Question 1

If the supply of loanable funds decreases relative to the demand for those funds, then we would expect:

Accepted Answer

A)  interest rates to remain unchanged. 
B)  interest rates to increase. 
C)  interest rates to decrease. 
D)  the cost of money to remain unchanged. 
A)  interest rates to remain unchanged. 
B)  interest rates to increase. 
C)  interest rates to decrease. 
D)  the cost of money to remain unchanged.

Question 2

Secondary financial markets are similar to:

Accepted Answer

A)  direct auction markets. 
B)  new-car markets. 
C)  used-car markets. 
D)  direct financial market. 
A)  direct auction markets. 
B)  new-car markets. 
C)  used-car markets. 
D)  direct financial market.

Question 3

One of the main services offered by investment banks to companies is:

Accepted Answer

A)  helping companies sell new debt or equity issues in the security markets. 
B)  making loans to companies. 
C)  taking deposits from companies. 
D)  all of the above. 
A)  helping companies sell new debt or equity issues in the security markets. 
B)  making loans to companies. 
C)  taking deposits from companies. 
D)  all of the above.

Question 4

The NYSE is an example of:

Accepted Answer

A)  an over-the-counter market exchange. 
B)  an organized exchange. 
C)  a commodities exchange. 
D)  all of the above. 
A)  an over-the-counter market exchange. 
B)  an organized exchange. 
C)  a commodities exchange. 
D)  all of the above.

Question 5

Business finance companies obtain the majority of their funds by selling equity.

Accepted Answer

A) True 
 B)False

Question 6

If a small business opts not to borrow funds from a commercial bank, then what will probably be its next best alternative?

Accepted Answer

A)  An insurance company. 
B)  A pension. 
C)  An investment fund. 
D)  A business finance company. 
A)  An insurance company. 
B)  A pension. 
C)  An investment fund. 
D)  A business finance company.

Question 7

Brokers are market specialists who do not bear risk of ownership of securities.

Accepted Answer

A) True 
 B)False

Question 8

Explain why secondary markets are so important to businesses that need to raise capital?

Accepted Answer

Secondary markets provide liquidity to t

Question 9

The ease with which a security can be sold and converted into cash is called:

Accepted Answer

A)  convertibility. 
B)  liquidity. 
C)  marketability. 
D)  none of the above. 
A)  convertibility. 
B)  liquidity. 
C)  marketability. 
D)  none of the above.

If the supply of loanable funds decreases relative to the demand for those funds, then we would expect:

Secondary financial markets are similar to:

One of the main services offered by investment banks to companies is:

The NYSE is an example of:

Business finance companies obtain the majority of their funds by selling equity.

If a small business opts not to borrow funds from a commercial bank, then what will probably be its next best alternative?

Brokers are market specialists who do not bear risk of ownership of securities.

Explain why secondary markets are so important to businesses that need to raise capital?

The ease with which a security can be sold and converted into cash is called:

The Financial Manager and the Firm

The Financial System and the Level of Interest Rates

Analyzing Financial Statements

The Time Value of Money

Discounted Cash Flows and Valuation

Risk and Return

Bond Valuation and the Structure of Interest Rates

Stock Valuation

The Fundamentals of Capital Budgeting

Cash Flows and Capital Budgeting

Evaluating Project Economics

The Cost of Capital

Working Capital Management

How Firms Raise Capital

Capital Structure Policy

Dividends, Stock Repurchases, and Payout Policy

Business Formation, Growth, and Valuation

Financial Planning and Managing Growth

Options and Corporate Finance

International Financial Management

Filters

Exam 2: The Financial System and the Level of Interest Rates

If the supply of loanable funds decreases relative to the demand for those funds, then we would expect:

Secondary financial markets are similar to:

One of the main services offered by investment banks to companies is:

The NYSE is an example of:

Business finance companies obtain the majority of their funds by selling equity.

If a small business opts not to borrow funds from a commercial bank, then what will probably be its next best alternative?

Brokers are market specialists who do not bear risk of ownership of securities.

Explain why secondary markets are so important to businesses that need to raise capital?

The ease with which a security can be sold and converted into cash is called:

The Financial Manager and the Firm

The Financial System and the Level of Interest Rates

Analyzing Financial Statements

The Time Value of Money

Discounted Cash Flows and Valuation

Risk and Return

Bond Valuation and the Structure of Interest Rates

Stock Valuation

The Fundamentals of Capital Budgeting

Cash Flows and Capital Budgeting

Evaluating Project Economics

The Cost of Capital

Working Capital Management

How Firms Raise Capital

Capital Structure Policy

Dividends, Stock Repurchases, and Payout Policy

Business Formation, Growth, and Valuation

Financial Planning and Managing Growth

Options and Corporate Finance

International Financial Management

Filters