hich of the following is correct?   Transactions within the spot market can be used to mitigate and hedge risk.   In an efficient market, it is not possible that a stock of the firm has a price equal to its intrinsic value. Index funds are funds that reflect the performance of a specific index   An example of an indirect transfer of capital through investment banks is when an investor buys a unit of a fund from a bank that is invested in various financial assets such as bonds and stocks of

Q: True or False In perfect capital markets, with no taxes or other market imperfections, investors…

A: Perfect capital market is a market place where there is a large number of buyers and sellers and no…

Q: Hedge funds are known for generating higher returns. Discuss the investment strategies that are…

A: Hegde funds can be defined as those funds which collects money from the investors and then use that…

Q: Which of the following statements about diversification is INCORRECT? A) Diversification is…

A: Diversification is used as a strategy to manage risks.

Q: Which of the following statements is most correct? Semi-strong form market efficiency implies that…

A: There are there forms of market strong market,semi strong market HYPOTHESIS and weak form of market…

Q: In a strong-form efficient market, accounting announcements: will impact stock price only if it…

A: Stock price can be defined as the monetary value of a stock at which the stock is traded in the…

Q: This question relates to the two types of risk and to diversification. a)What is specific risk?…

A: As per our guidelines, we are supposed to answer only 3 sub-parts (if there are multiple sub-parts…

Q: “The Capital Asset Pricing Model [CAPM] assumes that the stock market is dominated by…

A: I do not completely agree with the following statement because Capital Asset pricing model is only…

Q: Answer the following independent questions: a) Explain why international stock might have high…

A: As per company policy, it is only possible to solve one question.

Q: One apparent violation of the Law on One Price is the pervasive discrepancy between the prices and…

A: Law on price is based on one price concept in the whole market. It means security should be…

Q: Exchange-traded funds are popular investments that are easy to sell and have the potential to earn…

A: Exchange-traded funds are those that offer comparable risk and return and track a certain exchange…

Q: We understand that the market will be inefficient at times, and we can try to beat the market by…

A: Dividends are the distribution of a portion of a company's earnings to its shareholder class, as…

Q: To capture investor interest, Exchange Traded Funds (ETF) have become the latest market innovation.…

A:

Q: which of the following statements about trading risk is correct? it is easily identified by careful…

A: Trading risk refers to the risk that loss may occur as the chosen investment may not reach the…

Q: Studies or data on mutual performance versus a market index f

A: The answer is:- C) most mutual funds underperform the index.These findings support the semi-strong…

Q: According to the efficient market, which of the following are not true? Select one: O the market has…

A: The Efficient-market hypothesis also known as EMH is a hypothesis in finance which states that…

Q: What factors can you think of that might explain why U.S. stock markets are more efficient (i.e.,…

A: The stock market refers to the place where the shares of the various public listed companies are…

Q: Ñ3

A: Mutual funds is a trust that pool together the savings or money from large number of small investors…

Q: hedge

A: Introduction: The term hedging refers to a strategy used by the investors in order to protect…

Q: hedge

A: “Since you have posted a question with multiple sub-parts, we will solve the first three subparts…

Q: Why do firms generally prefer to borrow funds to obtain long-term financing rather than issue shares…

A: When a firm or company needs capital to grow or start a new project then it uses debt or equity or…

Q: Market timers focus onusing overall market trends as a basis for predicting when to buy or sell…

A: Fundamental Analysis deals with analysing the financial statements and reports of the company. It…

Q: Which are The very different patterns of cash flows on the securities which just described raise…

A: Capital budgeting is vital in marketing decisions. Decisions on investment, which take time to…

Q: Which of the following are the MAIN REASONS for an investor to invest in managed funds? I -  To…

A: Answer: The correct answer is Option (A) I, II and III only. A managed fund is nothing but a pooling…

Q: Which of the following is correct   a. In a leveraged recapitalization, a firm uses its excess…

A: Leveraged Buyouts  is the process of buying another company using money from outside sources, such…

Q: Which of the following statements regarding ETF is incorrect? Select one: O a. ETFS are open-ended…

A: An exchange traded fund, which is commonly known as ETF, which is referred as the kind of the…

Q: With respect to hedge fund investing, the net return to an investor in a fund of funds would be…

A: The net return to an investor in a fund of funds would be lower than that earned from an individual…

Q: The following statements relate to long-term financing. Which is true? a. The risk on any type of…

A: Long term financing Long term financing is a financing that has the maturity more than a year.

Q: assuming that the stock market is efficient which of the following statements is correct? A.…

A: Efficient market hypothesis is based on the concept that the  share prices of company  reflect all…

Q: Which of the following statement are true?   Direct transfer of capital involves the aid of…

A: The answer for the multiple choice question and relevant explanation are presented hereunder : There…

Q: Do you agree with the following statement? And explain why. “The Capital Asset Pricing Model [CAPM]…

A: The Capital Asset Pricing model is used to price securities based on its systematic risk. It…

Q: Which of the following statements concerning the Efficient Market Hypothesis is correct? Select…

A: Share prices, according to the efficient market hypothesis represents all the information available…

Q: What are the implications of the efficient market hypothesis for investors who buy and sell stocks…

A: The efficient market hypothesis or efficient market hypothesis is also known as the random walk…

Q: “If markets are semistrong-form efficient, investors would only adopt passive investment strategies…

A: The Efficient Market Hypothesis (EMH) describes a stock market that is both operationally and…

Q: Common stocks that are traded on the NYSE are liquid in the sense that they canbe sold and converted…

A: Marketable securities are securities that are highly liquid securities which can be converted into…

Q: Which of the following is most accurate in describing the problems of survivorship bias and backfill…

A: Hedge funds invest in high risk securities and derivative instruments. Hedge funds adopt aggressive…

Q: How does a cost-efficient capital market help reduce the prices of goods and services? Describe the…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: You buy a stock from the capital market. If the capital market is semi-strong efficient, which of…

A: When the capital market is semi strong efficient then it means that in the market the share prices…

Q: ch of the following defines a hedge fund the most?  1. A collective investment model based on…

A: Hedge fund is larger pool of investment that are collected from large number of investors and…

Q: The market risk premium is defined as __________. A. the difference between the return on an index…

A: Market Risk Premium refers to the additional or extra amount of return which an investor earned by…

Q: Explain whether the following statements are true or false.a. Derivative transactions are designed…

A: Answer:   A. FALSE Derivative transactions are designed to decrease risk or for the purpose of…

Q: Diversification occurs when stocks with low correlations of returns are placed together in a…

A: Correlation is a statistical measure of relationship or interdependency between two variables. The…

Functions of Financial Institutions

Financial institutions are businesses that are formed to deal with financial and monetary transactions. These organizations primarily accept deposits, advance loans, make investments, and provide foreign exchange services. Financial institutions include, but are not limited to, banks, insurance companies, trust companies, brokerage firms, and investment bankers. Because financial institutions play such an important role in the economy in terms of monetary transactions, regulating their activities has become a requirement for governmental authorities. As a result, the government creates a multitude of laws and regulations to oversee the activities of financial institutions.