1. Statement 1: Financial securities are instruments that can be transferred or sold easily throughestablished financial markets.Statement 2: Financial securities uses physical certificates that sellers (holders) need to seek theapproval and signature of the is suer to be transferred to the buyer.Statement 3: Financial securities are tradeable through established market or over-the counter.Statement 4: Financial securities hold monetary value or face value that is equivalent to their sellingprice.Statement 5: Financial securities are fumgible that can be converted into assets or cash. a.Allstatements are true b.Statements 1,2 and3 are true c.Statements 2, 3 and 4 are true d.Statements 3,4and 5 are true e. Statements 1, 3 and5 are true f. Statements 2, 4 and 5 are true2. Statement 1: Debt securities represent ownership in a firm that would entitle the holders certaindividends and claims in a firm.Statement 2: Equity securities are loans made by the issuing firm that wouldentitle the holderscertain interest andmaturity value.Statement 3: Debt securities include bonds, certificates of deposits, promissorynotes, govermmentnotes and bills.Statement 4: Equity securities include preferred and common stocks.Statement 5: Derivative securities include instruments whose underlying assets are bonds, stocks,commodities, currencies, interest rates and other assets.a. All statements are true b.Statements 1, 2 and 3 are true c.Statements 2, 3 and 4 are trued.Statements 3, 4 and 5 are true e.Statements 1, 3 and 5 are true f. Statements 2, 4 and 5 are true 3. Whichis correct about financial securities?a. Financial securities guarantees retum to investors.b. Financial securities eliminate risk that most financial managers are facing.c. Diversification spreads risk and improves expected total retum.d. Financial securities protect investors againstriskshocks brought by social, economic, andpoliticalevents.e. All of the abovef. None of the above4. 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 enviromment to investors. c. Financialsecurities are utilized by firms to generate capitalization for firms or the govemment. d. Financialsecurities are regulated by the govermment to protect the investing public. e. All of the abovef. None of the above5. Which is corect 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 abovef. None of the above.6. Which is not considered as a debt security issued byprivate entities?a. Straight bondsb. Floating-rate corporate notesc. Commercial paperd. Acceptance

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