Choose the best answer from the given alternatives 1. Direct financing is a situation where: A)

Choose the best answer from the given alternatives 1. Direct financing is a situation where: A)

Choose the best answer from the given alternatives

1. Direct financing is a situation where:


Deficit units raise funds from surplus units.

B) Surplus units raise funds from deficit units.

C) Deficit units raise funds from financial intermediaries.

D) Financial intermediaries obtain funds from surplus units.

E) None of these.

2. In the Australian financial system, financing is provided by:

A) Derivative and securities markets.

B) Securities markets and financial intermediaries.

C) Governments and financial intermediaries.

D) Derivative markets and financial intermediaries.

E) Derivative markets, securities markets and financial intermediaries.

3. The credit ratings provided by ratings agencies:

A) Play a role in overcoming information asymmetry in the financial markets.

B) Are an informed opinion on the credit standing of a debt issue.

C) Are paid for by the security’s issuer.

D) Were found to be unreliable (in relation to mortgage-related securities) during the GFC.

E) All of these.

4. Brokers:

A) Earn a spread by buying securities at a low price and selling them at a higher price.

B) Operate in over-the-counter markets.

C) Charge a commission on the trades they perform.

D) Can be described as “market makers”.

E) All of these.

5. Active secondary markets do NOT:

A) Provide investors with liquidity.

B) Raise funds for the issuers of securities.

C) Perform price discovery.

D) Perform maturity transformation.

E) Assist the operation of primary markets.

6. IPOs have a number of disadvantages. These do NOT include:

A) The expense of conducting the IPO.

B) The dilution of ownership for continuing owners.

C) A greater capacity to remunerate management and employees.

D) The risk of incurring agency costs associated with the separation of ownership and control.

E) A short-term bias to management decision making.

7. Which of the following is NOT an explanation advanced for the phenomenon of underpricing of an IPO?

A) Providing the initial buyers with a capital gain in an effort to create goodwill.

B) The desire of the seller in the primary market to achieve a successful float.

C) The wish to raise smaller amounts of capital.

D) Compensation for the risk accepted by buyers in IPOs, given that underpricing is not guaranteed.

E) The superior negotiating power of the investment bank over the seller.

8. A listed company:

A) Can generally raise as much new equity as it wishes through a private placement.

B) Can expect its share price to rise if it conducts a rights issue.

C) Will successfully conduct a rights issue if the subscription price is set above the current share price.

D) Can rapidly increase its equity capital through dividend reinvestment schemes.

E) None of these are correct.

9. The functions of the share market do NOT include:

A) Performing price discovery by revealing the value of shares.

B) Endowing listed securities with liquidity.

C) Setting the price for IPOs.

D) Disciplining the behaviour of a company’s top management.

E) Developing a pool of investors.

10. If you put $310 in a savings account at the end of each year for 10 years, how much money will be in the account at the end of the 10th year? Assume that the account earns 5.5% per annum and round to the nearest dollar.

A) $3,991

B) $3,100

C) $2,336

D) $529

E) None of the above

Are you overwhelmed by your class schedule and need help completing this assignment? You deserve the best professional and plagiarism-free writing services. Allow us to take the weight off your shoulders by clicking this button.

Get help

Who Will Write your Paper

Writer avatar

Rating: 4.9/5    Reviews 377

Success rate 96%

Completed projects: 545

I am an experienced writer offering professional services across diverse fields. I provide quality work with strict adherence to the deadline.

Writer avatar
Tutor_Dr. Edith

Rating: 4.8/5    Reviews 381

Success rate 97%

Completed projects: 490

I am an experienced writer with great research and analytical skills. Original quality paper and on-time delivery are guaranteed. Let's do this!

Writer avatar

Rating: 4.7/5    Reviews 316

Success rate 98%

Completed projects: 398

I am a professional writer with more than 8 years of experience. My mission is to provide you with high-quality paper in a timely fashion.

Writer avatar

Rating: 4.8/5    Reviews 371

Success rate 97%

Completed projects: 432

Hi, I deliver quality papers on time following all the instructions provided. Client's satisfaction is my priority. Welcome for plagiarism-free papers.

Writer avatar
Tutor_Prof. Allan

Rating: 4.8/5    Reviews 400

Success rate 97%

Completed projects: 487

With over half a decade of academic experience, I'm committed both to efficiency and punctuality. If it's quality you're looking for, then I'm here to provide!

Writer avatar
Tutor_Prof. Gabie

Rating: 4.9/5    Reviews 447

Success rate 97%

Completed projects: 546

A quality-driven, skilled writer with over 5 years of experience in various disciplines. I deliver plagiarism-free papers and content of impeccable quality, always original and always before the deadline!

Writer avatar

Rating: 4.9/5    Reviews 427

Success rate 98%

Completed projects: 567

I have been a full-time freelance researcher and writer for a period of over 6 years. I have successfully completed over 1000 projects and assignments. I have had a good professional relationship with my clients. Try me today!

Writer avatar

Rating: 4.9/5    Reviews 305

Success rate 98%

Completed projects: 404

I am a proficient writer with knowledge across a wide range of academic disciplines. I guarantee quality, timely and original content.

Writer avatar

Rating: /5    Reviews 419

Success rate 97%

Completed projects: 506

Hi, count on me to deliver quality and exemplary papers. I will pay attention to all your instructions, and meet all your expectations.