
C) the arrest of Bernard Madoff 
D) bankruptcy of one of the leading financial institutions 
A) mistrust between financial intermediaries 
B) illiquidity of debt markets 
C) the arrest of Bernard Madoff 
D) bankruptcy of one of the leading financial institutions

Question 9

The main difference between exchanges and dealer/OTC markets is

Accepted Answer

A) exchanges are a part of the primary market, while dealer and OTC markets are part of the secondary market. 
B) transactions in dealer markets are conducted entirely by humans, not electronically. 
C) exchanges have a physical location while dealer and OTC markets do not. 
D) All of the above are differences between exchanges and dealer markets. 
A) exchanges are a part of the primary market, while dealer and OTC markets are part of the secondary market. 
B) transactions in dealer markets are conducted entirely by humans, not electronically. 
C) exchanges have a physical location while dealer and OTC markets do not. 
D) All of the above are differences between exchanges and dealer markets.

Question 10

Which of the following is NOT a financial intermediary?

Accepted Answer

A) chartered banks 
B) insurance companies 
C) pension funds 
D) mutual funds 
A) chartered banks 
B) insurance companies 
C) pension funds 
D) mutual funds

Question 11

Which of the following sectors is NOT a user of savings in the economy?

Accepted Answer

A) business sector 
B) household sector 
C) government sector 
D) banking sector 
A) business sector 
B) household sector 
C) government sector 
D) banking sector

Question 12

What is an over-the-counter market? Do all bonds in Canada trade over-the-counter?

Accepted Answer

"Over-the-counter" means a large network

Question 13

Which of the following is NOT a component of debt securities?

Accepted Answer

A) maturity 
B) repayment 
C) dividends 
D) interest payments 
A) maturity 
B) repayment 
C) dividends 
D) interest payments

Question 14

Which of the following does NOT appear as an item on Canada's balance sheet, as presented in the text?

Accepted Answer

A) non-residential structures 
B) net worth or equity 
C) net foreign liabilities 
D) net foreign assets 
A) non-residential structures 
B) net worth or equity 
C) net foreign liabilities 
D) net foreign assets

Question 15

Entities that invest funds on behalf of others and change the nature of the transactions are called

Accepted Answer

A) brokers. 
B) financial intermediaries. 
C) dealers. 
D) market intermediaries. 
A) brokers. 
B) financial intermediaries. 
C) dealers. 
D) market intermediaries.

Question 16

Financial markets are usually classified by the type and maturity of the financial assets traded.The two main classifications are as follows:

Accepted Answer

A) bond market and money market. 
B) money market and capital market. 
C) bond market and foreign-exchange market. 
D) commodity market and capital market. 
A) bond market and money market. 
B) money market and capital market. 
C) bond market and foreign-exchange market. 
D) commodity market and capital market.

Question 17

Human capital is

Accepted Answer

A) based on only the current skills, but not the education, of a country's citizens. 
B) based on only the education, but not the current skills, of a country's citizens. 
C) based on the skills and education of citizens and should be included in a country's wealth. 
D) difficult to measure and should therefore not be included in a country's wealth. 
A) based on only the current skills, but not the education, of a country's citizens. 
B) based on only the education, but not the current skills, of a country's citizens. 
C) based on the skills and education of citizens and should be included in a country's wealth. 
D) difficult to measure and should therefore not be included in a country's wealth.

Question 18

Which of the following is NOT one of the main functions performed by mutual funds?

Accepted Answer

A) pooling sums of money to make investments 
B) paying out premiums to their clients 
C) providing professional management expertise 
D) acting as a "pass-through" for individuals to invest in the equity and debt markets 
A) pooling sums of money to make investments 
B) paying out premiums to their clients 
C) providing professional management expertise 
D) acting as a "pass-through" for individuals to invest in the equity and debt markets

Question 19

Which of the following is NOT a benefit of global financial markets?

Accepted Answer

A) They represent important sources of funds for borrowers. 
B) They provide diversification benefits to Canadian investors. 
C) Canadian companies can list their shares in different markets. 
D) The value of Canadian shares becomes more stable. 
A) They represent important sources of funds for borrowers. 
B) They provide diversification benefits to Canadian investors. 
C) Canadian companies can list their shares in different markets. 
D) The value of Canadian shares becomes more stable.

Question 20

Define and describe the difference between the third and fourth markets.

Accepted Answer

The third market is an OTC market for th

Exam 1: An Introduction to Finance

The consolidation of U.S.and global stock markets has

An example of a non-marketable financial asset is a

What is the main difference between real assets and financial assets?

How do governments obtain the majority of their short- and long-term financing?

You are provided with the following hypothetical information regarding the real and financial assets in Canada for 2022 (numbers in $ billions): What is the value of the net financial assets owned by non-residents for 2022?

Explain what an auction market is and how it works.

Which is the world's largest and most famous stock market?

Which of the following was NOT a reason for the credit crunch of 2008-09?

The main difference between exchanges and dealer/OTC markets is

Which of the following is NOT a financial intermediary?

Which of the following sectors is NOT a user of savings in the economy?

What is an over-the-counter market? Do all bonds in Canada trade over-the-counter?

Which of the following is NOT a component of debt securities?

Which of the following does NOT appear as an item on Canada's balance sheet, as presented in the text?

Entities that invest funds on behalf of others and change the nature of the transactions are called

Financial markets are usually classified by the type and maturity of the financial assets traded.The two main classifications are as follows:

Human capital is

Which of the following is NOT one of the main functions performed by mutual funds?

Which of the following is NOT a benefit of global financial markets?

Define and describe the difference between the third and fourth markets.

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

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