Which of the following statements is CORRECT? O a. The NYSE is an example of an over-the-counter market. O b. Only institutions, and not individuals, can engage in derivative market transactions. O c.If you purchase 100 shares of Disney stock from your brother-in-law, this is an example of a primary market transaction. O d. As they are generally defined, money market transactions involve debt securities with maturities of less than one year. O e. If Disney issues additional shares of common stock through an investment banker, this would be a secondary market transaction.

Which of the following statements is CORRECT? O a. The NYSE is an example of an over-the-counter market. O b. Only institutions, and not individuals, can engage in derivative market transactions. O c.If you purchase 100 shares of Disney stock from your brother-in-law, this is an example of a primary market transaction. O d. As they are generally defined, money market transactions involve debt securities with maturities of less than one year. O e. If Disney issues additional shares of common stock through an investment banker, this would be a secondary market transaction.

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

See similar textbooks

Similar questions

Which of the following are typical negotiable certificate of deposit (NCD) denominations? Check all that apply. $300,000 $500,000 $1,000,000 $5,000,000 Which of the following are characteristics of negotiable certificates of deposit (NCD)? Check all that apply. Firms are the most common direct investors in these securities. They provide a return in the form of interest along with the difference between the secondary market selling price and the original purchase price. Activity in their secondary market is low. Their denominations are typically in multiples of $100,000. Suppose Larry purchased an NCD a year ago on the secondary market for $991,000 and redeems it today upon maturity for $1,000,000 plus $44,000 in interest. The annualized yield on this NCD is: 4.81% 5.19% 5.35% 5.78%
4. Why would the company redeem the bonds prior to the maturity date if they weregoing to recognize a loss? Can you think of an example of such a decision we might facein our personal lives?5. The 10-year German and Japanese government bonds have recently traded at anegative yield (market rate of interest)! Why would an investor purchase a bond that,in effect, pays a negative interest rate?!
12) Which of the following is NOT a property of Financial assets? A. Divisibility B. Reversibility C. Convertibility D. Marketability 13) Which of the following security is issued in money market: A. Common stock B. Preferred stock C. Bankers acceptance D. Commercial bonds 14) The money market is used to issue securities that maturity in: A. One year B. Two years C. Three years D. Four years 15) The capital market is used to issue securities that maturity in: A. 3 months B. 6 months C. 9 months D. 15 months 16) All the following factors contribute to the integration of the financial market: A. Liberalization B. Technology C. Institutionalization D. Democratization 17) Which money market instrument is infrequently traded in the Secondary Market: A. Treasury bills B. Commercial paper C. Certificate of deposit D. Repurchase agreement
You enter into a "reverse repo" transaction meaning that the counterparty delivers some securities (let's say t-bonds) to you and borrows from you. According to the agreement, you lend 25.000 TL for 20 days with an annual repo yield of 8%. However, suppose that you immediately needed urgent liquidity. You decided to enter into a "repo" transaction now with another party by using the t- bonds of the reverse repo counterparty. This new agreement allows you to borrow 20.000 TL for 8 days with an annual repo yield of 6%. What would be the total profit at the maturity of the "repo" transaction? (1 year = 360 days)
A) Which of the following is not the function of the secondary market Select one: a. Marketability to securities b. Liquidity of securities c. None of these d. It gurantees fixed rate of return to the investor B) Which of the following are short-term financial instruments? Select one: a. Share of Rysut cement b. None of these c. A bond with five years maturity d. A banker’s acceptance C) money market does not have any role in the development of capital market a. True b. False
Fixed-income securities consist of debt instruments and preferred stock. Bonds are debt securities in which a borrower promises to pay a specified interest rate and principal at a future date. Which of the following types of bonds have the least default risk? Municipal bonds Corporate bonds Treasury bonds Based on the information given in the following statement, answer the questions that follow: In July 2009, Hungary successfully issued 1 billion euros in bonds. The transaction was managed by Citigroup. Who is the issuer of the bonds? Citigroup The Hungarian government Hungary Bank What type of bonds are these? Government bonds Corporate bonds Municipal bonds
True or false I. Floating/ variable rate bonds is one in which the interest payment changes with the market conditions. II. Junk or low rated bonds are rated BB or below.III. Eurobonds are bonds payable or denominated in the borrower’s currency, but sold outside the country of the borrower, usually by an international syndicate of investment bankers. IV. Treasury bonds carry the “full-faith-and-credit” backing of the government and investors consider them among the safest fixed-income investments in the world.
Which statement is FALSE regarding bonds?Select one:The pay back their face value within their maturity.They can be traded on secondary markets. Entitles its holder for cash inflows.When issued they increase the equity of the firm.
Moving to another question will save this response. Quèstion 3 For each of the following definition select the correct term Definition Term A time draft payable to a seller of goods, with payment guaranteed by a bank Give bond holders the opportunity to purchase common stock at a prespecified price Government-issued foreign currency-denominated debt Option that can be exercised at any time before (and on) the expiration date Hybrid security that has characteristics of both bonds and common stock The risk that depositors will demand more cash than banks can immediately provide
If bonds payable are not callable, the issuing corporation a.can exchange them for common stock b.can repurchase them in the open market c.is more likely to repurchase them if the interest rates increase d.must get special permission from the SEC to repurchase them
46. One of the points below is the most accurate?a. After a company files for bankruptcy, the administrator liquidates it, using the money to compensate bondholders, overdue salaries, royalties, and legal fees.b. Where the price of the bond approaches the sinking fund call price, a company with a sinking fund payout due will typically opt to purchase back bonds on the open market.c. Income bonds incur dividends only after the amount of interest received by the corporation is directly earned. As a result, these securities cannot default a corporation, making them better for investors than traditional bonds.d. One drawback to zero coupon bonds being that the tax gains from selling securities are not realised before the bonds maturity.e. Callable bonds should have a lower yield to maturity than noncallable bonds, assuming all other factors remain stable.
1. Anton wants to have a portion of ownership of a certain company. Which of the following should he invest? A. Annuity B. Bonds C. Shares D. Stocks 2. What writtwn contract is exhibited by a debtor that is legally binding which stipulates the amount borrowed at a specified tine in the future? A. Stocks B. Annuity C. Amortization D. Bonds 3. Which of the following covers when the frequency of the regular payment is different from the frequency of interest conversion? A. Bonds B. Ammortilation C. General annuity D. Simple annuity 4. What term is refers to the type of arrangement where composition is important but not order? A. Courting B. Permutation C. Multiplication rulw D. Combination 5. If p q is a tautology, then what can you inter about p and q? A. P and Q are either true or false but not both B. P and Q are always false C. P and Q are always true D. P and Q are either both true or false both false

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS