18- which of the statements given below is false? Please select one; a) a financial intermediary borrows funds from people who have saved b) in a bull market stock prices are rising on average c) interest rates can be accurately described as the rental price of money d) a stock is a debt security that promises to make periodic payments for a specific period of time e) banks are financial intermediaries that accept deposits and make loans

18- which of the statements given below is false? Please select one; a) a financial intermediary borrows funds from people who have saved b) in a bull market stock prices are rising on average c) interest rates can be accurately described as the rental price of money d) a stock is a debt security that promises to make periodic payments for a specific period of time e) banks are financial intermediaries that accept deposits and make loans

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Page 6 of 14 d) State True or False for each of the following statements (: o Every financial market allows loans to be made. An example of direct financing is if you were to lend money to your neighbour. The New York Stock Exchange is an example of a primary market. Commercial paper is not traded in the capital market. Eurodollars are traded in the money market. The process of financial intermediation is also known as direct finance. A mutual fund is not a depository institution. A pension fund is not a contractual savings institution. Activate Window Go to Settings to activa Hide screen. Stop sharing D Focus | 国尾

Which is correct about financial securities? a. Financial securities guarantees return to investors. b. Financial securities eliminate risk that most financial managers are facing. c. Diversification spreads risk and improves expected total return. d. Financial securities protect investors against risk shocks brought by social, economic, and political events. e. All of the above f. None of the above Which is correct about debt securities? a. Debt securities make the holders owners and give them the right to vote in all matters of the firm. b. Debt securities give the holders the right to receive interest and dividends. c. Debt securities give the holders the right to be elected as board of directors or to vote them. d. Debt securities give the holders the right to convert them into stocks if the indenture states. e. All of the above f. None of the above.
D3 These statements are True or False? Please explain. 1. The role performed by banks in which thay stand behind their customers when those customers are unable to pay a debt obligation is known as the discounting valuable paper role. 2. Collaterals should be considered as the primary resource to pay off the loans
Interest Select one: a. The profits made on investments b. Buying and selling stocks or shares for clients c. Unable to pay debts or continue to do business d. The price for borrowing money, paid to the lenders
Nonbank financial institutions do not earn the interest on reserves (IOR) rate. a. True b. False
How should a bank structure its liquid assets portfolio to take advantage of falling interest rates ? a. The bank should invest in short-term securities to minimise capital loss b. The bank should invest in long term securities to maximise capital gains. c. The bank should borrow at fixed interest rates d. The bank should issue certificate deposits with fixed interest rates. e. The bank should hold cash to maximise its interest income. Which option is correct
7- which of the statements given below is true? Please select one; a) every financial market allows loans to be made b) The New York Stock Exchange is an example of a primary market c) the capital market is a financial market in which only short term debt instruments (generally those with an original maturity of less than one year) are traded d) a pansion fund is not a contractual savings instution e) in the US financial intermediaries are restricted in what they are allowed to do and what assets m m they can hold
Which of the following is NOT an advantage of depositing funds into a bank account (compared to directly purchasing corporate bonds and shares): Options 1. Higher transactions costs 2. Monitoring performed by the bank on behalf of the depositor 3. Better liquidity if funds are needed quickly 4. Efficient payment services 5.Reduced price risk if funds are needed immediately
19. _____________ are the financial intermediaries between those who have surplus money and those who need money. a. Financial markets b. Public institutions c. None of the options d. Private firms
What is the SUBPRIME crisis What is a SUBPRIME credit How the Subprime crisis has been transferred to the financial system and the markets What a lesson the fall of Lehman leaves. Establish 05 conclusions about the case and compare it with the economic crisis of the covid
The central bank takes action that lowers interest rates dramatically. what is the effect of it to firm value? increase or decrease and why.
Which of the following will have the same effect on money supply as raising the reserve requirement? a) The central bank decreases the interest rate. b) The central bank purchases bonds in the market. c) The central bank purchases securities and debentures in the market. d) Lower bond prices.

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