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Exam (elaborations)
FIN 385 questions and correct answers
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---5December 20252025/2026A+
- when a securities firm acts as a broker, it - Ansexecutes 
transactions between two parties 
(blank) securities have a maturity of one year or less; (blank) securities 
are generally more liquid. - Ansmoney market; money market 
a firm that was privately held engages in an offering of stock to the 
public. this is considered a (blank) market transaction. - Ansprimary 
commercial paper in an example of a (blank blank) security. - 
Ansmoney market 
without the participation of financial intermedia...
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Exam (elaborations)
FINA 385 EXAM 2 QUESTIONS AND CORRECT ANSWERS
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---4March 20252024/2025A+
- FINA 385 EXAM 2 QUESTIONS AND 
CORRECT ANSWERS 
What are the factors the affect the exchange rate? ANSW-inflation differential, interest rate 
differential, and income differential 
Inflation differential ANSW-When US inflation is higher (by 5%), there is higher domestic 
inflation: which leads to higher exchange rate 
Interest rate differential ANSW-When domestic interest rate is higher, it will lead to higher 
exchange rate in the long-term 
Income differential ANSW-trade deficits ...
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PEAKGRADES
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Exam (elaborations)
FIN 385- EXAM 1 STUDY GUIDE QUESTIONS AND CORRECT ANSWERS
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---9March 20252024/2025A+
- FIN 385- EXAM 1 STUDY GUIDE 
QUESTIONS AND CORRECT 
ANSWERS 
The insurer agrees to do certain things, such as paying losses from covered perils, providing certain 
services (such as loss-prevention services), or agreeing to defend the insured in a liability lawsuit. 
Conditions ANSW-provisions in the policy that qualify or place limitations on the insurer's 
promise to perform. 
Strict Liability ANSW-means that liability is imposed regardless of negligence or fault. 
Comparative neg...
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PEAKGRADES
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Exam (elaborations)
FIN 385 EXAM 2 QUESTIONS AND CORRECT ANSWERS
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---10March 20252024/2025A+
- FIN 385 EXAM 2 QUESTIONS AND 
CORRECT ANSWERS 
What does Medigap cover? ANSW-Health care costs not covered by Medicare such as 
copayments, coinsurance, deductibles, and travel 
Who provides Medigap? ANSW-Private Companies 
What is the purpose of coinsurance? ANSW-encourages people to buy adequate coverage 
Benefits of the affordable care act ANSW-- Children can go on parents plan (max age: 26) -tax credits -insurance 
exchanges -eliminates Part D -Small business health care tax cred...
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PEAKGRADES
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Exam (elaborations)
FINA 385 OPTION STRATEGIES QUESTIONS AND CORRECT ANSWERS
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---1March 20252024/2025A+
- FINA 385 OPTION STRATEGIES 
QUESTIONS AND CORRECT 
ANSWERS 
butterfly spread ANSW-long one call option of X1 and long one call option of X3 while 
shorting two call options of X2, where X2= average of X1 & X3 
protective put ANSW-Buy a stock and the put option of the stock 
covered call ANSW-buy the stock and the call option on the stock 
bullish spread ANSW-long call (x1) and short call (x2) where X1<X2 
Long straddle ANSW-Long the call option and long the put option
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PEAKGRADES
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Exam (elaborations)
FINA 385 CHAPTER 6 QUESTIONS AND CORRECT ANSWERS
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---6March 20252024/2025A+
- FINA 385 CHAPTER 6 QUESTIONS AND 
CORRECT ANSWERS 
1 ) Which of the following statements regarding risk - averse investors is true ? ANSW-They 
only accept risky investments that offer risk premiums over the risk - free rate . 
2 ) Which of the following statements is ( are ) true ? I ) Risk - averse investors reject investments 
that are fair games . II ) Risk - neutral investors judge risky investments only by the expected returns 
. III ) Risk - averse investors judge investments only ...
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PEAKGRADES
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Exam (elaborations)
FIN 385 PRACTICE PROBLEMS QUESTIONS AND CORRECT ANSWERS
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---4March 20252024/2025A+
- FIN 385 PRACTICE PROBLEMS 
QUESTIONS AND CORRECT 
ANSWERS 
Which of the following is a covered person under the medical payments coverage of the PAP? 
ANSW-a family member of the name insured if struck by an auto while crossing the street 
John has an auto which is covered for collision losses subject to a $250 deductible. Kate's auto also 
has collision coverage but her deductible is $500. Which of the following statements describes how a 
$2,000 collision loss will be paid if it oc...
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PEAKGRADES
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Exam (elaborations)
FIN 385 EXAM 1 QUESTIONS AND CORRECT ANSWERS
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---11March 20252024/2025A+
- FIN 385 EXAM 1 QUESTIONS AND 
CORRECT ANSWERS 
Excluded Property: 
The contract may exclude or place limitations on the coverage of certain property. For example, in a 
homeowners policy, certain types of personal property are excluded, such as cars, planes, animals, 
birds and fish. 
Exclusions continued ANSW-used because extraordinary hazards are present 
also necessary because coverage can be better provided by other contracts. 
certain property is excluded because of moral hazard or...
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PEAKGRADES
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Exam (elaborations)
FIN 385 EXAM 1 QUESTIONS AND CORRECT ANSWERS
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---10March 20252024/2025A+
- FIN 385 EXAM 1 QUESTIONS AND 
CORRECT ANSWERS 
A passive monetary policy adjusts the money supply automatically in response to economic 
conditions. 
True or False ANSW-False 
In general, there is 
a) a positive relationship between unemployment and inflation 
b) an inverse relationship between unemployment and inflation 
c) an inverse relationship between GDP and inflation 
d) a positive relationship between GDP and unemployment ANSW-b) an inverse relationship 
between unemployment ...
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PEAKGRADES