Question Details

Which of the following is an example of a capital market instrument 


1.   Which of the following statements is most correct?

a.	While the distinctions are blurring, investment banks generally specialize in lending money, whereas commercial banks generally help companies raise capital from other parties.
b.	Money market mutual funds usually invest their money in a well-diversified portfolio of liquid common stocks.
c.	The NYSE operates as an auction market, whereas NASDAQ is an example of a dealer market.   
d.	Statements b and c are correct.

2.	Which of the following is an example of a capital market instrument?

a.	Commercial paper.
b.	Preferred stock.   
c.	U.S. Treasury bills.
d.	Banker- acceptances.

3.	Money markets are markets for

a.	Foreign currency exchange.
b.	Consumer automobile loans.
c.	Corporate stocks.
d.	Short-term debt securities.  

4.        Which of the following statements is CORRECT?

a.	The term "IPO" stands for Introductory Price Offered, and it is the price at which shares of a new company are offered to the public.
b.	IPO prices are generally established by the market, and buyers of the new stock must pay the price that prevails at the close of trading on the day the stock is offered to the public.
c.	In a "Dutch auction," investors who want to buy shares in an IPO submit bids indicating how many shares they want to buy and the price they are willing to pay.  The company determines how many shares it wants to sell.  The highest price that enables the company to sell the desired number of shares is the price that all buyers must pay.  
	d.	It is possible that the price set in an IPO is so high that investors will refuse to buy the number of shares that the company wants to sell.  In this situation, the IPO is said to be oversubscribed.

5.	Which of the following statements is NOT CORRECT?

a.	When a corporation's shares are owned by a few individuals, we say that the firm is "closely, or privately, held."
b.	"Going public" establishes a firm's true intrinsic value and ensures that a liquid market will always exist for the firm's shares.  
c.	The stock of publicly owned companies must generally be registered with and reported to a regulatory agency such as the SEC.
d.	When stock in a closely held corporation is offered to the public for the first time, the transaction is called "going public, or an IPO," and the market for such stock is called the new issue or IPO market.



Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help