Financial Markets Week 6

Why was the Glass-Steagall Act of 1933 repealed in 1999

american banks claimed that it made it hard to compete with european banks which offered both investment and commercial banking services

How to local governments typically make use of the money generated by municipal bond issues?

municipalities use the money to finance public work projects

what where the two biggest assets of the average (not median) us household in 2015

real estate and pension funds

why do underwriters usually underprice IPO's

they want to create public excitement

which is not a feature that Charles Ellis believed made goldman sachs successful 1) becoming prestigious 2)Making money 3) loyalty to the firm 4)Personal anonymity

1 becoming prestigious

which of the following is Not True of mutual funds 1) mutual funds are closed end funds 2) massachusetts investment trust was an early model for mutual funds in the us 3) you join the fund at 4 pm on the day you decide to invest 4) they are defined and regulated by the SEC

1 mutual funds are closed end funds

two deals that under writers make with corporations

1) tires to sell shares at some price and the deal collapses if they don't 2) The underwriter will buy all unsold shares

The social insurance system in the US is commonly referred to as the OASDI what kinds of insurance dose this abbreviation encompass ( check all that apply) 1) asset insurance 2) Disability insurance 3) old age insurance 4) survivors insurance

2) Disability insurance 3) old age insurance 4) survivors insurance

some of carmen Reinhart's historical findings on sovereign defaults 1) governments who cannot repay their creditors often tend to repudiate their sovereign debt contracts 2) governments have rarely repudiated their sovereign debt contracts 3) it is common for governments to solve their debt problem by inflating their currencies 4) sovereign defaults tend to occur in waves

2) governments have rarely repudiated their sovereign debt contracts 3) it is common for governments to solve their debt problem by inflating their currencies 4) sovereign defaults tend to occur in waves

which of the following are justifications given for the existence of a corporate profits tax? (check all that apply) 1)corporations participate, through the existence of corporate profits tax, to the investment and maintenance of public infrastructures 2)governments may have to step in for environment damages beyond the limited ability of the company that has caused the damages, as exemplified By TEPCO in Japan following the earthquake from 2011 3)governments may be forced to bail companies out or assist companies during bankruptcy proceeding, as exemplified by general motors in the after math of the financial crisis from 2007-2008 4)A specific share of nationalized companies in the profit sector is an necessary ingredient for an efficient antitrust law

3)governments may be forced to bail companies out or assist companies during bankruptcy proceeding, as exemplified by general motors in the after math of the financial crisis from 2007-2008 1)corporations participate, through the existence of corporate profits tax, to the investment and maintenance of public infrastructures

what is a rating agency

a agency which publishes its ratings on the reliability of securities

what best describes the "prudent person" rule?

a law which mandates that investing managers must do another educated experience investment manager might do in a similar circumstance