ABNORMAL PSYCHOLOGY MIDTERM EXAM SCRIPT
Questions with Correct Answers (Grade A+)
Question 1: where interest rates, along with stock and bond prices, are determined
Answer: Capital Markets.
Question 2: Investments.
Answer: 1. Security analaysis - finding proper values of individual securites 2. Portfolio Theory - structure
portfolios of stocks and bonds
Question 3: Proprietorships.
Answer: unincorporated business owned by 1 individual
Question 4: Partnership.
Answer: legal arrangement between two or more people
Question 5: corporation.
Answer: legal entity created by a state, and it is separate and distinct from its owners and managers
Question 6: limited liability company (LLC).
Answer: partnership and corporation
Question 7: limited liability partnership (LLP).
Answer: used for professional firms
Question 8: intrinsic value.
Answer: estimate of the stock's true value as calculated
Question 9: useful motivational tools.
Answer: - reasonable compensation packages - firing of managers who don't perform well - threat of hostile
takeovers
Question 10: spot markets.
Answer: markets in which assets are bought or sold for on the spot delivery
Page 1
, Question 11: futures markets.
Answer: participants agree today to buy or sell an asset at some future date
Question 12: money markets.
Answer: funds are borrowed or loaned for short periods
Question 13: capital markets.
Answer: for stocks and immediate or long term debt
Question 14: primary markets.
Answer: corporations raise capital by issuing new securities to raise capital
Question 15: secondary markets.
Answer: securities and other financial assets are traded among investors after they. have been issued by
corporations
Question 16: private markets.
Answer: transactions are worked out directly between two parties
Question 17: public markets.
Answer: standardized contracts are traded on organized exchanges
Question 18: investment banks.
Answer: underwrites and distributes new investmnets securities and helps businesses obtain financing
Question 19: commercial bank.
Answer: the traditional department store of finance serving a variety of savers and borrowers
Question 20: financial services corporation.
Answer: wide range of financial services
Question 21: mutual funds.
Answer: pool investor funds to purchase financial instruments to reduce risks through diversification
Page 2
Questions with Correct Answers (Grade A+)
Question 1: where interest rates, along with stock and bond prices, are determined
Answer: Capital Markets.
Question 2: Investments.
Answer: 1. Security analaysis - finding proper values of individual securites 2. Portfolio Theory - structure
portfolios of stocks and bonds
Question 3: Proprietorships.
Answer: unincorporated business owned by 1 individual
Question 4: Partnership.
Answer: legal arrangement between two or more people
Question 5: corporation.
Answer: legal entity created by a state, and it is separate and distinct from its owners and managers
Question 6: limited liability company (LLC).
Answer: partnership and corporation
Question 7: limited liability partnership (LLP).
Answer: used for professional firms
Question 8: intrinsic value.
Answer: estimate of the stock's true value as calculated
Question 9: useful motivational tools.
Answer: - reasonable compensation packages - firing of managers who don't perform well - threat of hostile
takeovers
Question 10: spot markets.
Answer: markets in which assets are bought or sold for on the spot delivery
Page 1
, Question 11: futures markets.
Answer: participants agree today to buy or sell an asset at some future date
Question 12: money markets.
Answer: funds are borrowed or loaned for short periods
Question 13: capital markets.
Answer: for stocks and immediate or long term debt
Question 14: primary markets.
Answer: corporations raise capital by issuing new securities to raise capital
Question 15: secondary markets.
Answer: securities and other financial assets are traded among investors after they. have been issued by
corporations
Question 16: private markets.
Answer: transactions are worked out directly between two parties
Question 17: public markets.
Answer: standardized contracts are traded on organized exchanges
Question 18: investment banks.
Answer: underwrites and distributes new investmnets securities and helps businesses obtain financing
Question 19: commercial bank.
Answer: the traditional department store of finance serving a variety of savers and borrowers
Question 20: financial services corporation.
Answer: wide range of financial services
Question 21: mutual funds.
Answer: pool investor funds to purchase financial instruments to reduce risks through diversification
Page 2
