Finding true or false statements

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Reference no: EM1346818

Question 1
The primary role of organized security exchanges is to raise capital (money) for firms.
Answer
TRUE
FALSE
Question 2

In an "underwriting" the investment banker guarantees the firm selling the securities a specified amount.
Answer
TRUE
FALSE

T
Question 3

In a "best effort" sale of securities, the risk of the sale rests with the investment banker.
Answer
TRUE
FALSE

Question 4

The "syndicate's" role in an underwriting is to sell the new issue of securities.
Answer

TRUE
FALSE
Question 5

The preliminary prospectus ("red herring") does not include the offer price of a new stock issue.
Answer

TRUE
FALSE
Question 6

Which of the following is not a short-term, liquid asset?
Answer
a. negotiable certificate of deposit
b. U.S. Treasury bills
c. corporate stock
d. commercial paper
Question 7

Money market mutual funds invest in
1. commercial paper
2. repurchase agreements
3. corporate bonds

Answer
a. 1 and 2
b. 1 and 3
c. 2 and 3
d. All of these choices
Question 8

The deregulation of the banking system has
Answer
a. increased the growth of money market mutual funds
b. resulted in lower interest rates
c. blurred distinctions among financial intermediaries
d. reduced the power of the SEC
Question 9

Commercial paper is
Answer
a. a short-term unsecured debt of a corporation
b. a short-term secured debt of a corporation
c. a long-term unsecured debt of a corporation
d. a long-term secured debt of a corporation

Question 10

Which of the following does not have default risk?
Answer

a. money market mutual funds
b. commercial paper
c. negotiable certificates of deposit
d. treasury bills

Reference no: EM1346818

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