Which of the following is not a security? Select one: A term loan Investment grade bonds High yield bonds Commercial paper Which of the following statements about investing in government bonds is most likely true? Select one: Neither pensioners nor young professionals are likely to invest in government bonds Pensioners and young professionals are equally happy to invest in government bonds A pensioner is less likely to invest in government bonds than a young professional A pensioner is more likely to invest in government bonds than a young professional Which of the following statements about IPOs is not correct? Select one: In an IPO the company might raise new capital An IPO gives access to more liquid markets when it comes to raising capital for the company An IPO can take place in the secondary market or the primary market, but the primary market is better In an IPO existing shareholders might sell some of their shares Which of the following statements about trading venues is correct? Select one: Dark pools are more attractive for investors wishing to place large orders Dark pools have the advantage of showing other market participants the volume of shares being bought or sold A company can only list on a single stock exchange Dark pools are traditionally the most common trading venue Which of the following statements about equity vs debt is correct? Select one: Mature companies tend to be cash flow negative Mature companies can better support debt than start up companies Start up / growth companies tend to be mostly debt financed Mature companies are usually more high risk than start up companies
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Which of these statements is false? Bonds are always less risky than stocks. The bond market is larger than the stock market. Some bonds offer high potential for rewards and, consequently, higher risk. Bonds are more important capital sources than stocks for companies and governments.
Adi S.
1. Determine the expected return of the asset using the following information: - Yield on long-term government bond: 1.85% - Yield on corporate bond: 2.35% - Average annualized market return: 6.45% - The beta of the asset is 0.5 4.15% 6.07878% 3.75% 4.4% 2. Why would an investor pay a premium for voting rights on their common shares? Select one or more correct answers. Lower risk Influence corporate policy changes Less capital gains tax Higher return 3. Why would an investor purchase securities over-the-counter (OTC) instead of through a public stock exchange? Select one or multiple correct answers. Safer companies Less public information Access unlisted securities Larger companies 4. Company A has 36.88 million shares outstanding trading at $2.78 each (the same shares were $3.11 last week). Company B has 126.15 million shares outstanding trading at $11.42 (the same shares were $11.21 last week). What market cap size are the two companies considered? Company A is micro cap, Company B is large cap Company A is small cap, Company B is mega cap Company A is small cap, Company B is small cap Company A is micro cap, Company B is small cap
Madhur L.
Which of the following is not an action that a company's management team can take to help meet or beat the investor-expected targets for ROE in upcoming years? - Borrowing money from the Global Community Bank (preferably in the form of a 1-year loan that can be fully or mostly repaid the following year and using the proceeds to repurchase outstanding shares of common stock; such action makes considerable financial sense when the company's stock price is expected to rise substantially in future years and/or when unexpectedly weak company performance in the prior year causes a drop in its stock price. - Increasing annual dividend payments to shareholders (because all net profits not paid out as dividends are treated as retained earnings—which increases shareholders' equity—and thus lowers a company's ROE below what it would otherwise be if the company's dividend was higher). - Pursuing efforts to boost total operating profits in all four geographic regions—the resulting growth in operating profits companywide will increase total net profits and help increase ROE (a company's net profits are the numerator in calculating the company's ROE). - Making it standard company practice always to issue new shares of common stock each. - Using a portion of the company's internal cash flows from operations for the next several years to repurchase shares of common stock.
Akash M.
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