Question 1

The Glass-Steagall Act was imposed to allow commercial and investment banks to combine and work together.

Accepted Answer

A) True 
 B)False

Question 2

Most businesses raise money by selling their securities in a

Accepted Answer

A)  public offering. 
B)  private placement. 
C)  direct placement. 
D)  stock exchange.

Question 3

In a ________ market, the buyer and seller are brought together to trade securities in an organization called ________.

Accepted Answer

A)  dealer; securities market 
B)  broker; over-the -counter market 
C)  broker; securities market 
D)  dealer; over-the-counter market

Question 4

In general, most corporate capital gains are taxed at ________ tax rate.

Accepted Answer

A)  a 46 percent 
B)  the ordinary 
C)  a 28 percent 
D)  a 30 percent

Question 5

A primary market is a financial market in which pre-owned securities are traded.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following serve as intermediaries channeling the savings of individuals, businesses and governments into loans and investments?

Accepted Answer

A)  Financial Institutions 
B)  Financial Markets 
C)  Securities Exchanges 
D)  OTC market

Question 7

The Glass-Steagall Act

Accepted Answer

A)  allowed commercial and investment banks to engage in the same activities. 
B)  created the Securities Exchange Commission. 
C)  created the Federal Deposit Insurance program and separated the activities of commercial and investment banks. 
D)  was intended to regulate the activities in the primary market.

Question 8

Sub-prime mortgages are mortgage loans made to borrowers the high incomes and better than average credit histories.

Accepted Answer

A) True 
 B)False

Question 9

Financial markets are intermediaries that channel the savings of individuals, businesses and government into loans or investments.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is NOT a financial institution?

Accepted Answer

A)  A commercial bank 
B)  An insurance company 
C)  A pension fund 
D)  A newspaper publisher

Question 11

Unlike the organized exchanges, the OTC makes a market in both outstanding securities and new public issues, making it both a secondary and a primary market.

Accepted Answer

A) True 
 B)False

Exam 2: The Financial Market Environment

The Glass-Steagall Act was imposed to allow commercial and investment banks to combine and work together.

Most businesses raise money by selling their securities in a

In a market, the buyer and seller are brought together to trade securities in an organization called .

In general, most corporate capital gains are taxed at ________ tax rate.

A primary market is a financial market in which pre-owned securities are traded.

Which of the following serve as intermediaries channeling the savings of individuals, businesses and governments into loans and investments?

The Glass-Steagall Act

Sub-prime mortgages are mortgage loans made to borrowers the high incomes and better than average credit histories.

Financial markets are intermediaries that channel the savings of individuals, businesses and government into loans or investments.

Which of the following is NOT a financial institution?

Unlike the organized exchanges, the OTC makes a market in both outstanding securities and new public issues, making it both a secondary and a primary market.