Term
| A key variable of market efficiency is the certainty of the income stream. The most efficient market is for corporate securities. |
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Term
| The weak form of the efficient market hypothesis states that an investor can profit by using past price data. |
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| The Sarbanes- Oxley Act of 2002 holds the CFO legally accountable for the accuracy of their firms financial statements. |
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Term
Which of the following Statements concerning futures markets is false?
1.) Futures markets allow investors to manage risk.
2.) Futures markets can be used to hedge against changing commodity prices.
3) Interest rates futures can be used to hedge against the risk of rising interest rates.
4.) All of the statements above are true |
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Definition
| 4.)All statements are true |
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Term
All of the following are recognized as an important influences in the development of the banking crisis of 2008 and the resulting credit crisis EXCEPT:
1.) Consumers, especially homeowners, took on too much debt.
2.) Real estate prices collapsed
3.) Too many subprime loans were repackaged and sold as securities
4.) The IMF bailed out Freddie MAc and Fannie Mae. |
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Definition
| 4.) The IMF bailed out Freddie Mac and Fannie Mae. |
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Term
| The formation of the European Monetary Union and its single currency Euro is expected to: |
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Definition
Eliminate foreign currency risk between its member countries.
create stock and bond prices denominated in Euros.
have stock and bond indexes tracking a combined group of common stocks and bonds from the member countries
Answer: All of these |
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Term
| Companies list their stock prices around the globe to: |
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Definition
Increase liquidity for their stockholders
provide opportunities for the sale of new stock in foreign countries.
b and c |
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Term
| The purpose of secondary trading is to: |
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Definition
| provide liquidity and competition between investments. |
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Term
| Which of the following is not a criterion for an efficient market? |
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Definition
| Computerized handling of transactions |
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Term
| The strong form f the efficient market hypothesis states that |
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Definition
| All information both public and private is immediately reflected in stock prices. |
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Term
| The securities exchange act of 1934 is primarily concerned with: |
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Definition
| regulation of organized exchanges. |
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Term
| Capital Markets consist of securities having maturities greater than one year. |
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Definition
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Term
| U.S Government agency securites are directly guaranteed by the full faith and credit of the U.S. Treasury. |
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Definition
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Term
| In the new issues market for corporate capital, common stocks account for the largest percentage of new funds raised. |
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Definition
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Term
| The capital markets serve as a way of allocating available capital to the most efficient user. |
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Term
| When an investor buys stock in the stock market, he is purchasing shares from a company. |
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Term
| Securities issued by state and municipalities are referred to as statutory bonds and municipal bonds, respectively. |
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Definition
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Term
| Brokers actually own the securities they buy and sell on the floor of the exchange |
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