For investors, the function of secondary markets is to provide marketability for the shares of securities they own at a fair price.   Select one :  a .  True  b .  False

Q: One of the primary reasons for investing in equity securities includes a. Receiving dividend…

A: Investments refers to the process of using the currently held excess cash to earn profitable returns…

Q: An _________________ is a person who performs an independent assessment of the fairness of a firm’s…

A: Since you are asked multi question we will provide the answer for one question only.  If you want…

Q: Discuss the main factors that influence the prices of securities on a stock exchane.

A: There are many factors that influence the prices of securities.

Q: Active secondary markets

A: Secondary Market: Secondary market is the market where the securities are bought or sold without the…

Q: Which of the following statements is true? O The secondary market is important because its existence…

A: SECONDARY MARKET : market where the stock trades.

Q: 1. SOFR is the only reference rate available for pricing floating rate securities. a. True b. False

A: The SOFR is the benchmark floating rate for the securities involved in interest rate swaps. It has…

Q: Equity investors expect to be compensated for two things

A: In financial terms, risk can be defined as the possibility that the real profits from an outcome or…

Q: Explain the effect of D/E on asset returns, equity returns (assuming that cost of debt is not…

A: Three main actors of production namely land, labor and capital are given primary importance. Capital…

Q: Generally the smaller the value of a stock transaction, the higher the percentage commission charged…

A: False. In general, the percentage commission charged on a stock transaction tends to decrease as the…

Q: The way in which the price of securities determined in Financial Markets is:

A: The correct answer is b. Through frequent interaction between investors.

Q: . Derivative securities are also called contingent claims because a. their owwners may hoose…

A: Derivative securities are securities whose payment completely depends on the value of other assets.…

Q: 4) Primary Markets exist for securities such as ________ to be offered to potential investors for…

A: Primary market:  Securities are created on the primary market, and investors trade those securities…

Q: Dividend revenue is recognized for trading securities and available for sale securities even if held…

A: Solution Concept Dividend is recognized in income statement for trading securities if they are held…

Q: What determines if a potentially dilutive security is dilutive or anti-dilutive? a. the share price…

A: Earning per share means the profit earned after taxes per share outstanding. Diluted earning per…

Q: Why is stock valuation more difficult than bond valuation

A: Since stocks don't have a maturity value like bonds do, stock valuation is more challenging. It is…

Q: The company tend to raise financial capital through selling stocks in the secondary markets. Select…

A: There are two market one is primary market and other is secondary market.

Q: Tell whether the following statements describe the characteristics of stocks or bonds. e. Issues of…

A: Stocks are the shares held by owners of the companies. They represent part ownership in the…

Q: According to the Capital Asset Pricing Model (CAPM), underpriced securities have  ___________ Group…

A: The Capital Asset Pricing Model (CAPM) is a widely accepted financial framework used to determine…

Q: Commodities of broker-traders are measured at *

A: As per IAS 2 Inventories, this standard has some exceptions. One such exception is commodity…

Q: Explain the accounting for the issuance of: a. Par value share b. No-par value share

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Share Price can be determined by the cash flows and risk. Assume other things held constant,…

A: Stock Prices are moved based on the various factors affecting the stock such as discounting factors…

Q: 1. How are passive investments accounted for under ASPE? a) Cost of amortized cost. b) FVTPL…

A:

Q: The purpose of the hedger in futures trading is ()   A. Transfer price risk                  B.…

A: Hedging is a technique in which risks in underlying assets are managed or reduced by adopting…

Q: Which of the below is NOT TRUE with respect to secondary markets A. Secondary markets assist…

A: Primary market - is the place where company sell new shares to the investors for the first time i.e…

Q: Under which circumstances can the speculator gain a profit and what is the risk of carry trades?

A: The big risk in a carry trade is the uncertainty of exchange rates. Using the example above, if the…

Q: Question 2) Issuing marketable securities is the primary way businesses finance their orperations.…

A: Marketable securities can be defined as those short term highly liquid securities which can be…

Q: Choose the correct answer:  Equity security acquired for non-trading and the shares are not enough…

A: Solution Concept When there is no significant influence then the investment is financial asset Debt…

Q: TRUE OR FALSE: Assuming an efficient market, two financial securities cannot have the same risk and…

A: The efficient market hypothesis states that information is quickly and accurately reflected in asset…

Q: Which of the following statement is true? a. In brokered markets, buyers and sellers confront…

A: Introduction: The primary market is where the new offerings are issued to the public. The companies…

Q: designation s to whether the equity investment is at FVPL or OCI depends upon whether the securities…

A: There are many methods of the valuations and based on the valuation there are classifications of…

Q: f market is efficient, in managing an equity portfolio, you will adopt a. Indexing strategy b. Stock…

A: An efficient market is one where the security prices reflect all information available about that…

Q: Indicate whether the following statements are true or false. If the statementis false, explain…

A: Introduction: Capital gain is referred as any profit or gain that coming from the sale of a ‘capital…

Q: Describe and compare (i) the Simple Earnings Capitalisation Model, (ii) Burgstahler & Dichev's…

A: (i) Simple earnings capitalization model: Simple earnings capitalization model determines the value…

Q: The least risky capital market security is a.preferred stock. b.common stock. c.corporate bonds.…

A: The primary purpose of capital markets is to offer financial products like stocks and bonds. Stocks…

Q: Investors invest in Fixed Income securities (i.e., bonds) for the passive income that comes from…

A: In this question, we are required to determine whether the given statement is true or false.

Q: The return payable on equity is called Select one: a. Brokerage b. Interest c. None of the options…

A: The term "equity" is a financial term that is a part of a capital structure of a corporation. It…

Q: Both stock and bond returns are based on the cash flows generated by the issuing firm. How do…

A: Shareholders : In simple words, the shareholders of the company refers to the equity stakeholders of…

Q: What is meant by coupon stripping in the Treasury market?

A: Coupon stripping is the separation of an instant bond's periodic interest bills from its foremost…

Q: Investors generally place their funds in equity securities because of:   a.The expected dividends b…

A: Equity investment is the possibility to increase the value of the principal amount invested. This…