answer please? Ensuring efficient use of a firm's working capital is:○ a.a treasury functionO b. No option is correct○ c. Labour management functiond. capital budgeting function○ e.a controller functionA secondary market:a. has brokers and dealers to facilitate tradingO b. allows traders to take the benefit of price discovery○ c. can take the form of a stock exchangeO d. increases liquidity among traded securitiesO e. All options are correct

Question 1: Answer: a). a treasury function Question 2: A secondary market: Answer: e). All options…

Answered: Ensuring efficient use of a firm's…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 3MCQ

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The sensitivity of a stock to market risk affected by currency movements is known as the a. value factor. b. net present value. c. exchange rate sensitivity. d. exchange risk beta. Which of the following types of risk is the most difficult to foresee? a. Economic b. Translation c. Transactions d. Consolidated The management of the direct resources that are involved in the production system of a business organization is known as a. procurement management. b. research and development. c. operations management. d. logistics management.
What is the difference between primary and secondary markets? 1. Primary markets help in capital formation, while secondary capital provides liquidity to the investor 2. Initial public offerings are undertaken in both primary and secondary markets 3. Stock exchanges are an example of secondary markets Select the correct answer using the codes given below:
Investment bankers perform which of the following role(s)? A. Provide advice to the firms as to market conditions, price, etc. B. Design securities with desirable properties C. Market new stock and bond issues for firms D. All of the options E. None of the options
Which investment below would be most appropriate for investors who need income? A. International stocks B. DOW Index Funf (DIA) C. Disney and Exxom Moble stocks D. Dividend Paying ETFs E. A, B, D are correct F. B,C,D are correct G. All of them are correct
Secondary Market can be best described in which of the following statement? a. It is a market for an unlisted company to raise equity capital. b. It is a market where securities are issued through private placement. c. It is a market in which short-term money market instruments such as Treasury bills are traded. d. It is a market in which preowned securities are traded.
Arbitrage traders rely on... Select one: a. .. superior earnings forecasts b. .. predictable relationships between the prices of two or more assets c. ... technical analysis d. All of the above
A fundamental analyst uses the discounted cashflow method to value firms, and has a short-term perspective on purchasing stocks and bonds. True or false?
The market's reaction to the announcement of a change in the firm's dividend payout is referred to as the:Question 25Answer A. information content effect. B. MM Proposition II. C. MM Proposition I. D. efficient markets hypothesis.
Give typing answer with explanation and conclusion
1. It is often said that equity in a geared company is like a call option. Explain how this works and what the option variables are in the company and how they affect the value of equity.
Which of the below statements does the MM Proposition I predict? A. In a perfect market, the value of a firm is independent of its capital structure B.In a perfect market, the discount rate depends on the capital structure C.In a perfect market, the value of a firm decreases in leverage D.In a perfect market, the NPY of investments depends on the existing debt/equity mix
The required rate of return of an investor is the rate of return that an investor demands to purchase a firm's stocks or bonds and thus provide funds for capital investment. Therefore, required returns from the investors' point of view correspond to the required returns or the weighted average cost of capital (WACC) from the firm's point of view. Indicate in the following table whether each of the statements about WACC and the required rates of return of investors is true or false. Statement True False The amount that an investor is willing to pay for a firm's stock is inversely related to the firm's cost of common equity before flotation costs. The firm's cost of debt is what an investor is willing to pay for the firm's stock before considering flotation costs. The amount that an investor is willing to pay for a firm's bonds is inversely related to the firm's cost of debt without considering the cost of issuing the bonds. The cost of retained earnings is the same as the cost of…

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