FMI FINAL EXAM questions and answers with solutions 2025/2026

FMI FINAL EXAM questions and answers
with solutions 2025/2026



A. - ANSWER 1. Those financial markets that facilitate the flow of short-
term funds are known as
A. money markets
B. capital markets
C. primary markets
D. secondary markets


A. - ANSWER 2. The Securities Act of 1933
A. required complete disclosure of relevant financial information for
publically offered securities in the primary market.
B. declared trading strategies to manipulate the prices of public
secondary securities illegal.
C. declared misleading financial statements for public primary securities
illegal.
D. required complete disclosure of relevant financial information for
securities traded in the secondary market.


B. - ANSWER 3. Funds are provided to the initial issuer of securities in
the
A. secondary market

, B. primary market
C. deficit market
D. surplus market


A. - ANSWER 4. Equity securities have a ________ expected return than
most long-term debt securities, and they exhibit a ________ degree of
risk.
A. higher; higher
B. lower; lower
C. lower; higher
D. higher; lower


A. - ANSWER 5. The equilibrium interest rate
A. equates the aggregate demand for funds with the aggregate supply of
loanable funds.
B. equates the elasticity of the aggregate demand and supply for
loanable funds.
C. decreases as the aggregate supply of loanable funds decreases.
D. increases as the aggregate demand for loanable funds decreases.


B. - ANSWER 6. The term structure of interest rates defines the
relationship
A. between risk and return.
B. between risk and maturity
C. between maturity and yield