AFM 121 FINAL EXAM NEWEST 2025 ACTUAL EXAM QUESTIONS AND CORRECT
DETAILED ANSWERS (VERIFIED ANSWERS) |ALREADY GRADED A+
What is a market?(ANSWER)- has buyers and sellers
- we exchange capital in a capital market
- capital goes from those who have it to those who require it
- this exchange is done because those that have extra wealth can provide capital and get a return
3 components of the transfer of capital(ANSWER)financial markets, financial instruments, intermediaries
What is capital?(ANSWER)human capital:
- people in the labour force
financial/investment capital:
- savings of people, corporations, and governments
direct investment(ANSWER)investing in things like land, real estate, or equipment
indirect investment(ANSWER)invest in financial stocks, bonds, or treasury bills
we want capital to be... (capital efficiency entails 3 things)(ANSWER)- mobile
- scarce
- sensitive
if i have capital to invest, i am only going to do so if it is...(ANSWER)- easy
, AFM 121 FINAL EXAM NEWEST 2025 ACTUAL EXAM QUESTIONS AND CORRECT
DETAILED ANSWERS (VERIFIED ANSWERS) |ALREADY GRADED A+
- cheap
- generates a good return
institutional investors(ANSWER)pension funds (ontario teachers, Canada Pension PLan Invest Board),
mutual funds (Trimark, AGF)
retail investors(ANSWER)individuals like us (citizens)
foreign investors(ANSWER)- can include foreign retail, institutional and government investors
- investments are made directly in Canadian firms or through stocks/bonds for Canadian firms listed on
foreign exchanges
financial instruments(ANSWER)the mechanisms by which capital is transferred
debt(ANSWER)- funds that are borrowed
- these funds are paid back at a specific date (the maturity date)
- interest is paid between the borrowing and maturity date
equity(ANSWER)- typically in the form of stacks/shares in a company (ownership)
- you own part of the company when you are an equity investor
- have voting privileges and may receive regular dividend payments
investment funds(ANSWER)- buys and sells stocks/bonds (typically through a mutual fund)
DETAILED ANSWERS (VERIFIED ANSWERS) |ALREADY GRADED A+
What is a market?(ANSWER)- has buyers and sellers
- we exchange capital in a capital market
- capital goes from those who have it to those who require it
- this exchange is done because those that have extra wealth can provide capital and get a return
3 components of the transfer of capital(ANSWER)financial markets, financial instruments, intermediaries
What is capital?(ANSWER)human capital:
- people in the labour force
financial/investment capital:
- savings of people, corporations, and governments
direct investment(ANSWER)investing in things like land, real estate, or equipment
indirect investment(ANSWER)invest in financial stocks, bonds, or treasury bills
we want capital to be... (capital efficiency entails 3 things)(ANSWER)- mobile
- scarce
- sensitive
if i have capital to invest, i am only going to do so if it is...(ANSWER)- easy
, AFM 121 FINAL EXAM NEWEST 2025 ACTUAL EXAM QUESTIONS AND CORRECT
DETAILED ANSWERS (VERIFIED ANSWERS) |ALREADY GRADED A+
- cheap
- generates a good return
institutional investors(ANSWER)pension funds (ontario teachers, Canada Pension PLan Invest Board),
mutual funds (Trimark, AGF)
retail investors(ANSWER)individuals like us (citizens)
foreign investors(ANSWER)- can include foreign retail, institutional and government investors
- investments are made directly in Canadian firms or through stocks/bonds for Canadian firms listed on
foreign exchanges
financial instruments(ANSWER)the mechanisms by which capital is transferred
debt(ANSWER)- funds that are borrowed
- these funds are paid back at a specific date (the maturity date)
- interest is paid between the borrowing and maturity date
equity(ANSWER)- typically in the form of stacks/shares in a company (ownership)
- you own part of the company when you are an equity investor
- have voting privileges and may receive regular dividend payments
investment funds(ANSWER)- buys and sells stocks/bonds (typically through a mutual fund)
