PART I CORPORATE FINANCING &
VALUE CREATION EXAM QUESTIONS
AND ANSWERS
Give three examples of financial markets - ANSWER-1. Capital markets
2. Commodities
3. Derivatives
Give two examples of deficit agents - ANSWER-1. NFCs
2. Governments
Give two examples of surplus agents - ANSWER-1. Retail investors
2. Institutional investors
Give two examples of financial instruments in capital markets - ANSWER-1. Equity
2. Bonds
Give two examples of financial instruments in money markets - ANSWER-1. Deposits
2. Commercial paper
Give two examples of financial instruments in derivatives - ANSWER-1. Options
2. Futures
Define primary markets - ANSWER-Seller/issuer placing the securities on the market for
the first time
Define secondary markets - ANSWER-Securities have already been issued and are
now being traded among buyers
Define public offering - ANSWER-A public offering is the sale of equity shares or other
financial instruments to the public in order to raise capital
Define private placements - ANSWER-Offered to a limited number of qualified investors
Define exchange markets - ANSWER-Marketplace in which securities, commodities,
derivatives and other financial instruments are traded
Define OTC-markets - ANSWER-Decentralized "non-physical" trading through a broker-
dealer network
Give three characteristics of debt - ANSWER-1. Fixed claim on cash flows
2. Fixed maturity
3. Tax deductible
VALUE CREATION EXAM QUESTIONS
AND ANSWERS
Give three examples of financial markets - ANSWER-1. Capital markets
2. Commodities
3. Derivatives
Give two examples of deficit agents - ANSWER-1. NFCs
2. Governments
Give two examples of surplus agents - ANSWER-1. Retail investors
2. Institutional investors
Give two examples of financial instruments in capital markets - ANSWER-1. Equity
2. Bonds
Give two examples of financial instruments in money markets - ANSWER-1. Deposits
2. Commercial paper
Give two examples of financial instruments in derivatives - ANSWER-1. Options
2. Futures
Define primary markets - ANSWER-Seller/issuer placing the securities on the market for
the first time
Define secondary markets - ANSWER-Securities have already been issued and are
now being traded among buyers
Define public offering - ANSWER-A public offering is the sale of equity shares or other
financial instruments to the public in order to raise capital
Define private placements - ANSWER-Offered to a limited number of qualified investors
Define exchange markets - ANSWER-Marketplace in which securities, commodities,
derivatives and other financial instruments are traded
Define OTC-markets - ANSWER-Decentralized "non-physical" trading through a broker-
dealer network
Give three characteristics of debt - ANSWER-1. Fixed claim on cash flows
2. Fixed maturity
3. Tax deductible
