Exam 1: Investments: Background and Issues

________ portfolio management calls for holding diversified portfolios without spending effort or resources attempting to improve investment performance through security analysis.

Which of the following is not a money market security?

________ is an example of an agency problem.

Financial institutions that specialise in assisting corporations in primary market transactions are called ________.

Individuals may find it more advantageous to purchase claims from a financial intermediary rather than directly purchasing claims in capital markets because ________. I. intermediaries are better diversified than most individuals II. intermediaries can exploit economies of scale in investing that individual investors cannot III. intermediated investments usually offer higher rates of return than direct capital market claims

Which of the following is not an example of a financial intermediary?

Which of the following is not a financial intermediary?

________ assets generate net income to the economy and ________ assets define allocation of income among investors.

________ is not a derivative security.

In 2008 the largest corporate bankruptcy in US history involved the investment banking firm of ________.

In securities markets, there should be a risk-return trade-off with higher-risk assets having ________ expected returns than lower-risk assets.

Which of the following are financial assets? I. Debt securities II. Equity securities III. Derivative securities

The inability of shareholders to influence the decisions of managers, despite overwhelming shareholder support, is a breakdown in what process or mechanism?

In a capitalist system capital resources are primarily allocated by ________.

In 2011 real assets represented approximately ________ per cent of the total asset holdings of Australian households.