FINA 4500 Test Questions with 100% Correct
Answers
CHP 12-16 Quiz's
Sponsored ADRs
-are created by a bank at the request of the foreign company that issued the underlying
security.
-can trade on the NASDAQ.
-can trade on the NYSE.
-all of the options
ADR trades
clear in three days, just like trades in U.S. shares.
Companies domiciled in countries with weak investor protection can reduce agency
costs between shareholders and management
by listing their stocks in countries with strong investor protection.
Which of the following statements regarding cross-listing is not true?
Cross-listing provides a means for expanding the firms base for an investor's stock.
In June 2001, the _________blank merged with Euronext, and Dublin followed suit
acquiring the _________blank in March 2018
Lisbon Stock Exchange; Irish Stock Exchange
The exchange markets in the U.S. are
both agency/auction markets.
,"Yankee" bonds are
dollar-denominated foreign bonds originally sold to U.S. investors.
A measure of liquidity for a stock market is the turnover ratio; defined as
the ratio of stock market transactions over a period of time divided by the size, or market
capitalization, of the stock market.
Which investment is likely to be the least liquid?
A house in an expensive part of town.
Which investment is likely to be the most liquid?
A share of a publicly traded company trading on the NYSE.
The sale of previously issued common stock traded between investors occurs in
the secondary market.
There are two types of equity related bonds:
convertible bonds and bonds with equity warrants.
Floating-rate notes
are a form of adjustable rate bond.
Unlike a bond issue, in which the entire issue is brought to market at once,
_________blank is partially sold on a continuous basis through an issuance facility that
allows the borrower to obtain funds only as needed on a flexible basis.
a Euro-medium term note issue
In contrast to many domestic bonds, which make _________blank coupon payments,
coupon interest on Eurobonds is typically paid _________blank.
, semiannual; annually
A "global bond" issue
is a very large international bond offering by a single borrower that is simultaneously sold in
several national bond markets.
Shelf registration
allows an issuer to preregister a securities issue, and then "shelve" the securities for later sale.
U.S. security regulations require Yankee bonds and U.S. corporate bonds sold to U.S.
citizens to be
registered bonds.
A "bearer bond" is one that
possession is evidence of ownership.
A "foreign bond" issue is
one offered by a foreign borrower to investors in a national market and denominated in that
nation's currency (e.g., a German MNC issuing dollar-denominated bonds to U.S. investors).
In the graph at shown, X and Y represent
U.S. stocks and global stocks, respectively.
Systematic risk is
non-diversifiable risk and the risk that remains even after investors fully diversify their
portfolio holdings.
The "world beta" measures the
sensitivity of returns on a security to world market movements.
Answers
CHP 12-16 Quiz's
Sponsored ADRs
-are created by a bank at the request of the foreign company that issued the underlying
security.
-can trade on the NASDAQ.
-can trade on the NYSE.
-all of the options
ADR trades
clear in three days, just like trades in U.S. shares.
Companies domiciled in countries with weak investor protection can reduce agency
costs between shareholders and management
by listing their stocks in countries with strong investor protection.
Which of the following statements regarding cross-listing is not true?
Cross-listing provides a means for expanding the firms base for an investor's stock.
In June 2001, the _________blank merged with Euronext, and Dublin followed suit
acquiring the _________blank in March 2018
Lisbon Stock Exchange; Irish Stock Exchange
The exchange markets in the U.S. are
both agency/auction markets.
,"Yankee" bonds are
dollar-denominated foreign bonds originally sold to U.S. investors.
A measure of liquidity for a stock market is the turnover ratio; defined as
the ratio of stock market transactions over a period of time divided by the size, or market
capitalization, of the stock market.
Which investment is likely to be the least liquid?
A house in an expensive part of town.
Which investment is likely to be the most liquid?
A share of a publicly traded company trading on the NYSE.
The sale of previously issued common stock traded between investors occurs in
the secondary market.
There are two types of equity related bonds:
convertible bonds and bonds with equity warrants.
Floating-rate notes
are a form of adjustable rate bond.
Unlike a bond issue, in which the entire issue is brought to market at once,
_________blank is partially sold on a continuous basis through an issuance facility that
allows the borrower to obtain funds only as needed on a flexible basis.
a Euro-medium term note issue
In contrast to many domestic bonds, which make _________blank coupon payments,
coupon interest on Eurobonds is typically paid _________blank.
, semiannual; annually
A "global bond" issue
is a very large international bond offering by a single borrower that is simultaneously sold in
several national bond markets.
Shelf registration
allows an issuer to preregister a securities issue, and then "shelve" the securities for later sale.
U.S. security regulations require Yankee bonds and U.S. corporate bonds sold to U.S.
citizens to be
registered bonds.
A "bearer bond" is one that
possession is evidence of ownership.
A "foreign bond" issue is
one offered by a foreign borrower to investors in a national market and denominated in that
nation's currency (e.g., a German MNC issuing dollar-denominated bonds to U.S. investors).
In the graph at shown, X and Y represent
U.S. stocks and global stocks, respectively.
Systematic risk is
non-diversifiable risk and the risk that remains even after investors fully diversify their
portfolio holdings.
The "world beta" measures the
sensitivity of returns on a security to world market movements.
