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FIN350: Spring 2026/2027 Quiz 1 (Individual
Project Answers 1 & 2) (Nam)
A corporation acquires new funds only when its securities
are sold in the
A) secondary market by an investment bank.
B) primary market by an investment bank.
C) secondary market by a stock exchange broker.
D) secondary market by a commercial bank. - CORRECT
ANSWER-B) primary market by an investment bank.
Intermediaries who link buyers and sellers by buying and
selling securities at stated prices (bid-ask price) are called
A) investment bankers.
B) traders.
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C) brokers.
D) dealers. - CORRECT ANSWER-D) dealers.
Which of the following statements about financial
markets and securities are true?
A) Most common stocks are traded over-the-counter (by
dealers), although the largest corporations have their
shares traded at organized stock exchanges such as the
New York Stock Exchange.
B) A corporation acquires new funds only when its
securities are sold in the primary market.
C) Money market securities are usually more widely
traded than longer-term securities and so tend to be
more liquid.
D) All of the above are true. - CORRECT ANSWER-
D) All of the above are true.
Which of the following markets is sometimes organized
as an over-the-counter market?
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A) The stock market
B) The bond market
C) The foreign exchange market
D) all of the above - CORRECT ANSWER-D) all of the
above
The main sources of financing for businesses, in the
general order of importance, are
A) financial intermediaries, issuing bonds, issuing
stocks.
B) issuing bonds, issuing stocks, financial
intermediaries.
C) issuing stocks, issuing bonds, financial
intermediaries.
D) issuing stocks, financial intermediaries, issuing
bonds. - CORRECT ANSWER-A) financial
intermediaries, issuing bonds, issuing stocks.
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The presence of transaction costs in financial markets
explains, in part, why
A) financial intermediaries and indirect finance play
such an important role in financial markets.
B) equity and bond financing play such an important
role in financial markets.
C) corporations get more funds through equity financing
than they get from financial intermediaries.
D) direct financing is more important than indirect
financing as a source of funds. - CORRECT ANSWERA)
financial intermediaries and indirect finance play such an
important role in financial markets.
Through risk-sharing activities, a financial intermediary
________ its own risk and ________ the risks of its
customers.
A) reduces; increases
B) increases; reduces
FIN350: Spring 2026/2027 Quiz 1 (Individual
Project Answers 1 & 2) (Nam)
A corporation acquires new funds only when its securities
are sold in the
A) secondary market by an investment bank.
B) primary market by an investment bank.
C) secondary market by a stock exchange broker.
D) secondary market by a commercial bank. - CORRECT
ANSWER-B) primary market by an investment bank.
Intermediaries who link buyers and sellers by buying and
selling securities at stated prices (bid-ask price) are called
A) investment bankers.
B) traders.
,2 | Page
C) brokers.
D) dealers. - CORRECT ANSWER-D) dealers.
Which of the following statements about financial
markets and securities are true?
A) Most common stocks are traded over-the-counter (by
dealers), although the largest corporations have their
shares traded at organized stock exchanges such as the
New York Stock Exchange.
B) A corporation acquires new funds only when its
securities are sold in the primary market.
C) Money market securities are usually more widely
traded than longer-term securities and so tend to be
more liquid.
D) All of the above are true. - CORRECT ANSWER-
D) All of the above are true.
Which of the following markets is sometimes organized
as an over-the-counter market?
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A) The stock market
B) The bond market
C) The foreign exchange market
D) all of the above - CORRECT ANSWER-D) all of the
above
The main sources of financing for businesses, in the
general order of importance, are
A) financial intermediaries, issuing bonds, issuing
stocks.
B) issuing bonds, issuing stocks, financial
intermediaries.
C) issuing stocks, issuing bonds, financial
intermediaries.
D) issuing stocks, financial intermediaries, issuing
bonds. - CORRECT ANSWER-A) financial
intermediaries, issuing bonds, issuing stocks.
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The presence of transaction costs in financial markets
explains, in part, why
A) financial intermediaries and indirect finance play
such an important role in financial markets.
B) equity and bond financing play such an important
role in financial markets.
C) corporations get more funds through equity financing
than they get from financial intermediaries.
D) direct financing is more important than indirect
financing as a source of funds. - CORRECT ANSWERA)
financial intermediaries and indirect finance play such an
important role in financial markets.
Through risk-sharing activities, a financial intermediary
________ its own risk and ________ the risks of its
customers.
A) reduces; increases
B) increases; reduces
