CFIN4 CHAPTER 3 ACTUAL EXAM QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS) ALREADY GRADED A+
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Course
CFIN4
Institution
CFIN4
CFIN4 CHAPTER 3 ACTUAL EXAM QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS) ALREADY GRADED A+
Which of the following is not a considered financial intermediary?
a. commercial bank
b. savings and loan association
c. pension fund
d. investment bank
e. All of the ab...
CFIN4 CHAPTER 3 ACTUAL EXAM
QUESTIONS AND CORRECT DETAILED
ANSWERS WITH RATIONALES
(VERIFIED ANSWERS) ALREADY
GRADED A+
Which of the following is not a considered financial intermediary?
a. commercial bank
b. savings and loan association
c. pension fund
d. investment bank
e. All of the above are financial intermediaries - Answer-d. investment bank
Which of the following transactions takes place in secondary markets?
a. New stock sold in an initial public offering.
b. Treasury securities auctioned off by the government.
c. Stock sold by an insurance company to adjust its portfolio of assets'.
d. Stock sold in a seasoned equity offering.
e. None of the above. - Answer-c. Stock sold by an insurance company to adjust its
portfolio of assets'.
Which of the following factors distinguish the banking system in the United States from
banking structures in other countries?
a. Financial institutions in the United States are less regulated than their foreign
counterparts.
b. Financial institutions in the United States have fewer limitations with regard to
branching activity than their foreign counterparts.
c. Financial institutions in the United States have greater limitations with regard to non-
banking business relationships than their foreign counterparts.
d. Financial institutions in the United States have been able to grow much larger in size
than their foreign counterparts.
e. Financial institutions in the United States dominate international banking activities. -
Answer-c. Financial institutions in the United States have greater limitations with regard
to non-banking business relationships than their foreign counterparts
Which of the following is not an advantage of going public?
a. It allows a firm's founders to diversify their holdings.
b. It increases the liquidity of the stock.
c. It establishes a value for the firm.
d. It makes it easier to raise new equity capital in the future.
, e. All of the above are advantages of going public. - Answer-e. All of the above are
advantages of going public
Large, well-known public companies can reduce the time required to register and issue
securities by using a(n)
a. Shelf registration.
b. Subchapter S registration.
c. Underwriting syndicate.
d. Secondary market registration.
e. "Red herring" registration - Answer-a. Shelf registration
A corporation that is owned by a few individuals who are typically associated with the
firm's management is a ________________ corporation.
a. private
b. public
c. diversified
d. closely held
e. listed - Answer-d. closely held
If you wanted to purchase previously issued shares of stock from another investor you
would find the shares in the
a. primary market.
b. debt market.
c. IPO market.
d. secondary market.
e. SEO market. - Answer-d. secondary market.
The market for newly issued stock by firms that were private is normally called
a. the seasoned equity market.
b. the over-the-counter market.
c. the initial public offering market.
d. the secondary market.
e. the stock market. - Answer-c. the initial public offering market.
Certificates representing ownership in stocks of foreign companies, which are held in a
trust bank located in the country the stock is traded are called ________.
a. Certificates of Ownership
b. Foreign Stock Funds
c. Mutual Funds
d. American Depository Receipts
e. Investment Bankers - Answer-d. American Depository Receipts
An agreement for the sale of securities in which the investment bank guarantees the
sale by purchasing the securities from the issuer and then sells the securities in the
primary is a(n) .
a. best efforts arrangement
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