Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 1, Problem 19PS
Give an examp1e of three financial intermediaries, and explain how they act as a bridge between small investors and large capital markets or corporations. (LO 1-5)
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Who are the three (3) players who interact in the financial markets? Describe each and give examples.
Hh2.
1 Which of the following is least likely to be a financial intermediary?
A. Finance companies 8, Mutual funds C. Pension funds D. Investment banks E. Savings banks
2 Which of the following do not have corporate stock ownership?
A. Commercial banks B. Savings and loan associations C. Savings banks
D. Credit uniong O All of the above
3. A financial institution that raises funds by issuing shares to the public and invests the proceeds in a
diversified portfolo for a management fee is:
A. Banks B. Pension FundyC)Mutual Funds D. Financn companies E. None of the above
- 4. One of the following types of financial instruments derive their value from other instruments
(underlying assets)
A. Cash instruments
B. Equity instruments
O Derivative instruments
D. Debt instruments
Chapter 1 Solutions
Essentials Of Investments
Ch. 1 - Prob. 1PSCh. 1 - Prob. 2PSCh. 1 - Prob. 3PSCh. 1 - Prob. 4PSCh. 1 - Prob. 5PSCh. 1 - Prob. 6PSCh. 1 - For each transaction, identify the real and/or...Ch. 1 - Prob. 8PSCh. 1 - Lanni Products is u start-.up computer software...Ch. 1 - Reconsider Lanni Products from Problem 9. (LO 1-2)...
Ch. 1 - Prob. 11PSCh. 1 - Examine the balance sheet of commercial banks in...Ch. 1 - Prob. 13PSCh. 1 - Prob. 14PSCh. 1 - Prob. 15PSCh. 1 - Prob. 16PSCh. 1 - Why would you expect securitization o take place...Ch. 1 - Prob. 18PSCh. 1 - Give an examp1e of three financial intermediaries,...Ch. 1 - Firms raise capital from investors by issuing...Ch. 1 - The average rate of return on investments in large...Ch. 1 - Prob. 22PSCh. 1 - Prob. 1WMCh. 1 - Prob. 2WMCh. 1 - Prob. 3WMCh. 1 - Prob. 4WM
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- Investors and creditors use many different kinds of information before supplying capital to businesses like Target. Which type of information they access?arrow_forwardAccounting Write two types of financial institutions and explain about them?arrow_forward1. Which of the following is a function of every financial market? A) It determines the level of interest rates. B) It allows common stock to be traded. C) It allows loans to be made. D) It channels funds from lenders-savers to borrowers-spenders. 2. Securities are for the person who purchases them, but they are for the person/firm who sells them. A) assets; liabilities B) liabilities; assets C) income; liabilities D) liabilities; expenses 3. Which of the following is/are money market instrument(s)? A) Negotiable certificates of deposits B) Common stock C) T-bonds D) 4-year maturity corporate bond 4. Who has voting rights at a shareholders' meeting? A) All common stock owners. B) Common stock owners who own more than 1% of the company. C) Only the company's managers. D) All preferred stock owners. 5. These are investments where shareholders become the owners of the portfolio of the account. These portfolios of securities could be made up of equity securities or debt securities. A)…arrow_forward
- There are 4 main ways that businesses raise financial capital: 1. Early-stage capital 2. Profits 3. Bonds 4. Stocks Which one do you think is the best approach to employ and why?arrow_forwardWhich of the following represent sources of funds to a firm: A. Creditors B. Investors C. Profitable Operations D. All of the Abovearrow_forwardsarrow_forward
- 7.) Describe the debt and equity markets? How do organizations obtain financing from each market? What are the costs involved with obtaining financing in each market? What are some considerations a entity might consider before choosing which market to raise capital?arrow_forwardAs a micro-enterprise, which sets of financing are the most likely to be used? *A. Banks and venture capitalistsB. Tax holidays and leasesC. Retained earnings and convertible securitiesD. Public issuance of equity and debtarrow_forwardIndicate whether the following statement is true or false. Provide the relevant explanations. The higher the proportion of equity in a company’s overall capital structure, the higher return required by its debtholders. (Explain your reasoning – in your explanation, provide a numerical example supporting your answer.)arrow_forward
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