CHAPTER 14. FILL- IN. THE- BLANK today, Do=current annual common stock dividend, Kesrequired rate of return for "All of the following are recognized as important influences in the development of the common stock, g=growth rate, Dledividend at end of first year banking crisis of 2008 and resulting credit crisis EXCEPT for the IMF bailed out "Compounding Frequency-m=(# of years)(# of compounding periods per year), is(quoted Freddie Mac and Fannie Mae annual interest) (= of compounding penods per year) "The formation of the European Monetary Union and its single currency Euro is expected to eliminate foreign currency risk between its member countries, create stock and Match the following terms to their definitions bond prices denominated in cures, and have stock and bond indexes tracking 4. Over-the- counter securities combined group of common stocks and bonds from the member countries "A market for securities where dealers transact purchases and sales of Companies list their stock around the globe to thereoce liquidity for their stockholders and securities by trading from their own inventory of securities provide opportunities for the sale of new stock in foreign countries b. Agency securties "The purpose of secondary trading is to provide Hquidit and comparison between Securities listed by various semiguto lows segments of the federal goverment such as the Federal Home Loan Bank "Necessary computerized handling of transections is NOT : criterion for an efficient C. Money markets market Competitive markets for securities with maturities of one year or "The efficient market hypothesis deals primarily with the degree to which prices adjust to new information The "strong: form of the efficient market hypothesis states that all information both public Internally generated funds This fund is composed of retained earnings and non-cash items and private is immediately reflected in stock prices added back "The Securities Exchange Act of 1934 is primarily concerned with regulation of organized exchanges Capital markets CHAPTER 14. IF Competitive markets for securities with maturities of more them one TRUE: Capital markets consist of securities having maturities greater than one year FALSE: U.S. Goverment agency securities are directly guaranteed by the full feith and Municipal securities credit of the U.5. Treasury Are issued by state and local government umhits FALSE: In the new issues market for corporate capital, common stocks account for the Financial intermediary largest percentage of new funds relived A financial institution such as : bank or life insurance company that TRUE: The copitel markets serve as a way of allocating available capital to the most chiracto other people's money into indirect investments like government and corporate efficient user FALSE: When an investor buys stock in the stock market, he is purchasing shares from : Listing requirements company Financial standards that corporations must meet before their FALSE: Securities issued by states and municipalities one referred to as statutory bonds and commons tock com be traded on a stock exchange municipal bonds Duel trading FALSE: Brokers actually own the securities they buy and sell on the floor exchange Exists when the common stock of one company is traded on more then one stock exchange "FV=future valu:, PV-present value, is interest rate, menumber of periods, A=annuity "Pbeprice of bond, Itsinterest payments, Preprincipal payment at maturity, t= comeponding to period, m=# of periods, Veyield to maturity (required rate off "tum), Pp= price of preferred stock, Dp= annual dividend for preferred Stock, Kp= required mate of return (discount met:), Posprice of stock