Description
Test Bank For Practical Financial Management 8th Edition by William R. Lasher
1. Which financial institution is not involved in the indirect method of financial intermediation?
a. Banks
b. Investment bankers
c. Mutual funds
d. Pension funds
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FINA.LASH.17.05.01 – The Financial System
NATIONAL STANDARDS: BUSPROG: Analytic – BUSPROG: Analytic skills: Statistics and Management Science
TOPICS: The Financial System
KEYWORDS: Bloom’s: Knowledge
DATE CREATED: 5/26/2015 8:57 AM
DATE MODIFIED: 7/8/2015 10:22 AM
2. Which of the following is not considered to be an institutional investor?
a. Governments
b. Pension funds
c. Insurance companies
d. Mutual funds
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FINA.LASH.17.05.01 – The Financial System
NATIONAL STANDARDS: BUSPROG: Analytic – BUSPROG: Analytic skills: Statistics and Management Science
TOPICS: The Financial System
KEYWORDS: Bloom’s: Knowledge
DATE CREATED: 5/26/2015 8:57 AM
DATE MODIFIED: 7/8/2015 10:22 AM
3. Typically debt financing can be either short- or long-term, whereas equity financing is almost always long-term, the word “term” meaning:
a. the time between a security’s issue and its retirement.
b. the duration specified on all debt and equity securities.
c. the amount of time necessary to realize the required return on the investment.
d. All of the above
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FINA.LASH.17.05.01 – The Financial System
NATIONAL STANDARDS: BUSPROG: Analytic – BUSPROG: Analytic skills: Statistics and Management Science
TOPICS: The Financial System
KEYWORDS: Bloom’s: Knowledge
DATE CREATED: 5/26/2015 8:57 AM
DATE MODIFIED: 7/8/2015 10:23 AM
4. The term of an investment can be described as either:
a. long or short, long-term meaning any duration longer than five years.
b. intermediate or short, intermediate being any duration longer than one year.
c. long, intermediate, or short, intermediate being any duration longer than one year but shorter than five years.
d. None of the above
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FINA.LASH.17.05.01 – The Financial System
NATIONAL STANDARDS: BUSPROG: Analytic – BUSPROG: Analytic skills: Statistics and Management Science
TOPICS: The Financial System
KEYWORDS: Bloom’s: Knowledge
DATE CREATED: 5/26/2015 8:57 AM
DATE MODIFIED: 7/8/2015 10:27 AM
5. The principal differences between capital markets and money markets are that:
a. money and capital markets deal in the same securities, the only difference is term.
b. both markets deal in short-term debt securities; however, capital markets deal also in equity securities which have an indefinite term.
c. money markets deal only in short-term government debt.
d. capital markets deal in long-term debt and equity securities, while money markets deal only in short-term debt.
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FINA.LASH.17.05.01 – The Financial System
NATIONAL STANDARDS: BUSPROG: Analytic – BUSPROG: Analytic skills: Statistics and Management Science
TOPICS: The Financial System
KEYWORDS: Bloom’s: Knowledge
DATE CREATED: 5/26/2015 8:57 AM
DATE MODIFIED: 7/8/2015 10:28 AM
6. Which of the following is/are a primary market transaction(s)?
a. A company issues new stock.
b. A company issues new bonds.
c. An investor asks his broker to purchase 1,000 shares of Microsoft common stock from another stockholder.
d. All of the above
e. a. and b.
ANSWER: e
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FINA.LASH.17.05.01 – The Financial System
NATIONAL STANDARDS: BUSPROG: Analytic – BUSPROG: Analytic skills: Statistics and Management Science
TOPICS: The Financial System
KEYWORDS: Bloom’s: Knowledge
DATE CREATED: 5/26/2015 8:57 AM
DATE MODIFIED: 7/8/2015 10:29 AM
7. The primary function of financial markets is to:
a. ensure that interest and dividend payments are made to stockholders and bondholders.
b. facilitate the payment for goods and services between producers and consumers.
c. facilitate the movement of cash from savers to companies that need money.
d. financial markets perform all of these functions.
ANSWER: c
POINTS: 1
DIFFICULTY: Moderate
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FINA.LASH.17.05.01 – The Financial System
NATIONAL STANDARDS: BUSPROG: Analytic – BUSPROG: Analytic skills: Statistics and Management Science
TOPICS: The Financial System
KEYWORDS: Bloom’s: Knowledge
DATE CREATED: 5/26/2015 8:57 AM
DATE MODIFIED: 7/8/2015 10:31 AM
8. Which of the following best describes the concept of maturity matching?
a. Companies use funds from selling stocks to fund long-term projects and funds from selling bonds to fund short-term projects.
b. Companies try to match the term of a project with the maturity of the financing that pays for it.
c. Companies use funds from selling bonds to fund long-term projects and funds from selling stocks to fund short-term projects.
d. Companies always use bonds to finance both short- and long-term projects because stocks have no maturity and therefore cannot be matched to the length of projects.
e. None of the above describes the concept of maturity matching.
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FINA.LASH.17.05.01 – The Financial System
NATIONAL STANDARDS: BUSPROG: Analytic – BUSPROG: Analytic skills: Statistics and Management Science
TOPICS: The Financial System
KEYWORDS: Bloom’s: Knowledge
DATE CREATED: 5/26/2015 8:57 AM
DATE MODIFIED: 7/8/2015 10:31 AM
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