FINANCE HMW2
government is typically a ____.
net demander of funds because it borrows more than it saves
the ____ market is where securties are initially issued and the ____ market is where pre-owned securites (not new issues) are traded.
primary;; secondary
which of the follwoing is a means of selling bonds or stocks to the public?
public offering
the key securities traded in the capital markets are ______.
stocks and bonds
the primary risk of mortgage-- backed securities is ______.
the homeowners may not be able to, or choose not to repay their loans
which of the following acts regulates the secondary market
the securities exhange act of 1934
firms that require funds from external sources can obtain them ___.
through financial intitutions
mortgage -- backed securities are securitites that represent claims on the cash flows generated by a pool of mortgages
true
the average tax rate paid on the firm's ordinary income can be calculated by dividing its taxable income.
true
the eurocurrency market is a market for short- term bank deposists denominated in u.s. dollars of other easily convertible currencies.
true
the marginal tax rate represents the rate at which the next dollar of income is taxed.
true
the securities act of 1933 focuses on regulating the sale of securites in the primary market, wearas the 1934 act deals with the regulations governing the transactions in the secondary market
true
a crisis in the financial sector often spills over into other industries because when financial institutions ______ barrowing, activity in most other industries.
contact; slows down
commercial banks advise firms on major transaction such as mergers or financial restructurings
false
subprime mortages are mortage loans made to barrower with high incomes and better than average credit histories
false
the glass- steagall act was impsed to allow commercial and investmetn banks to combine and work together
false
which of the following serves as intermediary channel the savings of individuals, businesses, and goernments into loans and investmetns
financial institutions
which of the following is a forum in which suppliers and demanders of funds transacted business directly?
financial markets
which of the following is true of perferred stock?
it has features of bonds and common stock
which of the following is true of a primary market?
it is the only market in which the issuer is directly involved in the transaction.
which of the following is true of a securities exchanges?
it provides a marketplace in which firms can raise funds thruough the sale of new securites and purchasers can resale seurites
