Topics: Bond, Stock market, Stock Pages: 23 (17158 words) Published: October 21, 2014
TitleQuiz Chapter 1StartedNovember 16, 2013 812 PMSubmittedNovember 16, 2013 819 PMTime spentHYPERLINK javascriptopenNewWindow(viewAttemptEventsLog.dowebctassmtAttemptId331676404011,ViewAccessLog,500,500) o View Access Log in a new window000724 Total score8/10 80 Total score adjusted by 0.0 Maximum possible score 10 1.Which of the following statements about dealer markets is true Student Response Value Correct Answer Feedback A. Closed-end funds are sold exclusively through this market. B. Rights and warrants can be bought and sold through this market. C. The volume of trading is far greater than the equities market. 100 D. This market uses a system where buyers and sellers enter competitive bids and offers simultaneously. General Feedback Almost all bonds and debentures are sold through the dealer market. These dealer markets are less visible than the auction markets for equities so many people are surprised to learn that the volume of trading on the dealer market for debt securities is several times larger than the equity market. Text reference Chapter 1 The Capital Market. Score 1/1 2.The Canadian securities industry is made up of 3 key elements that make its functioning possible. What are these 3 components Student Response Value Correct Answer Feedback A. Banks, pension funds and investment dealers. B. Banks, trust companies and insurance companies. C. Financial products, financial markets and financial intermediaries. 100 D. Federal, provincial and municipal regulators. General Feedback The three key elements in the securities industry are financial products, financial markets and financial intermediaries. Text reference Chapter 1 The Capital Market. Score 1/1 3.The government of a developing country has just announced a new program to nationalize all oil companies operating within their borders. How are investors interested in investing in this country likely to react Student Response Value Correct Answer Feedback A. Investors will increase the amount of capital flowing to the country because they feel safer now that the government is getting things under control. B. Investors will want to increase the amount of capital as government controlled companies tend to be more profitable. C. It will decrease capital flowing into this country as investors will be worried that other industries will be nationalized and they will lose their capital. 100 D. It will likely have little impact as most oil companies tend to be foreign-owned anyway so they will not be affected. General Feedback Capital has three important characteristics. It is mobile, sensitive to its environment and scarce. Therefore capital is extremely selective. It attempts to settle in countries or locations where government is stable, economic activity is not over-regulated, the investment climate is hospitable and profitable investment opportunities exist. The decision as to where capital will flow is guided by country risk evaluation. Text reference Chapter 1 The Capital Market. Score 1/1 4.Minna is offered an investment. It promises to pay 40 a year in income and she will have her capital returned to her in ten years. This investment is not secured by anything except the good name of the company. What type of financial instrument is she being offered Student Response Value Correct Answer Feedback A. Bonds. B. Common shares. C. Debentures. 100 D. Preferred shares. General Feedback Debt instruments formalize a relationship in which the issuer promises to repay the loan at maturity, and in the interim makes interest payments to the investor. The term of the loan ranges from very short to very long, depending on the type of instrument. Bonds and debentures are among the most common forms of debt instrument. They are issued by all levels of government, many corporations, and some educational and religious organizations. A bond is secured by specific assets of the issuer, while a...
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