for Solution Pro

Question 1

· 
 If the spot rate for Swiss francs is $0.6658/franc and the 180-day forward rate is $0.6637, the market is indicating that the Swiss franc is expected to



·	·	· a. strengthen relative to the dollar
·	·	· b. weaken relative to the ECU
·	·	· c. lose value relative to the dollar over the next 6 months
·	·	· d. gain value relative to the dollar over the next 6 months

· 


0.4 points  

Question 2

· 
 The barriers to the free flow of capital among the major world capital markets include all of the following except:



·	·	· a. low transaction costs
·	·	· b. taxation policies
·	·	· c. foreign exchange risks
·	·	· d. legal restrictions

· 


0.4 points  

Question 3

· 
 An exchange rate quoted as $1.47 per British pound is known as a ____ quote.



·	·	· a. Hedge
·	·	· b. Direct
·	·	· c. Futures
·	·	· d. Indirect

· 


0.4 points  

Question 4

· 
 Although there was a financial crisis in 2007-2010, some firms were able to weather the crisis. These firms had all of the following characteristics which were directly responsible for their ability to survive the crisis EXCEPT:



·	·	· a. Tight control over fixed and variable costs
·	·	· b. Low business risk
·	·	· c. A business model which encouraged risk taking by management that paid off
·	·	· d. Low product pricing

· 


0.4 points  

Question 5

· 
 The difference between the bid price and the ask price on a security is the:



·	·	· a. spread
·	·	· b. value
·	·	· c. asset factor
·	·	· d. commission

· 


0.4 points  

Question 6

· 
 The U.S. financial markets are said to be highly informationally efficient. This means



·	·	· a. they process stock trades accurately and quickly
·	·	· b. the market provides quick access to a firm's financial statements
·	·	· c. they quickly reflect information relevant to determining stock value
·	·	· d. accurate stock quotes are quickly available to all investors

· 


0.4 points  

Question 7

· 
 Money markets deal in securities having maturities of ____; capital market securities have maturities ____.



·	·	· a. less than 18 months, greater than 18 months
·	·	· b. one year or less, greater than one year
·	·	· c. less than 9 months, greater than 9 months
·	·	· d. less than 6 months, greater than 6 months

· 


0.4 points  

Question 8

· 
 Commercial banks are an important source of



·	·	· a. mortgage loans
·	·	· b. equity loans
·	·	· c. real estate loans
·	·	· d. short-term loans and term loans

· 


0.4 points  

Question 9

· 
 The main purpose of an economy's financial system is to facilitate the transfer of funds from



·	·	· a. financial middlemen to financial intermediaries
·	·	· b. surplus spending units to deficit spending units
·	·	· c. primary claimholders to secondary claimholders
·	·	· d. lenders to financial intermediaries

· 


0.4 points  

Question 10

· 
 Insider trading is defined as



·	·	· a. an individual using proper trading rules
·	·	· b. an individual buying or selling using non-SEC disclosure rules
·	·	· c. an individual buying or selling on the basis of material nonpublic information
·	·	· d. a zero-plus game

· 


0.4 points  

Question 11

· 
 If the exchange rate from U.S. dollars to Canadian dollars is $0.80/Canadian dollar, then the exchange rate from Canadian dollars to U.S. dollars is



·	·	· a. 0.80 Canadian $/US dollar
·	·	· b. $1.25 Canadian $/US dollar
·	·	· c. $1.20 Canadian $/US dollar
·	·	· d. $8.00 Canadian $/US dollar

· 


0.4 points  

Question 12

· 
 In the ____ market, the firm receives the proceeds from the sale of its securities.



·	·	· a. over-the-counter
·	·	· b. secondary
·	·	· c. fully integrated
·	·	· d. primary

· 


0.4 points  

Question 13

· 
 If an investor purchased 100 shares of Biggee stock for $30 per share, 6 months ago, and then sold the stock today for $33 per share, what was the investor's holding period return if a total of $1 per share in dividends was received over the 6 month period?



·	·	· a. 10%
·	·	· b. 27.1%
·	·	· c. 17.1%
·	·	· d. 13.3%

· 


0.4 points  

Question 14

· 
 The Standard and Poor's 500 Stock Price Index is a ____ index.



·	·	· a. price weighted
·	·	· b. market value weighted
·	·	· c. price average
·	·	· d. none of these answers is correct

· 


0.4 points  

Question 15

· 
 There are many reasons why there was a financial crisis in 2007. The most significant event closely associated with this crisis is:



·	·	· a. the stock market crash
·	·	· b. the real estate bubble
·	·	· c. government overspending
·	·	· d. the use of financial hedging