MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1)...

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MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Insurance companies primarily reduce an individual's risk by: A) providing payment services. B) spreading that risk across many individuals. C) transporting that risk forward in time. D) providing low-interest-rate loans. 2) Corporate debt instruments are most commonly traded: A) in the money market. C) on NASDAQ. B) in the over-the-counter market. D) on the NYSE. 3) A bond differs from a share of stock in that a bond: A) has more risk. C) represents a claim on the firm. B) has guaranteed returns. D) has a maturity date. 4) When corporations need to raise funds through stock issues, they rely on the: A) tertiary market. B) centralized NASDAQ exchange. C) primary market. D) secondary market. 5) Financing for public corporations flows through: A) financial intermediaries only. B) the financial markets, financial intermediaries, or both. C) derivatives markets. D) the financial markets only. TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 6) Financing for public corporations must flow through financial markets. 7) For corporate bonds, the higher the credit quality of an issuer, the higher the interest rate. 1) 8) Which of these institutions are not major investors in U.S. equities? A) hedge funds B) mutual funds C) banks D) pension funds 2) 6) 7) MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 9) Which one of the following is least liquid? WH A) Real estate C) Bank deposit 10) You can buy silver in the: A) capital markets. C) option markets. B) U.S. Treasury bonds D) Foreign currency B) commodities markets. D) foreign exchange markets. 11) Which one of the following is the biggest provider of payment mechanisms? A) Banks C) Hedge funds B) Insurance companies D) Mutual funds TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 12) The market for derivatives is also a source of financing for corporations. ODIO 10) 14) A capital investment that generates a 10% rate of return is worthwhile if. A) top-quality corporate bonds offer 10% rates of return. B) corporate bonds of similar risk offer 8% rates of return. 13) The key to the banks' ability to make illiquid loans is their ability to pool liquid deposits 13) from thousands of depositors. C) the expected rate of return on the stock market is 12%. D) corporate bonds of similar risk offer 11% rates of return. MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 2 15) During the Financial Crisis of 2007-2009, the U.S. government bailed out all of the following firms except: A) Lehman Brothers. C) Freddie Mac. B) AIG. D) Fannie Mac. 16) The opportunity cost of capital: A) is the maximum acceptable rate of return on a project. B) is the interest rate that the firm pays on a loan from a financial institution. C) is the minimum acceptable rate of return on a a project. D) is always less than 10%. 17) Which one of these assists in shifting an individual's consumption forward in time? A) A bank line of credit B) A life insurance policy C) A bank savings account D) A retirement savings plan 11) 12) 14) 15) 16) 17) — - TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 18) Insurance companies provide a mechanism for individuals to pool their risks. 18) - MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 19) Which of the following are major holders of corporate bonds? A) New York Stock Exchange. C) banks. B) insurance companies. D) households. TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 20) The opportunity cost of capital is the expected rate of return that shareholders can obtain in the financial markets on investments with the same risk as the firm's capital investments. 19) 20) - | MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Insurance companies primarily reduce an individual's risk by: A) providing payment services. B) spreading that risk across many individuals. C) transporting that risk forward in time. D) providing low-interest-rate loans. 2) Corporate debt instruments are most commonly traded: A) in the money market. C) on NASDAQ. B) in the over-the-counter market. D) on the NYSE. 3) A bond differs from a share of stock in that a bond: A) has more risk. C) represents a claim on the firm. B) has guaranteed returns. D) has a maturity date. 4) When corporations need to raise funds through stock issues, they rely on the: A) tertiary market. B) centralized NASDAQ exchange. C) primary market. D) secondary market. 5) Financing for public corporations flows through: A) financial intermediaries only. B) the financial markets, financial intermediaries, or both. C) derivatives markets. D) the financial markets only. TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 6) Financing for public corporations must flow through financial markets. 7) For corporate bonds, the higher the credit quality of an issuer, the higher the interest rate. 1) 8) Which of these institutions are not major investors in U.S. equities? A) hedge funds B) mutual funds C) banks D) pension funds 2) 6) 7) MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 9) Which one of the following is least liquid? WH A) Real estate C) Bank deposit 10) You can buy silver in the: A) capital markets. C) option markets. B) U.S. Treasury bonds D) Foreign currency B) commodities markets. D) foreign exchange markets. 11) Which one of the following is the biggest provider of payment mechanisms? A) Banks C) Hedge funds B) Insurance companies D) Mutual funds TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 12) The market for derivatives is also a source of financing for corporations. ODIO 10) 14) A capital investment that generates a 10% rate of return is worthwhile if. A) top-quality corporate bonds offer 10% rates of return. B) corporate bonds of similar risk offer 8% rates of return. 13) The key to the banks' ability to make illiquid loans is their ability to pool liquid deposits 13) from thousands of depositors. C) the expected rate of return on the stock market is 12%. D) corporate bonds of similar risk offer 11% rates of return. MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 2 15) During the Financial Crisis of 2007-2009, the U.S. government bailed out all of the following firms except: A) Lehman Brothers. C) Freddie Mac. B) AIG. D) Fannie Mac. 16) The opportunity cost of capital: A) is the maximum acceptable rate of return on a project. B) is the interest rate that the firm pays on a loan from a financial institution. C) is the minimum acceptable rate of return on a a project. D) is always less than 10%. 17) Which one of these assists in shifting an individual's consumption forward in time? A) A bank line of credit B) A life insurance policy C) A bank savings account D) A retirement savings plan 11) 12) 14) 15) 16) 17) — - TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 18) Insurance companies provide a mechanism for individuals to pool their risks. 18) - MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 19) Which of the following are major holders of corporate bonds? A) New York Stock Exchange. C) banks. B) insurance companies. D) households. TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 20) The opportunity cost of capital is the expected rate of return that shareholders can obtain in the financial markets on investments with the same risk as the firm's capital investments. 19) 20) - |

Answer rating: 100% (QA)

The detailed answer for the above question is provided below 1 B Spreading that risk across many individuals Insurance companies reduce an individuals risk by pooling the risks of many individuals tog... View the full answer