chapter 2

maher purchased 100 shares of Chill Pill Pharmacueticles at $30 per share last spring and sold them in six months for $36 per share. The stock paid no dividend. What was Maher's holding period of return

20%

although there was a financial crisis in 07-10, some firms were able to weather the crisis. these firms had all of the following characteristics which were directly responsible for their ability to survive the crisis except

a business model which encouraged risk taking by management that paid off

foreign currency forward and future options are contracts that reflect

a choice

emerging market

australia

An example of a listed security exchange within the secondary market is

NYSE

an exchange rate quoted as 1.47 per british pound is known as a __ quote

direct

in an economy as a whole, the actual savings for a given period of time must__ the actual investment

equal

ex post returns differ from __ returns in that they represent __ values rather than __ values

ex ante; actual; estimated

commercial banks are a major source of term loans. these loans are used for

financing current assets like inventory and accounts receivable

eurodollars are us dollars that have been deposited to

foreign banks and foreign branches of US banks

which of the following if a correct statement about foreign currency futures

future contracts are not liquid

net savers

households

financial assets are all of the following except

inventory

all of the following are anomalies that have impacted the financial market in the past except

investing in blue chip stock

the interest rate at which banks in the eurocurrency market lend to each other is known as the

london interbank offer rate

There are highly publicized hedge fund problems, for example Julian Robertson's Tiger fund or Long Term Capital Management. The impact that this has had on hedge funds is:

minimal. They have continued to grow in size and number

securities not listed on exchanges are said to be traded

over the counter

if the spot rate for japanese yen is .00703 and the 180 day forward rate is .00717 the yen trading is at a

premium

in the __ market the firm receives the proceeds from the sake of its securities

primary

with semi strong form of market efficiency no investor can expect to earn excess returns based on an investment strategy using any __ information

publicly available

the difference between the bid price and the ask price on a security is the

spread

the main purpose of an economy financial system is to facilitate the transfer of funds form

surplus spending units to deficit spending units

the main purpose of an economy financial system is to facilitate the transfer of funds from

surplus spending units to deficit spending units

the interest rate in the eurodollar market is related to

the LIBOR

financial intermediaries are compensated for their services by

the interest rate spread

there are many reasons why there was a financial crisis in 2007. The most significant event closely associated with this crisis is

the real estate bubble

a savings and loan association is an example of which type of financial intermediary

thrift institution

in an efficient capital market, corporate diversification is

unnecessary