Fin 4303 - Study guides, Class notes & Summaries

The most influential participant(s) in the U.S. money market A) is the Federal Reserve. B) is the U.S. Treasury Department. C) are the large money center banks. D) are the investment banks that underwrite securities.A) is the Federal Reserve. . Treasury bills do not A) pay interest. B) have a maturity date. C) have a face amount. D) have an active secondary market.A) pay interest.

Typically increasing interest rates: a. discourages individuals from saving. b. discourages corporate investments. c. encourages corporate expansion. d. encourages corporate borrowing. e. none of the above. B. Discourages corporate investments Increasing interest rates make borrowing more expensive an

a contract that gives the holder the right to sell a security at a preset price on the contract expiration date only is a(n) european put option You paid a premium of $1.47 for a call option on a common stock. The option has an exercise price of $65. Assume that on the call option expiration date they underlying stock price is $66. Calculate your net gain in dollars on a per share basis on your call option position as a rational investor. -$0.47 (=66-65-1.47) New interest rate futures...

What role did the credit-rating agencies play leading up to the start of the financial crisis in 2007? Inaccurate ratings provided by credit-rating agencies helped promote risk taking throughout the financial system. Although the FDIC was created to prevent bank failures, its existence encourages banks to take too much risk. The result of the too-big-to-fail policy is that ________ banks will take on ________ risks, making bank failures more likely. large; greater If a financial firm ...

The most influential participant(s) in the U.S. money market A) is the Federal Reserve. B) is the U.S. Treasury Department. C) are the large money center banks. D) are the investment banks that underwrite securities.A) is the Federal Reserve. . Treasury bills do not A) pay interest. B) have a maturity date. C) have a face amount. D) have an active secondary market.A) pay interest.

Typically increasing interest rates: a. discourages individuals from saving. b. discourages corporate investments. c. encourages corporate expansion. d. encourages corporate borrowing. e. none of the above. B. Discourages corporate investments Increasing interest rates make borrowing more expensive and What are the three primary financial markets? Bond, Stock and Foreign exchange What is the function of the financial market? To channel funds from someone without investment opportuniti...

a contract that gives the holder the right to sell a security at a preset price on the contract expiration date only is a(n) european put option You paid a premium of $1.47 for a call option on a common stock. The option has an exercise price of $65. Assume that on the call option expiration date they underlying stock price is $66. Calculate your net gain in dollars on a per share basis on your call option position as a rational investor. -$0.47 (=66-65-1.47) New interest rate futures...

What role did the credit-rating agencies play leading up to the start of the financial crisis in 2007? Inaccurate ratings provided by credit-rating agencies helped promote risk taking throughout the financial system. Although the FDIC was created to prevent bank failures, its existence encourages banks to take too much risk. The result of the too-big-to-fail policy is that ________ banks will take on ________ risks, making bank failures more likely. large; greater If a financial firm ...

Chapter 1 Why Study Financial Markets and Institutions?  Multiple Choice Questions 1. Financial markets and institutions (a) involve the movement of huge quantities of money. (b) affect the profits of businesses. (c) affect the types of goods and services produced in an economy. (d) do all of the above. (e) do only (a) and (b) of the above. Answer: D 2. Financial market activities affect (a) personal wealth. (b)spending decisions by individuals and business firms. (c) the economy’s location...

FINANCIAL MARKETS AND INSTITUTIONS PRACTICE QUESTIONS 1) Every financial market performs the following function: A) It determines the level of interest rates. B) It allows common stock to be traded. C) It allows loans to be made. D) It channels funds from lenders-savers to borrowers- spenders 2) Financial markets have the basic function of A) bringing together people with funds to lend and people who want to borrow funds. B) assuring that the swings in the business cycle are less pronounced. C) ...