Financial Institutions, Markets and Instruments (ABM_BF12-IIIa-2-5)
Quiz by Nida Flores
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- Q1
1. To achieve the goal of profit maximization for each alternative being considered, the financial manager would select the one that is expected to result in the highest monetary return.
True
False
30sABM_BF12-IIIa-5 - Q2
2. Dividend payments change directly with changes in earnings per share.
False
True
30sABM_BF12-IIIa-5 - Q3
3. The wealth of corporate owners is measured by the share price of the stock.
True
False
30sABM_BF12-IIIa-5 - Q4
4. Financial markets are intermediaries that channel the savings of individuals, businesses, and government into loans or investments
False
True
30sABM_BF12-IIIa-5 - Q5
5. The money market involves trading of securities with maturities of one year or less while the capital market involves the buying and selling of securities with maturities of more than one year.
False
True
30sABM_BF12-IIIa-5 - Q6
6. Primary and secondary markets are markets for short-term and long-term securities, respectively.
False
30sABM_BF12-IIIa-5 - Q7
7. Holders of equity have claims on both income and assets that are secondary to the claims of creditors.
False
True
30sABM_BF12-IIIa-5 - Q8
8.Preferred stock is a special form of stock having a fixed periodic dividend that must be paid prior to payment of any interest to outstanding bonds
True
False
30sABM_BF12-IIIa-5 - Q9
9. Commercial banks obtain most of their funds from borrowing in the capital markets.
True
False
30sABM_BF12-IIIa-5 - Q10
10. Credit unions are the largest type of financial intermediary handling individual savings.
False
True
30sABM_BF12-IIIa-5 - Q11
11.A mutual fund is a type of financial intermediary that obtains funds through the sale of shares and uses the proceeds to acquire bonds and stocks issued by various business and governmental units.
True
False
30sABM_BF12-IIIa-5 - Q12
12. IPO stands for Interest and Principal Obligation
False
True
30sABM_BF12-IIIa-5 - Q13
13. Suppliers of funds or the holders of the securities may decide to sell the securities that have previously been purchased through secondary markets
True
False
30sABM_BF12-IIIa-5 - Q14
14. Money markets are venues where temporarily idle funds are invested and likewise temporary financing can be acquired
True
False
30sABM_BF12-IIIa-5 - Q15
15. Holders of preferred stocks are given priorities over common stocks in terms of claims over the assets of a company.
True
False
30sABM_BF12-IIIa-5