Reference no: EM133307255

Questions

1. Which of the following is not under Basel II to bolster the safety and soundness of the financial system?

a. Regulatory capital requirements for credit, market and operational risk.

b. Eliminating complex risk based capital requirements for on and off balance sheet accounts.

c. Requirements to disclose to market participants the institution's capital structure, risk exposure and capital adequacy.

d. Ensuring that banks have sound internal control procedures in place to measure and limit risk.

2. Exchange-traded funds have several advantages over index funds except for:

a. the ability to sell exchange-traded fund shares short

b. the ability to sell the shares back to the fund

c. the ability to purchase exchange-traded fund shares on margin

d. the ability to trade throughout the day at continuously updated prices

3. Which of the following statements is false?

a. A best efforts offering is one where the investment banker acts only as a distribution agent.

b. When an underwriter engages in a firm commitment, the underwriter is acting as a principle.

c. An investment banker may be unwilling to engage in a firm commitment offer if the issuer is relatively unknown to the public.

d. If an underwriter overestimates the demand for a firm s securities in a firm commitment offering, the underwriter can cancel the issue and refund the fees paid by the issuing firm.

4. Which one of the following statements about venture capitalists is false?

a. The federal government licenses some private firms to provide lower cost funds to entrepreneurs.

b. Most private venture capitalists are organized as limited partnerships.

c. Venture capitalists contribute debt financing rather than pursuing ownership interest.

d. Angel venture capitalists are wealth individuals who fund business startups.