Which is correct about financial securities?a. Financial securities guarantees return to investors.b. Financial securities eliminate risk that most financialmanagers are facing.c. Diversification spreads risk and improves expected totalreturn.d. Financial securities protect investors against risk shocksbrought by social, economic, and political events.e. All of the abovef. None of the aboveWhich is correct about debt securities?a. Debt securities make the holders owners and give them theright to vote in all matters of the firm.b. Debt securities give the holders the right to receive interestand dividends.c. Debt securities give the holders the right to be elected asboard of directors or to vote them.d. Debt securities give the holders the right to convert theminto stocks if the indenture states.e. All of the abovef. None of the above.

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Cornerstones of Financial Accounting

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ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

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Which is correct about financial securities?a. Financial securities guarantees return to investors.b. Financial securities eliminate risk that most financial managers are facing.c. Diversification spreads risk and improves expected total return.d. Financial securities protect investors against risk shocks brought by social, economic, and politicalevents.e. All of the abovef. None of the above
Which of the following is NOT a purpose of valuing financial securities? a. Valuation is used to provide sensible financial decisions.b. Valuation is used to get the intrinsic value of a financial security.c. Valuation is helpful for investors in order to determine whether to buy or sell their securitiesd. Valuation is used to predict the exact prices of financial securities.
4. Which is incorrect about financial securities? a. Financial securities are guarantees the holders in terms of their claims. b. Financial securities give stable financial retum and safer environment to investors. c. Financial securities are utilized by firms to generate capitalization for firms or the govemment. d. Financial securities are regulated by the govermment to protect the investing public. e. All of the above f. None of the above 5. Which is correct about debt securities? a. Debt securities make the holders owners and give them the right to vote in all matters of the fim. b. Debt securities give the holders the right to receive interest and dividends. c. Debt securities give the holders the right to be elected as board of directors or to vote them. d. Debt securities give the holders the right to convert them into stocks if the indenture states. e. All of the above f. None of the above. 6. Which is not considered as a debt security is sued byprivate entities? a. Straight…
Which of the following is a constrain for the investors? a. The mentality tontake the high risk b. Tax exemption on security trading c. Getting high income d. Liquidity needs
Two statements are given below about Marketable Securities: Statement 1: Marketable securities does not substitute for cash balances. Statement 2: Marketable securities offer a place to temporarily put cash balances to work earning positive returns a. The first statement is TRUE and the second statement is FALSE. b. Both statements are TRUE. c. The first statement is FALSE and the second statement is TRUE. d. Both statements are FALSE.
Debt Securities - These securities are in the form of debt or borrowings which have to be repaid by the issuer to the holder of the securities. The issuers of debt securities have to pay interest in the form of coupons at a rate of interest. Debt securities are a means of diversification and provide a predictable income stream to the holders. You mention "coupons" in you debt instrument discussion. Can you tell us more about these coupons? How do they work, where do we find them? Are they registered?
The way in which the price of securities determined in Financial Markets is: a. By mobilization of savings b. Through frequent interaction between investors c. Providing liquidity to non- tradable assets d. None of these
1. A type of risk that relates to the changes in the market value of commodities that diminishes the power of money in relation to its ability to purchase goods and services. A. Default risk B. Interest-rate risk C. Purchasing power risk D. Liquidity risk 2. Bonds, a source of long-term financing, are long-term debt instruments. They are similar to term loans, except that they ae usually offered to the public and sold to many investors. Among the advantages (to the issuer) of issuing bonds are as follows, except A. Cost of debt is limited- bondholders usually do not participate in the superior earning of the firm. B. Interest paid on debt (bonds) is tax deductible C. Debt adds risk to a firm D. Basic control of the firm is not shared with the debt holders. 3. Cost of capital is the: A. amount the company must pay for its plant assets. B. dividends a company must pay on its equity securities. C. cost the company must incur to obtain…
What is the primary motivation of investors in performing security analysis? A-identify the best times to buy and sell securities B-Contribute to the efficiency of securities markets C-Identify securities whose insrinsic values are at or near their market values D-Identify mispriced stocks
Banks use gap analysis to measure interest rate risk in their balance sheets. If firm XYZ is said to have a positive gap, this means: Group of answer choices C. Rate-sensitive assets exceed rate-sensitive liabilities B. Long-term assets are funded with short-term liabilities D. Rate-sensitive assets equal rate-sensitive liabilities A. Liabilities reprice before assets
1. Which of the following is a function of every financial market? 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. Securities are for the person who purchases them, but they are for the person/firm who sells them. A) assets; liabilities B) liabilities; assets C) income; liabilities D) liabilities; expenses 3. Which of the following is/are money market instrument(s)? A) Negotiable certificates of deposits B) Common stock C) T-bonds D) 4-year maturity corporate bond 4. Who has voting rights at a shareholders' meeting? A) All common stock owners. B) Common stock owners who own more than 1% of the company. C) Only the company's managers. D) All preferred stock owners. 5. These are investments where shareholders become the owners of the portfolio of the account. These portfolios of securities could be made up of equity securities or debt securities. A)…
Think from the borrower (management) and NOT lender (investor) points of view. Which is the less risky financial instrument? O bond financing O stock financing O bank loans venture capital funding

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