Question
1.
value:
1.00 points
MC Qu. 62 Which of the following statements concerning…
Which of the following statements concerning futures markets is false?
Futures markets allow investors to manage risk.
Futures markets can be used to hedge against changing commodity prices.
Interest rate futures can be used to hedge against the risk of rising interest rates.
All of the statements above are true.
2.
value:
1.00 points
MC Qu. 63 All of the following are recognized as an…
All of the following are recognized as an important influences in the development of the banking crisis of 2008 and the resulting credit crisis EXCEPT:
Too many subprime loans were repackaged and sold as securities.
The IMF bailed out Freddie Mac and Fannie Mae.
Real estate prices collapsed.
Consumers, especially homeowners, took on too much debt.
3.
value:
1.00 points
MC Qu. 65 Evidence of how global markets are linked…
Evidence of how global markets are linked was provided in 1997 and 1998 when international markets reacted to
the collapse of Asian currencies in Thailand, Indonesia, Malaysia and Korea.
Russia’s default on its sovereign debt.
Japan’s seven years of economic stagnation.
a and b are true.
4.
value:
1.00 points
MC Qu. 68 The European Monetary Union (EMU) which came…
The European Monetary Union (EMU) which came into effect in January of 1999 includes
Britain, France, Germany, Spain, Italy and 6 other European countries.
The establishment of a new European Central Bank to coordinate monetary policy for the Euro-zone countries.
A new currency called the Euro, which will be put into circulation in all EMU countries no later than 2009.
All of these.
5.
value:
1.00 points
MC Qu. 70 During the next ten years, the major threat …
During the next ten years, the major threat to the dominance of the U.S. money and capital markets will come from
The Euro-zone countries comprising the European Monetary Union and a single currency.
The huge Chinese economy and its billion plus people.
Japan’s prolonged recession and banking crisis.
Russia’s difficulty in transforming its economy into a capitalistic one.
6.
value:
1.00 points
MC Qu. 76 Corporations prefer bonds over preferred…
Corporations prefer bonds over preferred stock for financing their operations because
preferred stocks require a dividend.
bond interest rates change with the economy while stock dividends remain constant.
the after-tax cost of debt is less than the cost of preferred stock.
none of these.
7
MC Qu. 77 In general when interest rates are expected …
In general when interest rates are expected to rise, financial managers
balance the company’s debt structure with more short-term debt and less long-term debt.
rely more on internal sources of funds rather than external sources.
try to lock in long-term financing at low cost.
accept more risk.
8
MC Qu. 80 The major supplier of funds for investment…
The major supplier of funds for investment in the whole economy is
businesses.
financial institutions.
households.
government.
9
MC Qu. 92 Security markets are efficient when each of …
Security markets are efficient when each of the following exist except
the markets can absorb large dollar amounts of stock without destabilizing the price.
prices adjust rapidly to new information.
there is a continuous market where each successive trade is made at a price close to the previous trade.
security prices follow the leading indicators such as the DJIA very closely.
10
MC Qu. 97 The strong form of the efficient market…
The strong form of the efficient market hypothesis states that
past price data is positively correlated to future prices.
prices reflect all public information.
all information both public and private is immediately reflected in stock prices.
none of these
11.
value:
1.00 points
MC Qu. 98 The Securities Act of 1933 is primarily…
The Securities Act of 1933 is primarily concerned with
original issues of securities.
protecting customers of bankrupt securities firms.
secondary trading of securities.
national securities market.
12
MC Qu. 99 The Securities Act of 1933 did not
The Securities Act of 1933 did not
require that all securities sold in more than one state be registered with the SEC.
set guidelines for insiders who trade in the securities of their own firm.
require a prospectus for all new issues of securities which contains all information appearing in the registration statement.
hold corporate officers liable for losses for those who were misled by false information in the prospectus.
13
MC Qu. 101 The Securities Exchange Act of 1934 is…
The Securities Exchange Act of 1934 is primarily concerned with
original issues of securities.
a central market system.
regulation of organized exchanges.
protecting customers of bankrupt securities firms.